Congress Group Suburban Buys Fuel Speculation

FRAMINGHAM, MA-Pennsylvania Avenue here is quite unassuming compared to its famous counterpart in Washington, DC, but the narrow dead-end street has smitten at least one intriguing commercial real estate operator. Known for such imposing ventures as the 33 Arch St. skyscraper in Downtown Boston and the 435-unit Museum Towers residential project on the Charles River in Cambridge, developer Dean Stratouly is snagging his second Pennsylvania Avenue building in six months, a move that has caught the notice of industry observers.

The conquests of 135 and 137 Pennsylvania Ave. are meager, with each two-acre lot housing a small, aging commercial building. Stratouly’s Congress Group paid just $2.45 million for 135 Pennsylvania Ave., and is said to be spending about the same on 137 Pennsylvania Ave. Given Stratouly’s resume–even helping develop Boston’s $800-million convention center earlier this decade–speculation is rising over whether the Framingham goals also tilted on the super size. “People wonder what he’s doing up there,” relays one source, describing a “buzz” circulating about the maneuvers. Apparently, there is good reason for the clamor.

“It gives us a significant amount of acreage,” Stratouly concurs to GlobeSt.com, simultaneously acceding that his platform is “to build high,” at least skyward enough to capture the same views afforded Bose Corp.’s headquarters one hillside behind. Besides vistas of the MetroWest countryside, tenants will have exposure to motorists traversing the Massachusetts Turnpike below, maintains Stratouly, as Bose adroitly does from its perch on the aptly named Mountain Road.

But Congress Group’s manifest destiny on Pennsylvania Avenue has yet to be sated, with the firm targeting the abutting International Paper Co. property at 125 Pennsylvania Ave. That would provide six acres and nearly double the turnpike frontage. IPC shuttered the plant and sold it to a Memphis company in January for $3.2 million after being there for decades. That company has reportedly retained Hank Amabile of Grubb & Ellis to sell the asset, although the broker did not return a phone call.

While there were “early discussions” about 125 Pennsylvania Ave., Stratouly says he does not have an agreement in place, potentially raising the stakes for the asset. Besides rival developers, neighboring tenants are potential buyers, commercial real estate locals indicate, with ever-growing Genzyme Corp. occupying multiple buildings in the immediate area. Bose also owns 145 Pennsylvania Ave., the last building on that street, and the parcel that abuts the other side of 137 Pennsylvania Ave.

Stratouly says he doubts Bose would divest 145 Pennsylvania Ave. A handful of properties extend beyond 125 Pennsylvania Ave. to the beginning of the street, most notably 100 Pennsylvania Ave., a five-story, 78,000-sf office building recently abandoned by Staples Corp. CBRE/New England is leasing agent for the vacant property, and broker Christopher Tosti says he believes the thoroughfare could be upgraded as envisioned by Stratouly, who hopes to deliver “high-end, sophisticated space” more in step with the class A 33 Arch St. where Congress Group is now based, and CBRE/New England is headquartered.

Although 100 Franklin St. is no longer holding out for a full-building tenant, and is willing to subdivide to 8,000 sf, Tosti says Natick and Framingham remain among the tightest office sectors in suburban Boston, with the Pennsylvania Avenue neighborhood stocked by top-rated tenants. That bodes well for the future, says Tosti, a notion shared by Stratouly. The fundamentals of Framingham and the value of the Pennsylvania Avenue sites were the catalysts behind his arrival, says Stratouly, whose developments have tended to be weighted closer to Downtown Boston.

Looking forward, Stratouly says he is hopeful a deal can be struck for 125 Pennsylvania Ave., and says other opportunities are also being assessed. At this point, however, he insists the union of 135 and 137 Pennsylvania Ave. give him the mass necessary to produce a development of note. “For me, that’s huge,” he says of the four acres, with projects such as 33 Arch St. cast upon far tighter parcels.