Barely three years after buying Boston’s 745 Atlantic Ave. office building, Lend Lease Real Estate Investments has agreed to sell the asset to Berkeley Investments, according to real estate sources.
“They do have it under agreement,” said one Boston broker, who maintained that Berkeley has begun due diligence work on the 11-story building, which was developed in 1988 by Trammell Crow Co. The source estimated the sales price to be in the $55 million range, or just north of $325 per square foot. Lend Lease acquired the 168,000-square-foot building in 1999 for $39 million on behalf of its Value Enhancement Fund III.
“It’s a nice building,” said the broker familiar with the sale. The source noted Lend Lease has successfully added a stable of solid tenants during its brief stewardship. Among the major players currently in the building are Key Bank, Iron Mountain and a satellite office of venerable Hub law firm Brown Rudnick. In addition, the asset has benefited from the recent opening of an Atlantic Avenue exit directly from the Massachusetts Turnpike following years of work on the Big Dig project.
Calls to Berkeley officials and to Holliday Fenoglio Fowler were not returned by Banker & Tradesman’s press deadline, but sources insisted Berkeley has committed to the property and hopes to close sometime in the spring. If the reports bear out, it would represent a solid beginning to Boston’s 2003 investment sales market. Holliday Fengolio Fowler has been retained to sell the building.
The latest commercial real estate sales agreement comes following an active 2002, in which such Boston office buildings as One Boston Place, 470 Atlantic Ave. and 50 Milk St. changed hands at or near record pricing. In the case of 50 Milk St., for example, an Australian investment group paid more than $400 per square foot for the Financial District tower. The building traded for $109 million.
Another Boston broker called the 745 Atlantic Ave. sale “an encouraging sign,” given the continued deterioration of office market fundamentals. Even with rents continuing to plummet and vacancies still on the rise, investors apparently remain bullish on buying in Boston, said the source. The broker added that the current real estate investment fervor bodes well for other Hub assets on the block, including One Beacon St., a downtown office tower briefly taken off the market last autumn that is again being offered up for sale.
