Despite continued silence from its New York-based owner, Boston’s One Beacon St. does appear headed to the commercial real estate trading block, with additional sources now backing claims that surfaced last week indicating the 34-story tower is being put up for sale. The Feil Organization has owned One Beacon St. for slightly more than a year, paying $340 million for the 1.1 million-square-foot building in October 2004.
“It looks that way,” one source said of Feil offering the asset to the market, a plan originally reported last week on Banker & Tradesman’s Web site, BankerandTradesman.com. The Feil Organization is said to be retaining Cushman & Wakefield of Massachusetts to negotiate a sale, although even that decision has yet to be confirmed. CEO Jeffrey J. Feil did not return phone calls regarding the situation by press deadline, while a member of Cushman & Wakefield’s Capital Markets Group refused to say whether that team has indeed been hired to trade the tower.
Cushman & Wakefield is certainly familiar with One Beacon St., having helped the previous owners market the building the last time it changed hands. The heft of that previous deal was considered impressive enough at the time, but some observers said they believe the Feil Organization will easily surpass the earlier sales figure. At this point, it is unclear whether an asking price has been established or how soon the opportunity might be made available to potential investors.
As to a motive for flipping One Beacon St., few observers spoken with could offer specific reasons why the Feil Organization is going the sales route, although the most obvious would be the notion that the firm could reap a substantial windfall given the continued interest in commercial real estate, especially in downtown Boston. While the Feil Organization bought One Beacon St. during an active investment period, the pace has quickened to an even larger degree since then, as evidenced by the pending sale of One Federal St. in Boston for an astounding $518 million.
Just three years younger than One Beacon St., which opened in 1972, One Federal St. is under agreement to Tishman Speyer Properties for more than $470 per square foot, among the highest prices ever paid for a Boston office building. Cushman & Wakefield is also the broker for that tower.
According to one Boston real estate broker, the Feil Organization has been aggressively working to lease up One Beacon St., and was seemingly doing well through the assistance of its leasing agent, CBRE/New England. But while occupancy is on the rise in the tower and rents throughout the downtown market finally appear to be ready to increase substantially this year, the broker said the unending crush of investment capital may have offered the Feil Organization a faster way to reap its projected returns.
One source quoted in the BankerandTradesman.com Web article indicated as much, relaying that a Feil Organization principal had spoken of a recent partnership meeting in which the new strategy was adopted as the preferred approach. Depending on who buys One Beacon St., the sale could open up the opportunity for local firms to manage the building for the new owners, a chance unavailable given the Feil Organization’s approach of self-management.
