AKAMAI’S CONSOLIDATED GLOBAL HEADQUARTERS
By Steve Adams
Banker & Tradesman Staff
July 2, 2017
Tenant brokerage Cresa Boston’s assignment working with tech giant Akamai on a consolidated global headquarters was no straightforward lease transaction. Cambridge’s negligible vacancy rate and Akamai’s requirement for more than 600,000 square feet required a creative solution. Along with Cresa Principal Daniel Sullivan, Adam Subber was part of a team that won the Commercial Brokers Association’s 2016 Greater Cambridge Deal of the Year for negotiating a 630,000-square-foot lease on behalf of Akamai in Kendall Square. The transaction includes construction of a new 480,000-square-foot, 19-story tower by Boston Properties at 145 Broadway and lease of 150,000 square feet in Boston Properties’ existing Kendall Square portfolio. The transaction enables Akamai to consolidate more than 1,600 employees currently located in six separate Cambridge buildings into a single campus.
Q: How many different options did Akamai consider?
A:They’d been contemplating their long-term growth for the region for a number of years and even with advisors that predated our involvement. We helped them grow through a process of evaluating a couple of different strategies: stay or go in Kendall, split the operation and move some to downtown Boston – a dense urban location with great amenities and transportation and perhaps a more compelling price point for some of the operations. Or should they move some operations out of the city? They have a pretty big investment in Westford. Ultimately the CEO Tom Leighton and his team felt strongly that from a bang-for-the-buck in terms of the brainpower they’re getting from the engineering talent in Cambridge, they felt it was the right move to stay focused on Cambridge. We did, during the course of the negotiation, allow it to become somewhat public that we were focused on a short handful of options in East Cambridge. Any time you have a large-scale corporate headquarters project, you have to be mindful of what employees are seeing in the media. There was an element of putting some people’s minds at ease.
Q: Given the Cambridge market’s continuing shortage of availabilities, what advice to you give tenants looking for space?
A:It’s safe to say that tenants are recognizing they have to be flexible and creative because there’s such a high demand for space. There will be other parties involved who are giving up space, and that’s a phenomenon we’re seeing in a handful of other submarkets in the country, such as Palo Alto.
Q: With the continuing migration of Cambridge companies to Boston, do you see Boston becoming more of a life science hub in areas such as the Seaport District?
A: It’s been a real phenomenon for four or five years, and the last two it’s really obvious. That trend will slow for a simple reason: We’re starting to run out of homegrown Cambridge tenants that are not biotech or fintech, so many of those companies have made the move already. On the lab side, Vertex made a huge investment in Boston and you’re seeing some smaller companies go to the Innovation and Design Building. The challenge for many life science users is, are you comfortable about where you are in the life cycle of the company and are your investors comfortable with you making a move outside the supercluster of Kendall Square?
The Fenway is probably the second most-favored location in Boston after the Seaport. Companies like Samuels & Assoc. have invested huge amounts of capital and they’re building a neighborhood there. It’s a different market, though. If you look at the handful of lab users that are there, they’re either far more office-heavy in terms of their actual space needs, or they have a direct affiliation with the Longwood Medical Area.
Q: With all of the approved office towers looking for anchor tenants in Boston, how many do you think get built in this cycle?
A: There’s probably at least one more big project that will go, whether it’s Winthrop Square or Tom O’Brien’s (Bulfinch Crossing) project. It’s a challenge when you get into these high-rise environments: the construction costs. In the expansion period we’ve been in the last eight or nine years, it’s been shown there is a real strong belief in the urban core. If I’m Boston Properties, I feel good about what they’re doing at North Station because you’re creating real excitement about the location with residential and retail. They managed to limit their office exposure.
Subber’s Top 5 Songs By Boston Rock Bands For The Commute Into Work:
“Moving in Stereo” – The Cars
“Here Comes Your Man” – Pixies
“Voices Carry” – Gang Green
“The Wagon” – Dinosaur Jr.
“That’s When I Reach for My Revolver” – Mission of Burma