Tech Firm Signs 131K SF Lease At Massive Spec Waltham Project
Hobbs Brook Real Estate has secured a 131K SF lease from a Cambridge-based tech firm at the 500K SF Waltham lab and office building it is building on spec. The deal — and the reasoning behind it — should buoy owners of suburban office buildings hoping to cash in on a rethinking of office portfolios.
Software company Pegasystems has signed an 11-year lease with Hobbs Brook at the 225 Wyman St. development, according to Securities and Exchange Commission filings. The lease is the latest 100K SF-plus deal in Boston’s suburbs, which have seen increased activity this year.
A Pegasystems spokesperson told Bisnow it signed the deal to give its staffers around the Boston area more workplace options.
"We are implementing a flexible remote work policy based on what our employees are looking for, so expect we will have employees that will work from home part or full time and want to take advantage of multiple locations depending on where their primary residence is," Pegasystems Vice President of Corporate Communications Lisa Pintchman said in a statement.
The lease demonstrates 225 Wyman's attractiveness to tech, business and life sciences companies, Hobbs Brook CEO Sam Schaefer said in a statement.
"Interest in the campus is extremely high, as we encounter more and more companies prioritize offices that offer natural amenities and outdoor space," he said.
Pegasystems in February announced it would vacate its 162K SF home at One Rogers St. in East Cambridge in October. It received an $18M payment from landlords Principal Real Estate Investors and The Davis Cos. when its lease was terminated, saving the company $21.1M in lease liabilities, it said in an SEC filing.
The firm expects to move into the new Waltham office when it opens, which is expected in March 2022. The facility will serve remote workers who can also check into the company's Salem, New Hampshire, office and its new East Cambridge home at One Main Street, a spokeswoman said.
A representative for T3 Advisors confirmed it represented Pegasystems in lease negotiations. JLL, listed as a leasing agent in the lease and the development’s website, didn’t respond to a request for comment.
The software firm has agreed to pay $46 per SF, or $6M, in rent during the first year of the lease, and by 2031 pay $60.02 per SF, or $7.8M, in its final year. The lease includes one five-year extension option and $11.8M in tenant improvement allowances, or $90 per SF.
Alexandria Real Estate Equities purchased One Rogers Street, alongside neighboring One Charles Park, last month for $815M. The buildings will be redeveloped into a 400K SF office and lab structure, Alexandria said in an investor presentation.
The Pegasystems lease was the third-largest signed in Boston’s suburbs in the past quarter. Wholesaler BJ’s leased 190K SF at The Campus At Marlborough, relocating from Westborough, while IBM is relocating from a 490K SF space in Littleton to a 150K SF office in Lowell. Hobbs Brook in April also signed ZoomInfo to a 15-year lease at neighboring 275 Wyman St. for a 98K SF space that the firm plans to expand to 226K SF through 2027.
UPDATE, JULY 15, 7 A.M. ET: This story has been updated with a statement from Hobbs Brook Real Estate CEO Sam Schaefer.
CORRECTION, JULY 16, 10 A.M. ET: An earlier version of this story incorrectly said Pegasystems paid $18M to terminate its lease. The landlord paid the $18M fee to Pegasystems, according to a spokeswoman and a Securities and Exchange Commission filing.