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CAMBRIDGE, MA-The city’s tight office market is apparently close to forcing another long-time tenant to head for the exits, as Camp Dresser & McKee is reportedly pursuing suburban alternatives with the engineering giant’s lease expiration nearing at One Cambridge Place. According to industry sources, CDM has retained Cresa Partners to conduct a pair of space searches, one south of Boston and another north of the city.

“That’s our understanding,” one broker tells GlobeSt.com while acknowledging it is unusual for a company to split its headquarter operations. That source and others maintain the requirements are each around 100,000 sf, offering suburban landlords two plums to help fill their buildings. Another broker claims CDM is on a short leash time wise, supposedly aiming to make the moves by early 2009. The firm signed a lease in November 1998 for all of One Cambridge Place, also known as 50 Hampshire St. The nine-story, 183,000-sf building was developed by the Bulfinch Cos. and is today owned by MetLife.

Cresa Partners brokers Christopher Crooks and Adam Subber are handling the CDM assignment, sources say. Crooks and CDM officials did not respond to inquiries from GlobeSt.com by press deadline. Nonetheless, several sources insist the searches are under way, including one who indicates company officials did cite the potential occupancy savings as a factor in opting to seek new quarters. Founded in 1947 by three local entrepreneurs with ties to the Massachusetts Institute of Technology, CDM has been in Cambridge for nearly 20 years, having moved to One Cambridge Place from the Cambridge Center complex developed by Boston Properties.

A number of factors have contributed to sharp rental hikes in Cambridge during the past year, including a lack of inventory exacerbated by demand for laboratory space. Able to command even greater rents, many landlords have converted office buildings into lab facilities, while a dearth of new construction has further constricted options. According to Jones Lang LaSalle, the average asking rate for class A buildings in Cambridge rose from $35 per sf in 2006 to $47.91 at year-end 2007. It is the second highest level Cambridge has seen, trailing only the boom year of 2000 when the average asking rate was $56 per sf. The city suffered from a subsequent downturn after hitting that peak, but has since recovered from the low of $26 per sf recorded in 2004.

Cambridge did manage to retain some top firms last year, including Akamai Technologies and the Monitor Group, and also lured the likes of Google and Microsoft to ink long-term leases. To one industry observer, the prospect of CDM departing does offer a bright spot in the opportunity for a large block of first class space to be once again available. Metlife is presently advertising space on the fourth through ninth floors at One Cambridge Place as being ready for occupancy in January 2010. “It’s a great building and will be welcomed by the market,” says the source. JLL counts just four blocks of space in Cambridge where a tenant can secure 40,000 sf or more of contiguous space. Cambridge’s inventory of 12.8 million sf has a vacancy of 7.3%, while the class A mark is even tighter at 4%.

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