Here’s How Much CarGurus Is Paying For Its Future HQ Over Mass. Pike
CarGurus, a Cambridge-based online car-selling platform, plans to grow its office footprint by 50% at what would be Boston’s first air rights development built over the Massachusetts Turnpike since the early 1980s.
CarGurus signed a lease with Samuels & Associates Dec. 19 for 273K SF at 1001 Boylston St., a two-tower mixed-use project at Parcel 12 planned to be built over the Mass. Pike in Back Bay. The tech company is slated to occupy floors 10 through 20 and have two roof decks as well as an indoor amenity space, according to a filing with the Securities and Exchange Commission.
CarGurus would pay nearly $65 per SF in its first year with rent rising $1.30 per SF annually to a high of a little more than $83 per SF in the 15th year of the lease. Class-A office rents in Back Bay averaged $86 per SF in Q4, according to Perry data. The company also has a tenant improvement allowance of up to $130 per SF.
While it may seem like a neighborhood steal, the CarGurus lease is a triple net deal, meaning the tenant is also responsible for paying its share of real estate taxes and operating expenses at 1001 Boylston on top of its rent.
“These value ranges are ultimately in line with Class-A product in the immediate vicinity of 1001 in the Back Bay — a premium to the Seaport but a significant discount to recent values seen in Cambridge,” Perry Director of Intelligence Brendan Carroll said.
CarGurus currently leases a little more than 185K SF across three office buildings in Cambridge. CBRE and Newmark Knight Frank represented the company in the 1001 Boylston deal.
The lease is expected to begin 12 months after 1001 Boylston delivers to market, “not later than March 15, 2022,” according to the SEC filing. Construction is expected to start “on or around” March 15 of this year, now that the developer has an anchor tenant in hand.
If all goes to plan, 1001 Boylston will be the first air rights development over the Mass. Pike in Boston since the Copley Place mall in the 1980s.
Several projects are currently proposed, including the Fenway Center and the Viola, which Peebles Corp. won the rights to five years ago and would be across the street from Parcel 12.
Others have failed, including the Columbus Center between Back Bay and the South End and 1000 Boylston, a luxury condo proposal Weiner Ventures pulled the plug on in 2019 and has since sparked a $100M lawsuit from development partner Suffolk Construction and its CEO, John Fish.
Jay Rickey contributed reporting to this story.
