Ferris Launching Fixer-Upper Plan; BeeHive to Retool Aging Office StockNovember 17, 2023 — By Joe Clements
BOSTON — Certain certificates of occupancy matter more than others. In the case of 250 Turnpike Rd., aka Route 9, owner David M. Ferris has a vision he predicts could be the vacant 57,000-sf office building’s salvation—and for aging brethren darkened throughout suburban Boston—via a novel self-storage model serving tradespeople focused on the built environment.
“We are going to disrupt the trades industry in a good way and professionalize how independent contractors do business on a daily basis,” Ferris vows in telling Real Reporter he expects to have a “C.O.” by Tuesday that will enable a pre-Thanksgiving launch of his “BeeHive” platform at 250 Turnpike Rd., a foreclosed1980’s relic Ferris bought 18 months ago for $3.5 million and found while researching possible uses that a legion of solo and smallish contractors who ballooned during the pandemic were struggling to find cohesive space options, the warehouse sector tight as a drum and reaping record rents while retail self-storage proved ill-suited for commercial tenants needing access on a 24/7 basis.
“We want to give tradespeople an alternative to doing business from the back of their van or pickup truck,” says Ferris, a Southborough native who considers the potential so promising FD has two more assets tied up with the BeeHive platform center stage, 300 Billerica Rd. in Chelmsford set to close this coming Monday while 130 Lizotte Rd. in Marlborough is on tap for acquisition in early 2024.
CBRE Capital Markets is broker for the Chelmsford building that comprises 110,000 sf on two levels; calls to the team led by CBRE Executive VPs Scott Dragos, Douglas Jacoby and Christopher Skeffington were not returned as of press deadline, but Ferris acknowledges the commitment which market watchers have trading at $5.2 million, a matter he could not discuss prior to closing, but if accurate, that would be well below the $12.2 million 300 Billerica Rd. last sold for in September 2012.
With eyes also set on Florida, Ferris intends to open at least 10 BeeHive facilities in his back yard where he owns a number of mainstream industrial and office buildings, target areas for BeeHive the South Shore, Greater Milford and Worcester while Burlington and Woburn are deemed ripe for expanding the airspace north of Boston to complement Chelmsford.
The preferred size for a BeeHive building is similar to 300 Billerica Rd. and 130 Lizotte Dr., which is 100,000 sf, but Ferris reports there is ample land upon which to build upwards of 60,000 sf more at the latter site and 45,000 sf in Chelmsford, projects that would accommodate bigger requirements beyond the existing building where most of the units will be similar to Southborough, although Ferris says the second level of 300 Billerica Rd. could support spaces on a larger scale as well.
A key to providing BeeHive’s tenant amenities package that go beyond simple storage offerings ranging from 100 to 1,500 sf in the 395 units at 250 Turnpike Rd. is acquiring the properties at a certain discount to replacement cost, concurs Ferris who is fueling his transformation from financial advisor into real estate using proceeds of selling his wealth planning business to a national competitor, that deal this past year involving an operation he created over 10 years that had $1 billion of AUM when harvested.
Perhaps similar to devising a wealth management strategy, Ferris says once the general idea was conceived, BeeHive evolved to develop a broader concept beyond standard fare like storing materials, tools and work vehicles to offering pallet delivery; in-unit electrical outlets; business mailing addresses plus areas for tenants to meet customers and prepare quotes, print invoices, ship and receive supplies and perform other tasks “necessary to provide daily job responsibilities.”
A linchpin to the idea is a mobile app through which tenants can communicate with his company but also a network of commercial landlords who may be seeking services without requiring a bid, a realm Ferris as a property owner maintains many owners would be interested in having while providing tradespeople a way to enhance what may be a consumer-based residential clientele.
“We are doing every thing we can to make our tenants successful,” says Ferris. One manifestation of that is equipment rentals including Caterpillar excavators, scissor lifts, sand blasters, boom lifts and “other essential tools required for commercial and residential projects.” Amenities are being offered ala carte with basic monthly storage solutions in Southborough from $55 to $2,000.
Ferris intends to acquire 300 Billerica Rd. using an existing credit facility with Webster Bank, specific details of which he did not provide on LTV and other elements. Recognizing the struggles some are having transacting deals due to higher interest rates, Ferris also wants to send a message to those who might have BeeHive worthy prospects or other investment opportunities for sale, his announcement that “We are looking to buy right now” in stating he is using proceeds from selling the wealth management business to make all-cash commitments when appropriate, an element he maintains may look attractive to landlords on the fence of whether to soldier on or accept the dramatic changes negatively “dislocating” office prices at present and use the exit ramp. In his view, many hanger-ons have this year “begun to read the tea leaves” on a challenging recovery and are over the past tw months willing to sell at a discount.
“We are fortunate to be in this position,” he says of having “dry powder” to take on reclamation projects such as those in Southborough and lining up in Chelmsford and Marlborough, the 130 Lizotte Dr. asset presently owned by a firm that intended to occupy the space, having paid $4.85 million in October 2022 to a partnership led by Brady Sullivan Properties that had bought it out of foreclosure in December 2019, and then the new owner changed course and FD was introduced to the opportunity by Colliers Executive VP Kevin Hanna.
While Ferris could not discuss the negotiations that are being done, sources claim 130 Lizotte Dr. is under agreement for a price in the mid-$4 million range, one account placing it from $4.3 million to $4.4 million, or roughly $100 per sf. In a transaction that led to its foreclosure, the first-class, 100,000-sf building that dates to 1999 fetched $11.7 million in April 2014. As part of the bank’s foreclosure process, BSP spent $3.3 million for 130 Lizotte Dr. in December 2019, then dispatched it to the current owner that will apparently take a slight loss if the building does sell sub $4.5 million as sources maintain.
Ferris says his company will continue to evolve the BeeHive concept as it takes hold, that prospect helping to ramp up the anticipation of next week’s planned opening in Southborough where about half of the first floor has committed leases in place, its inagural tenants including a sprinkler-sytem installer and a landscape contractor. “We are very excited,” acknowledges Ferris who regards the mobile app of particular use for serving its tenants and the community at large. “With BeeHive, community members can easily request services and quickly link with our dependable network of customers,” one promotional missive pledges, adding, “We are committed to providing fair and prompt service quotes and ensuring immediate solutions for commercial projects, repairs and maintenance.”David M. Ferris Roy Sandeman Douglas Jacoby Daniel Hines Timothy Mulhall Anthony Hayes 300 Billerica Rd., Chelmsford MA