Blackstone Group LP is selling its first Greater Boston office asset since the company’s takeover of Equity Office Properties Trust in 2007, and industry experts agree the firm will bring more local buildings to the market, likely before the year is over.
Blackstone, the country’s second largest landlord, has hired Holliday Fenoglio Fowler (HFF) to market Riverside Center in Newton, a 510,000-square-foot, Class A office property at 275 Grove St.
Although HFF was unavailable to comment, the property could fetch up to $180 million, according to one market source who asked for anonymity due to a conflict of interest. A spokesperson for Equity Office, known as EOP, confirmed the firm is planning to sell the asset.
EOP built the asset in 2000. Its major tenants include TechTarget, which occupies about 100,000 square feet, and McKesson, which leases about 60,000 square feet. Rents at the property range from the high $30s per square-foot to the low $40s.
Besides the sales activity, Andrew Maher, a managing director for EOP since 2007, has left the company. Maher, who headed up the firm’s Boston office, did not return phone calls seeking comment. According to one source with close knowledge of the situation, EOP was looking for someone more management-oriented to lead EOP’s Boston’s office, and Maher is more of "a senior leasing guy" than a manager. EOP has hired a headhunter to replace Maher, according to one source. Industry executives close to Maher said he made the decision to leave EOP and is considering starting his own firm.
Even so, Blackstone has said publicly it plans to divest itself of EOP, so the sale isn’t a surprise – it was really a matter of time. There has also been market chatter that Blackstone was considering taking its office portfolio public.
"The sales market is still very strong for very high quality assets," said one industry expert. "You’re seeing it downtown, in Newton, Waltham and Burlington, where there’s still strong investor interest. But Equity Office is potentially going to be selling down more of their suburban assets, and this is the first one."
Blackstone retained 13 properties in Boston, seven in Cambridge and five in the suburbs, after it took over EOP for $39 billion. The firm resold upwards of $30 billion worth of properties to pay down some of its debt.
