The CAR Governing Committee at its September 16, 2015 meeting authorized CAR’s newly elected president, Natalie Hubley, (See Agency Checklists’ September 1, 2015 article: “Natalie Hubley is the New President of CAR”) to execute a lease to move CAR’s offices to 101 Arch Street, Boston when CAR’s present lease at 225 Franklin Street expires in October 2016.
CAR will join the AIB, IFB and the WCRIB as a tenant in its new location
An important factor in CAR’s selection of 101 Arch Street was the strong presence of insurance industry – funded organizations currently at that location, including the Automobile Insurers Bureau (AIB), the Insurance Fraud Bureau of Massachusetts (IFB), and the Workers ’ Compensation Rating and Inspection Bureau of Massachusetts WCRIB.
Additionally, an advantage that will accrue to CAR by leasing at 101 Arch Street is that the AIB is expanding its conference room space on the fourth floor of the building. The AIB has agreed, with the landlord’s blessing, to enter into a side-agreement with CAR that will allow CAR to share the AIB’s new conference room facilities. As a result, CAR will save on its lease space and build out costs.
CAR’s Ad Hoc Relocation Committee explored options in suburbs as well as Boston
The CAR Governing Committee established an Ad Hoc Relocation Committee to review and recommend a suitable location for CAR’s move.
At the Governing Committee’s request, the Ad Hoc Relocation Committee reviewed the viability of CAR relocating to a suburban location, as an alternative to downtown Boston when its lease at 225 Franklin Street expired.
Ultimately, the Ad Hoc Relocation Committee decided that a number of concerns mitigated against CAR relocating outside of Boston. These concerns included: the potential impact on committee participation and the commuting burden on employees: the potential effect on access to CAR by regulatory bodies such as the Division of Insurance and the Attorney General’s office imposed by a suburban location; and the concern of CAR not remaining within the general vicinity of other industry organizations such as the Automobile Insurers Bureau, where cost saving opportunities, such as sharing conference space, might be realized.
Eventually, CAR staff visited a number of possible buildings for CAR to consider. With CAR’s broker, the CAR staff, led by Ms. Hubley, found that three of the locations, 101 Arch Street, 50 Milk Street, and 2 Center Plaza, were deemed a good fit for CAR’s needs. After reviewing proposals from these three building the Ad Hoc Relocation Committee focused on 101 Arch Street as offering CAR the best facilities at a fair price.
Ten year lease at market rate for 13,000 square feet
The fifty-four page lease that CAR has negotiated will provide CAR with 13,700 square feet of space in a Class A office building in downtown Boston. The lease is for ten years or until 2026 with an option to renew for five years until 2031.
The CAR Governing Committee minutes did not specify the price per square foot but a good estimate would be a base rent of approximately $46.00 per square foot per annum before common area charges. This estimate is based on a reference in the minutes that the landlord had required a security deposit of “$157,504 which comes to approximately three months’ rent.” Extrapolating that three month rent figure to a full year and dividing that number by the square footage gives a price per square foot of $45.98, which appears to be a fair market rate for a building of this quality.