Berkeley Closes In on 75,000-SF Lease

BOSTON-The city’s emerging Seaport District is about to land a plum office tenant, as Jacobs Engineering Group is preparing to take down 75,000 sf at 343 Congress St. Sources say the internationally known engineering firm has committed to the five-story building, which is owned by Berkeley Investments and already houses one of Jacob’s local affiliates, Edwards & Kelsey.

“They want everyone under one roof,” a source tells GlobeSt.com in explaining that Jacobs would relocate its Carter Burgess team from Charlestown and another group presently at 2 Center Plaza in Boston’s Government Center. Carter Burgess was acquired by Pasadena, CA-based Jacobs Engineering last autumn, while Jacobs had previously taken over Edwards & Kelsey and a company that held the Center Plaza lease. All of the groups are involved in the architectural, engineering and design sectors, with Jacobs today employing nearly 50,000 people and generating revenues last year in excess of $8 billion.

According to sources, the lease could be completed in the next week or two. Jacobs is supposedly looking to extend its Edwards & Kelsey lease that has that entity occupying about 25,000 sf on the second floor, while the relocated operations would be on the fourth and fifth floors. In an unrelated deal, tenant Ember Corp. will move from 343 Congress St. into 17,000 sf at a nearby Fort Point Channel building as part of a sublease with Thomson Financial Corp.

“It’s a big win” for Berkeley, says one broker familiar with the Jacobs situation. Cushman & Wakefield executive director Jay Driscoll is orchestrating negotiations between the two parties, but declined comment when contacted by GlobeSt.com. Sources could not provide details on length and rental rate, although most report the space is being marketed above $40 per sf, possibly into the mid-$40-per-sf range. Calls to Berkeley principal Young Park were not returned by press deadline, while a Jacobs official refused to discuss the transaction.

Locally based Berkeley has become a major player in the Seaport District and its core Fort Point Channel area, which is dominated by factories and warehouse buildings left from the city’s days as a manufacturing hub. The 343 Congress St. asset also hearkens back to the 19th century, but was used for decades as a garage until being acquired in the late 1990s by Intercontinental Real Estate Corp. That firm added a fifth level and converted the structure into a multi-tenanted office building catering to the wave of high-tech tenants flooding into the market in 2000 and 2001.

Dreams of a technology centric district died when the industry crash enveloped Massachusetts, leading some firms who initially took space at 343 Congress St. to back out even prior to moving into the building. Intercontinental ultimately completed several deals with new tenants above $40 per sf before selling to Berkeley in August 2003 for $26.8 million. The Seaport has seen its share of ups and downs since, but the past 18 months have brought a healthy rebound that has restored rents above $40 per sf. “Right now, it’s as tight as a tick,” says one broker active in the district. C&W estimates the submarket’s current vacancy rate at 8.9% for 7.8 million sf after a robust 2007 that had 189,000 sf of positive net absorption.