Berwind Property Group has acquired 35 Village Road in Middleton, a 225,000-square-foot office building located just off Route One and Interstate 95, for nearly $19 million.
In a commercial real estate sale that appears to offer both upside and a measure of stability, Berwind Property Group has acquired 35 Village Road in Middleton, a 225,000-square-foot office building located just off Route One and Interstate 95. The 14-year-old building was purchased from Verizon Information Services for $18.9 million.
“It’s a good deal for everybody,” said CB Richard Ellis/Whittier Partners principal Gary J. Lemire, who brokered the sale along with colleagues David Wright and Amy Perlman. As part of the sale, Verizon has agreed to lease back 125,000 square feet in the building, which has been renamed the Ferncroft Corporate Center. Also, Berwind has retained CBRE/Whittier to serve as exclusive leasing agents for the vacant space, with Mark Reardon and Jason Levendusky tapped to head up that assignment. CBRE/Whittier represented the seller and procured the buyer, with Berwind representing itself in the negotiations.
The sale is just the latest transaction in an active commercial real estate market in Massachusetts, one which has seen a variety of properties change hands in recent months, including a number of deals in fringe markets such as those to the north of Boston. Just down the road off Route 128 in Wakefield, for example, a trio of properties on Audubon Road are in the process of being sold, generating interest from both users and investors. ST Real Estate Trust, for example, recently acquired 360 Audubon Road and plans to convert part of the space for its own use and will lease the remainder to third-party tenants.
‘A Ton of Interest’
Nordlund Assoc. principal Christopher Everest represented the buyer in the Audubon Road deal, while David Connolly of CBRE/Whittier acted on behalf of the seller. According to Everest, ST will undertake an active renovation program at the 41,000-square-foot building, including facade improvements, a new lobby and state-of-the-art mechanical systems.
“It’s going to be a new building, effectively,” said Everest, adding that the owners will let the marketplace determine what sort of space will be created. “One of the nice things about a flex building is you can design it to meet the tenant’s needs,” noted Everest, who estimated that the new ownership will retain roughly 5,000 to 10,000 square feet for its own use.
Also said to be on the block is 14 Audubon Road, a combination distribution/office building, as well as 96 Audubon Road, with some sources claiming last week that the latter asset is under agreement. Greg Klemmer of Klemmer Assoc. is brokering that deal, but was unavailable last week to discuss the status of the property. The 50,000-square-foot building was put on the market earlier this year with an asking price of $3.7 million.
Based in Winchester, Klemmer Assoc. has traded several buildings on the North Shore in recent months, and is currently marketing another asset in Newburyport, 4 Stanley Tucker Drive, for $5.4 million. Located in the Newburyport Industrial Park, the 8-year-old building features 73,000 square feet of space, as well as room for expansion.
As for 35 Village Road, Lemire said there was “a ton of interest” in the asset, allowing his client to selectively choose a buyer that it could be comfortable leasing space back from, as it did with 57 percent of the space. Based in Pennsylvania, Berwind is an experienced real estate owner and investor that also operates a number of independent businesses, some of which it relocates into its own real estate. Lemire said he was unsure whether Berwind has an internal tenant in tow for Ferncroft Corporate Center, but reported that leasing interest has been strong since the deal closed.
“It’s an excellent building with a ton of infrastructure in it,” said Lemire. At one point, 35 Village Road served as the headquarters of Verizon’s Yellow Page operation, said Lemire, requiring extensive data networks to be installed in the building. Other features include flexible floorplates, a full-service cafeteria and a 775-space parking garage, which provides a parking ratio of 4.5 vehicles for every 1,000 square feet leased.
Berwind is already familiar with the market, having previously owned 10 Centennial Drive in Peabody prior to selling that building to Principal Financial Group. Efforts to contact company officials by Banker & Tradesman’s deadline were unsuccessful, but in a press release issued last week, Vice President Albert J. Corr called the 8-story building “a complimentary addition to BPG’s New England portfolio.”
“The building is arguably the best office alternative for a tenant looking for space on the North Shore,” said Corr. Other Berwind holdings in the Bay State include 100 CambridgePark Drive in Cambridge, 181 and 187 Ballardvale St. in Wilmington, 8 Federal St. in Billerica and the Campus at Marlborough in Marlborough. The Middleton deal is the sixth investment made on behalf of Berwind’s Co-Investment Partnership LP, which seeks sale/leaseback opportunities from owner/users that are seeking liquidity.
