News Archives
April 15, 2009
Debt-hobbled commercial properties offer bargains
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It's hardly a flood of new money. But real estate investors who have huge stockpiles of cash are slowly starting to buy debt positions in buildings - signaling that many investors believe prices are nearing a low point after a yearlong free fall in property values. "There is a seismic shift going on in the market," said Jonathan Davis, chief executive of Davis Cos. "What we're seeing is the unwinding of trillions of dollars of excessive lending that occurred over the last four or five years."

His company recently began buying mortgages on properties whose owners are straining to meet high debt loads, so far about $125 million for buildings in Colorado and Southeastern states where loose lending practices led to a wave of loan defaults. He is now seeking investors for a $200 million fund and has hired executives to help lead the firm's investment efforts.

The volume of buying is expected to increase dramatically in coming months as banks and other lenders seek to unload troubled assets from their balance sheets - potentially at fire- sale prices that will mean heavy losses for the current owners but significant opportunities for buyers.

In Boston, Normandy Real Estate Partners bought enough of the debt on the John Hancock Tower to force its troubled owners into foreclosure, and then swooped in to buy the trophy property at auction two weeks ago for $660.6 million - roughly half of its $1.3 billion sale price in 2006.

It is unclear whether other trophy towers in the city will be affected, but real estate professionals said they expect additional foreclosures.

"There are other buildings around the city where there are rumblings of potential problems that haven't hit yet," said Greg Vasil, chief executive of the Greater Boston Real Estate Board. "It's not easy to build in Boston, but you might find a great deal on something that already exists."

Potential buyers have been on the sidelines for months, wary of overpaying in a down market. Paul Marcus, chief executive of Marcus Partners, said prices are getting to be too good to turn down.

"We're starting to get much more aggressive as the values are coming down," he said. "I think the opportunities will really peak in the third and fourth quarters of this year."

Marcus said he plans to buy $400 million in debt and property during the next several months. He said he has bid on about 15 loans so far, but sellers have not been willing to accept the low amounts he and other bidders offered.

"Only about 20 percent of what's available has traded," he said. "I believe right after Labor Day that number will be 80 percent."

Many investors are waiting to see final details in the Obama administration's plan to help private firms buy so-called toxic assets from banks and other financial firms. The administration's initiatives provide up to $2 trillion in government money to help purchase those assets.

"We're going to be very interested in looking at what role the government can play in creating opportunities," Davis said. "There is going to be a very significant policy intervention. It's clear the Obama administration is committed to that."

To get ready for the buying blitz, Davis has hired Cappy Daume, a former executive with the real estate firm Jones Lang LaSalle, and Mark Consoli, previously chief operating officer of Northland Investment Corp.

April 22, 2009
Alkermes will relocate from Cambridge to Waltham
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Drug maker Alkermes Inc. said it will relocate its corporate headquarters from Cambridge to Waltham, a move it expects to complete early next year.

In a press release, the company said it has signed a lease agreement and will build out a 100,000 square foot facility on Winter Street in Waltham.

Alkermes makes Risperdal Consta, a schizophrenia treatment, and Vivitrol. Vivitrol aims to reduce cravings for alcohol. A March story in the Globe noted that Vivitrol has been a disappointment, in part because many alcohol treatment programs resist prescribing drugs. (To read that story, please click here.)

In its press release, Alkermes noted that it expects the relocation to Waltham to result in annual cash savings in fiscal year 2011 and beyond of about $8 million.

Alkermes is the latest biotechnology company that plans to move operations out of Cambridge in search of cheaper space in the Boston suburbs. (To read a Globe story about that trend, please click here.)

Today's press release included a statement from Jim Frates, chief financial officer of Alkermes.

“By taking advantage of the current real estate market conditions, we are able to improve our business operations by moving to a central location in a brand new facility," Frates said. "This relocation to Waltham offers economic advantages by providing a lower cost of doing business and increasing our flexibility to invest in our proprietary product pipeline. We look forward to being part of Waltham’s business community.”

An Alkermes spokeswoman said that Alkermes has found a company that will sublease its Cambridge space following the move by Alkermes to Waltham. Alkermes is not identifying the company at the company's request, the spokeswoman said.

The signing of the Waltham lease by Alkermes was first reported on the website of the Boston Business Journal. According to the BBJ, Vertex Pharmaceuticals Inc. will sublease Alkermes' Cambridge office space.

(By Chris Reidy, Globe staff)

April 22, 2009
Alkermes signs lease to relocate HQ
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Alkermes Inc. signed a lease on Wednesday for 100,000 square feet and will relocate its Cambridge headquarters to Waltham, Mass.

The deal, first reported by the Boston Business Journal in February, has been underway for months.

Alkermes (NASDAQ: ALKS) expects to move out of its 142,0000-square-foot Cambridge headquarters at 88 Sidney St. later this year. The company’s Cambridge lease does not expire until 2012 but Vertex Pharmaceuticals Inc. will sublease Alkermes’ Cambridge offices. Vertex’s real estate broker did not immediately respond to a call. "I wouldn't comment on whether we're going to sublease or not," said Zachary Barber, a Vertex spokesman.

Alkermes will downsize and relocate its headquarters to the 180,000 square-foot office and lab building at 850 Winter St. The move will reportedly save the company between $9 and $16 per square foot or about $750,000 a year.

The effort to restructure Alkermes began last March when the biotech company announced it would eliminate 150 jobs and close its Chelsea manufacturing plant. The move reduced the company’s workforce by about 18 percent to 235 people in Cambridge and another 400 employees at an Ohio manufacturing facility. The layoffs were a result of a decision by Eli Lilly and Co. to end a program to produce an inhaled insulin.

Alkermes is the latest in a string of Cambridge biotech companies — including Shire, Altus Pharmaceuticals and ImmunoGen Inc. — that have decided to leave East Cambridge for cheaper suburban locales.

The Waltham building was completed last May and is located in the Reservoir Woods campus. Alkermes will be the first tenant to move into the property which is jointly owned by Marcus Partners, The Davis Cos. and Prudential Real Estate Investors.

The building has been certified as LEED Gold by the U.S. Green Building Council. The Reservoir Woods campus is home to corporate tenants PerkinElmer Inc., Battery Ventures, Fresenius Medical Care and National Grid.

CB Richard Ellis represented the ownership in the transaction and Colliers Meredith & Grew represented Alkermes Inc.

April 24, 2009
100,000 square-foot lease signed at Reservoir Woods campus
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WALTHAM, MASS. — Alkermes has signed a 100,000-square-foot lease at the Reservoir Woods campus in Waltham. The technology company plans to relocate its headquarters from Cambridge to the newly leased space, which is located at 850-852 Winter Street, a new 180,000-square-foot LEED-Gold certified office and lab building. The Reservoir Woods campus sits on 120 acres between the Massachusetts Turnpike and Route 2 at exit 27 off Route 128/US I95. The development is owned by a joint venture between affiliates of Davis Marcus Partners and Prudential Real Estate Investors. CB Richard Ellis represented the ownership in the transaction and Joseph Flaherty of Colliers Meredith & Grew represented Alkermes. The new tenant plans to complete their move by early 2010.

April 24, 2009
National Grid Opens Energy-Efficient New England Corporate Office Building in Waltham
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WALTHAM, Mass. -- National Grid today hosted a ribbon-cutting ceremony to commemorate and celebrate the opening of its New England corporate office in the Reservoir Woods East office park at 40 Sylvan Road in Waltham, Mass.

Nearly 100 invited guests, including Massachusetts Secretary of Energy and Environmental Affairs Ian Bowles, were on hand to participate in the ceremony and offer support for the company’s dedication to environmental protection, leadership in energy efficiency and commitment to reducing its carbon footprint. The company’s 312,000 sq. ft. energy saving workspace is believed to be among the region’s most energy-efficient facilities. The design and sustainable construction of the new facility is intended to earn the building a LEED gold rating.

The U.S. Green Building Council’s LEED (Leadership in Energy and Environmental Design) rating system is the nationally accepted benchmark for the design, construction and operation of high-performance green buildings.

“I applaud National Grid’s leadership in demonstrating clean energy of all sorts in its own facility,” said Secretary Bowles. “Green buildings are a key component of our clean energy future, and National Grid’s new corporate office employs the combination of energy efficiency and on-site renewable energy we need to cut greenhouse gas emissions, reduce our reliance on fossil fuels, and increase energy independence.”

Construction of National Grid’s three-story, mainly glass exterior facility began in June 2007 and incorporates numerous high-performance, energy-saving and environmentally-friendly features. The facility centralizes and consolidates the company’s New England offices into a single facility and will house senior management for the company’s electricity and gas groups and many other administrative teams.

More than 1,800 employees will work at the new facility. Employees will begin occupying the building in shifts starting on May 26, 2009. The move will be completed during late July.

“Our new facility is more than just the hub of New England corporate functions. It is a symbol of transformation and growth that will help us meet our business needs and the needs of our customers well into the future. This building also tangibly demonstrates our commitment to being an innovative leader in energy management and to safeguarding our environment and we are excited to be here, “ said Tom King, president of National Grid in the U.S. “We are pleased to be part of the New England landscape and to occupy a building in which our employees can be proud, and enjoy a healthy, bright, sustainable environment that supports our National Grid culture.”

National Grid’s office includes the following energy saving and environmental features:

  • Optimized lighting that requires 40 percent less electricity than a code-compliant building in Mass.; occupancy sensors; task oriented lighting; and daylight sensors at workstations saving more than 800,000 kwh per year – enough to power 133 homes for one year
  • High efficiency heating and cooling systems with adaptable controls to sense outdoor and indoor temperatures
  • Water conservation measures that are expected to reduce water use by approximately 2.4 million gallons per year through use of dual-flush toilets; automatic sensor faucets and a recycled storm water system
  • Approximately 20,000 square feet of roof top solar power panels (736 photovoltaic cells) that generate enough electricity to power about 30 homes each year and offsets 400,000 lbs. of CO2 annually
  • Exterior shading devices on southern facing exposures
  • A highly reflective white roof
  • Superior air quality systems that feature carbon dioxide sensors installed in ventilation ducts; air refreshed at a rate of 1 1/3 air changes per hour from outside air; all adhesives, sealants, paints and coatings contain low quantities of volatile organic compounds (VOC’s)
  • Sustainable materials: 28% of the materials and furnishing are recycled; 66% of the wood is sourced from sustainably-managed forests, including café floors made of rapidly renewable bamboo with environmentally preferable glue; carpet tiles consist of 42% pre-consumer recycled materials; workstation fabrics are made of 100% recycled content; recycled aluminum ceiling tiles that are manufactured regionally
  • More than 93% of construction waste was recycled

National Grid’s New England corporate office was designed and built in cooperation with Reservoir Woods developer Davis Marcus Partners; project manager Jones Lang LaSalle; interior architect Sasaki Associates; construction manager John Moriarty & Associates; mechanical engineers AHA Consulting Engineers, Inc. and base building architect ADD, Inc.

National Grid is an international energy delivery company. In the U.S., National Grid delivers electricity to approximately 3.3 million customers in Massachusetts, New Hampshire, New York and Rhode Island, and manages the electricity network on Long Island under an agreement with the Long Island Power Authority (LIPA). It is the largest distributor of natural gas in the northeastern U.S., serving approximately 3.4 million customers in Massachusetts, New Hampshire, New York and Rhode Island. National Grid also owns over 4,000 megawatts of contracted electricity generation that provides power to over one million LIPA customers.

April 27, 2009
Boston-Area Biotech Firms Seek Cheaper Space in Suburbs
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Drug maker Alkermes Inc. last week became the latest in what has become a growing line of biotech firms leaving Cambridge, Mass., in search of less expensive office and laboratory space in the suburbs. The company plans to relocate to a 100,000-square-foot facility in Waltham early next year, a move that Alkermes says will eventually save some $750,000 a year.

“By taking advantage of the current real estate market conditions, we are able to improve our business operations by moving to a central location in a brand new facility,” noted Alkermes CFO Jim Frates. “This relocation to Waltham offers economic advantages by providing a lower cost of doing business and increasing our flexibility to invest in our proprietary product pipeline.”

Alkermes joins several other biotech companies who have relocated from the relatively costly Cambridge market. Last year, AMAG Pharmaceuticals Inc. moved its headquarters to nearby Lexington, where it will soon be joined by Shire Human Genetic Therapies, which is planning to move its headquarter there as well. Akermes’ new home of Waltham has seen both Atlus Pharmaceuticals and ImmunoGen relocate there from Cambridge.

And developers are at work to try to keep up with the increased demand for suburban space. Last summer, Patriot Partners L.L.C. unveiled plans to build the largest life sciences complex in New England in suburban Burlington. The project is planned to include some 2 million square feet of laboratory and office space.

For Alkermes, however, the move was a bit more complicated than simply picking up sticks in Cambridge. The firm is still under lease at its current facility in Cambridge, which it will sublease to Vertex Pharmaceuticals Inc. until 2012.

The company’s new digs are located in the Reservoir Woods campus, and is owned by a joint venture of Marcus Partners, The Davis Cos. and Prudential Real Estate Investors. Alkermes will be the first tenant to move into the property, which is certified LEED Gold by the U.S. Green Building Council.

Colliers Meredith & Grew represented Alkermes in the lease negotiations, while CB Richard Ellis Inc. represented the building owner.

May 5, 2009
Davis Marcus closes $30.9M refinancing
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Davis Marcus Partners has completed a $30.9 million refinancing of a building at its Reservoir Woods East campus in Waltham, Mass.

The $30.9 million loan was secured through Capital One for the building at 117 West St., which is owned in a joint venture between Marcus Partners, The Davis Cos. and Prudential Real Estate Investors. The refinancing includes both the 138,000-square-foot building and a 28.7 acre-parcel that has been permitted for 500,000 square feet of development.

The building at 117 West St. is fully leased to Verizon Communications Inc. (NYSE: VZ).

Reservoir Woods East is a 54-acre parcel that was purchased from Verizon in December 2006 by Davis Marcus Partners with Prudential Real Estate. As part of the deal, Verizon leased back the West Street building from the new owners. The 1.2 million-square-foot Reservoir Woods East and neighboring West campuses are leased to corporate tenants such as PerkinElmer Inc. (NYSE: PKI), Battery Ventures, Fresenius Medical Care and National Grid.

May 5, 2009
Reservoir Woods East Completes $30.9M Refi With Capital One
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WALTHAM, MASS. —Davis Marcus Partners, a venture between Marcus Partners and The Davis Companies, in partnership with Prudential Real Estate Investors, has completed a $30.9 million refinancing with Capital One for 117 West St. located on its Reservoir Woods East campus in Waltham. The refinancing includes both the 138,000-square-foot recently upgraded building and the adjacent 500,000 square feet of recently permitted, developable land. The building is fully leased to Verizon and houses its FiOS testing, design and engineering functions. Together, Reservoir Woods East and West provide a campus environment with 120-acres of wooded landscape in Waltham between the Massachusetts Turnpike and Route 2 at exit 27 off Rt. 128/US I95.

May 18, 2009
National Grid opens new ‘green’ HQ
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National Grid celebrated the opening of its new “green” corporate office in the Reservoir Woods East development in Waltham Monday.

The 312,000-square-foot building was designed to reduce the company’s carbon footprint as well as consolidate employees into one central New England office. Located at 40 Sylvan Road, construction on the three-story facility began in June 2007. National Grid expects the site to earn a LEED (Leadership in Energy and Environmental Design) gold rating from the U.S. Green Building Council.

The facility will house senior management for the company’s electricity and gas groups and other administrative teams. More than 1,800 employees will move into the building by late July.

National Grid’s New England corporate office was designed and built in conjunction with developer Davis Marcus Partners. The project team included: project manager Jones Lang LaSalle; interior architect Sasaki Associates Inc.; construction manager John Moriarty & Associates; mechanical engineers AHA Consulting Engineers Inc.; and architect ADD Inc.

National Grid delivers electricity to approximately 3.3 million customers in Massachusetts, New Hampshire, New York and Rhode Island. It is the largest distributor of natural gas in the northeastern United States and also owns over 4,000 megawatts of contracted electricity generation that provides power to over one million customers.

May 19, 2009
National Grid opens new headquarters
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WALTHAM – National Grid has opened its new, 312,000-square-foot New England headquarters in Waltham. The British utility company is consolidating its New England offices in one location, with more than 1,800 employees expected to work there. The workers will start moving into the three-story building on May 26, and the move will be completed by the end of July. The building features nearly 20,000 square feet of rooftop solar panels – enough to generate enough power for about 30 homes each year.

May 19, 2009
National Grid HQ Aims for LEED Gold Status
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Energy distribution company National Grid is opening its new energy-efficient U.S. headquarters in Waltham, Mass.

The building takes advantage of optimized lighting, rooftop solar arrays, water conservation measures and high efficiency heating and cooling. It was built using a variety of recycled and sustainably sourced materials, according to a press release.

According to the release, the building features:

  • Optimized lighting that requires 40 percent less electricity than a code-compliant building in Mass.; occupancy sensors; task oriented lighting; and daylight sensors at workstations saving more than 800,000 kwh per year - enough to power 133 homes for one year
  • High efficiency heating and cooling systems with adaptable controls to sense outdoor and indoor temperatures
  • Water conservation measures that are expected to reduce water use by approximately 2.4 million gallons per year through use of dual-flush toilets; automatic sensor faucets and a recycled storm water system
  • Approximately 20,000 square feet of roof top solar power panels (736 photovoltaic cells) that generate enough electricity to power about 30 homes each year and offset 400,000 lbs. of CO2 annually
  • Exterior shading devices on southern facing exposures
  • A highly reflective white roof
  • Superior air quality systems that feature carbon dioxide sensors installed in ventilation ducts; air refreshed at a rate of 1 1/3 air changes per hour from outside air; all adhesives, sealants, paints and coatings contain low quantities of volatile organic compounds (VOC’s)
  • Sustainable materials: 28 percent of the materials and furnishing are recycled; 66 percent of the wood is sourced from sustainably-managed forests, including cafe floors made of rapidly renewable bamboo with environmentally preferable glue; carpet tiles consist of 42 percent pre-consumer recycled materials; workstation fabrics are made of 100 percent recycled content; recycled aluminum ceiling tiles are manufactured regionally
  • More than 93 percent of construction waste was recycled
  • Because the company is consolidating work forces from several area buildings into the new headquarters, National Grid’s carbon footprint per employee will fall.About 1,800 people will work in the building.

The building was constructed to meet Gold-level LEED status from the U.S. Green Building Council.

National Grid has implemented a pilot smart grid project in Massachussets.

National Grid earlier this year implemented a program to incentivize carbon reduction among its executive team.

June 19, 2009
Reservoir Woods lands tenant, 80% leased
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LLP has signed a 10-year, 31,140-square-foot lease at Reservoir Woods in Waltham, Mass.

The law firm will relocate its local headquarters from 610 Lincoln St. in Waltham to 850 Winter St. in Waltham in December. The deal brings 850 Winter St. to 80 percent-leased and the entire, 1.2 million-square-foot Reservoir Woods campus to 97 percent leased.

Reservoir Woods is owned in a joint venture between Davis Marcus Partners, a venture between Marcus Partners and The Davis Cos., and Prudential Real Estate Investors.

The building at 850 Winter St. is located on the Reservoir Woods West campus. Together, Reservoir Woods East and West comprise 120-acres of corporate office space in Waltham between the Massachusetts Turnpike and Route 2.

Reservoir Woods East and West are also home to corporate tenants National Grid, PerkinElmer, Alkermes, Verizon Laboratories, Battery Ventures and Fresenius Medical Care.

April 2009
Alkermes signs lease to relocate HQ
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Alkermes Inc. signed a lease on Wednesday for 100,000 square feet and will relocate its Cambridge headquarters to Waltham, Mass.

The deal, first reported by the Boston Business Journal in February, has been underway for months.

Alkermes (NASDAQ: ALKS) expects to move out of its 142,0000-square-foot Cambridge headquarters at 88 Sidney St. later this year. The company’s Cambridge lease does not expire until 2012 but Vertex Pharmaceuticals Inc. will sublease Alkermes’ Cambridge offices. Vertex’s real estate broker did not immediately respond to a call. "I wouldn't comment on whether we're going to sublease or not," said Zachary Barber, a Vertex spokesman.

Alkermes will downsize and relocate its headquarters to the 180,000 square-foot office and lab building at 850 Winter St. The move will reportedly save the company between $9 and $16 per square foot or about $750,000 a year.

The effort to restructure Alkermes began last March when the biotech company announced it would eliminate 150 jobs and close its Chelsea manufacturing plant. The move reduced the company’s workforce by about 18 percent to 235 people in Cambridge and another 400 employees at an Ohio manufacturing facility. The layoffs were a result of a decision by Eli Lilly and Co. to end a program to produce an inhaled insulin.

Alkermes is the latest in a string of Cambridge biotech companies — including Shire, Altus Pharmaceuticals and ImmunoGen Inc. — that have decided to leave East Cambridge for cheaper suburban locales.

The Waltham building was completed last May and is located in the Reservoir Woods campus. Alkermes will be the first tenant to move into the property which is jointly owned by Marcus Partners, The Davis Cos. and Prudential Real Estate Investors.

The building has been certified as LEED Gold by the U.S. Green Building Council. The Reservoir Woods campus is home to corporate tenants PerkinElmer Inc., Battery Ventures, Fresenius Medical Care and National Grid.

CB Richard Ellis represented the ownership in the transaction and Colliers Meredith & Grew represented Alkermes Inc.

January 2009
Gold standard: LEED-certified building a product of collaboration
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Jonathan Davis and Paul Marcus had developed many green building projects in their careers, but they had never worked with a client with such hands-on knowledge of energy efficiency before building for National Grid US.

The joint venture between The Davis Cos. and Marcus Partners, with the help of architectural company ADD Inc., resulted in a 316,000-square-foot green building that has been pre-certified to receive the U.S. Green Building Council’s LEED gold certification.

National Grid’s new headquarters, situated in the Reservoir Woods east campus in Waltham, will include a host of green design features, 34 in all, from rooftop solar panels to systems that recapture stormwater and use it for sewage systems. Once completed, the $135 million building will be one of the largest green commercial buildings in the state (the platinum-certified Genzyme Center in Cambridge being larger).

"It was clear it was going to be a collaboration (with National Grid). They did have an extremely active role throughout the process, and they had very ambitious goals for the environmental sustainability of the building," said Davis.

The collaboration between Davis, Marcus and National Grid started when the utility was looking for space after its acquisition of Keyspan Energy in 2007. It knew it needed a facility that would meet not only the physical needs of the company, but serve as an example to customers that it was dedicated to environmental stewardship.

"We are going to be significantly growing our energy-efficiency program and for us to be able to go in to clients, there is an issue of credibility," said Tom King, president of National Grid’s U.S.-based operations. "It’s a leadership issue."

When it settled upon Reservoir Woods as its new home, National Grid established a lofty goal for its build to suit construction: to achieve an 80 percent reduction in its greenhouse gas emissions by 2050. To do this, the company invested in sustainably harvested building materials, high-efficiency heating and cooling systems and even sunshades on south-facing windows to keep the building warm in the winter and cool in the summer.

The hardest part of designing the building was not its size, but making the step from LEED silver to LEED gold without breaking the bank.

"You can go from certified to silver without much trouble or extra cost," said Michael Hass, the project’s architect. “To get up to gold is a much bigger hurdle. We went through a lot of ideas and looked at what was feasible."

Some ideas, like powering the building with fuel cell technology, were not cost effective, Hass said. But all-in-all, the group was able to integrate the vast majority of its 55 green features talked about at a price well below the $60 to $80 per square foot premium on LEED gold buildings, Marcus said.