Bloom returns to the high-tech beltway

WALTHAM -- Employees of software company Pyxis Mobile Inc. remember feeling lonely in 2003 when they moved into Reservoir Place, a sprawling silver office building overlooking Route 128.

"You'd walk down the corridors, and you'd hear the echoes," recalled T. L. Neff, executive vice president of Pyxis, which makes software that puts financial data on BlackBerry mobile devices.

Today, he has plenty of company. Occupancy at Reservoir Place, a 530,000-square-foot building with a signature clock tower over its main entrance, has climbed to 92 percent after dipping below 70 percent in 2002 when the dot-com frenzy evaporated. The building's atriums are filled with young techies, some in shorts and polo shirts, sipping cups of espresso and tapping away on wireless laptops.

The scene is much the same elsewhere on the high-tech belt known as Route 128 West, a ribbon of highway running from Lexington to Needham through rolling hills studded with office parks.

This beltway, which has seen several boom-and-bust cycles over the past quarter century, is back in growth mode. The vacancy rate for commercial real estate has tumbled to 14.7 percent, its lowest level since 2001, according to data from Richards Barry Joyce & Partners LLC, a commercial real estate brokerage firm in Boston.

Here in Waltham -- the heart of the technology cluster with nearly 20 million square feet of office space, the equivalent of more than 16 Prudential Towers -- the vacancy rate is even lower, 14.3 percent.

The growth is directly tied to the recovery of the technology sector, which has regained half of the 1.2 million jobs it lost nationally after the 1990s boom, said Mark Zandi, chief economist at Moody's Economy.com in West Chester, Pa. While the Boston area lagged the nation in recouping jobs until recently, it is now catching up, he said.

At the same time, venture capital investment has rebounded to the highest levels since 2001, spurring a new crop of Internet and other technology startups, and healthcare and biotechnology companies are expanding beyond Boston and Cambridge.

"Waltham is experiencing a boom," said Brendan Carroll, director of research for Richards Barry Joyce & Partners. "There's been aggressive absorption of commercial real estate, and that's been fueling high occupancy throughout Route 128 West."

But just as the high-tech industry is reinventing itself, so is Route 128. Despite its reputation as one of America's best known technology hubs, the beltway has long featured nondescript brick buildings housing some of the region's most innovative businesses. Today's businesses, and the professional service firms that have sprung up around them, clamor for "amenity-rich" environments. Developers are responding with properties modeled after the gleaming corporate campuses dotting suburbs like Reston, Va., or Menlo Park, Calif.

Reservoir Place, built in 1986 by developer Donald Tofias, was purchased in 1998 by real estate investment firm Boston Properties Inc. The new owner "rehabbed the guts of the building," adding granite in the lobby, accent colored paint, and a new heating, ventilation, and air-conditioning system, said Jason A. Fivek, leasing manager for Boston Properties, which owns and leases a dozen office buildings in Waltham and more than a dozen others up and down Route 128.

In the south atrium, sunshine floods through the skylights as employees of the building's more than 50 tenant companies line up for coffee at a Starbucks kiosk or duck into the Rebecca's Cafe for some food. They eat at tables arrayed around a Japanese stone garden.

The building is a self-contained world. Employees can work out at a fitness center, get their hair cut in a barbershop, barbecue on a patio, hail cabs or book theater tickets from a concierge service, and drop off dry cleaning at a shop where they can also buy newspapers and greeting cards -- without ever venturing to the parking lot.

"People who leave one of our companies and go to work somewhere else still come back here for haircuts," Fivek said.

The leasing manager points to the natural light in Reservoir Place, contending it boosts productivity. But lighting isn't the draw for all of the building's tenants. At Blue Fang Games, blinds are drawn and dim lamps illuminate developers hunched over their workstations.

"Believe me, most gamers like to play in the dark, or pretty close to it," said Hank Howie, president of Blue Fang, which develops games focused on the animal kingdom for computers and gaming consoles. "Some of our guys like windows, and some don't care."

Because many top graphic artists gravitate to California, home of the film industry, attracting talent is harder in the Boston area, Howie said. He said the location on Route 128 allows Blue Fang to draw from a wider pool, from New Hampshire to Rhode Island. The company has flexible work hours, so employees can avoid rush hours, and many work late into the night. For breaks, there's a rec room complete with poker table and flat screen television to tune in Red Sox games.

Many employees admit they are spoiled by the amenities and seldom leave the building, though some who previously worked downtown say they still hanker for the bustling streets of Boston or Cambridge where they can window-shop or bump into friends from other companies during their lunch hour. "We have a foosball table, so that breaks up the monotony out here," said Neff at Pyxis Mobile.

In contrast to the giant anchor companies, like Wang Laboratories and Digital Equipment Corp., that marked an earlier high-tech era, the roster of tenants in Route 128 office buildings today include dozens of smaller technology startups, many of them backed by venture capital. Joining them are the regional offices of national and global conglomerates, life sciences companies migrating west from Kendall Square, and a bevy of law, accounting, and consulting firms.

The office parks on Winter Street, overlooking the reservoir, boast the largest cluster of venture capital firms outside Silicon Valley.

"There may not be a lot of Googles or other big technology companies here," said Donald W. Parker , managing partner at Morse Barnes-Brown Pendleton, a law firm that has expanded five times within Reservoir Place and counts technology companies in the building among its clients. "But we have a lot of aggressive small and mid-sized businesses that are starting to make money off the Internet."

In a sign of optimism, premium office space is being built "on spec," before tenants have committed to locate there, with another 1 million square feet planned in Waltham by the end of the decade.

Boston Properties, the largest commercial property owner on Route 128 West, hopes to transplant the ambience of Reservoir Place to a 200,000-square-foot hillside complex, 77 CityPoint, its building on the other side of the highway. The new building will feature 7-foot, 4-inch-high windows and proximity to the Westin Hotel.

Fivek is confident there will be demand for space.

"Route 128 is becoming an international address," he said. "A lot of companies feel they need that address."

Robert Weisman can be reached at weisman@globe.com.