300 A St., a one-time warehouse that recently has been converted into modern office space, is among the 17 buildings still owned by Boston Wharf Co. in the Hub’s Fort Point Channel area.
After nearly 160 years, Boston Wharf Co. is preparing to set sail from the Hub’s Fort Point Channel district, but it appears company president Robert N. Kenney might be left standing at the dock – willingly.
According to industry sources, Kenney is angling to acquire the remaining piece of Boston Wharf’s real estate portfolio in the district, a swath of more than a dozen aging warehouses and factory buildings running along and between A, Melcher and Summer streets. The dominant landlord in Fort Point Channel since the mid-1800s, Boston Wharf has been steadily divesting its holdings there during the past few years, including last week’s $34 million sale of two buildings totaling 175,000 square feet, one of which is Boston Wharf’s headquarters at 253 Summer St.
Kenney was unavailable for comment by Banker & Tradesman’s press deadline, but sources insisted that the real estate veteran is pursuing the acquisition of Boston Wharf’s remaining properties. “That is correct,” one source acknowledged, while another reported that Kenney is seeking out financial partners to participate in the ownership. It is unclear what price the package would trade for, or whether any outside offers are being entertained as well. In a Boston Globe article last week regarding the latest transaction, Kenney indicated that Boston Wharf had no intention of selling its remaining Fort Point Channel holdings, estimated at approximately 1.2 million square feet. The firm is eyeing the final piece of the portfolio to create potential development opportunities, Kenney offered in the article.
Kenney did provide an interesting quote to the Globe when he noted that Boston Wharf would be paying rent for the first time following the sale of 253 Summer St., indicating that situation might lead to a move during the next 18 months. “I’d like to be in my own buildings down the line,” Kenney told the Globe.
To the Point
The sale of the latest piece to a group that includes Boston real estate developer Alan Leventhal and several family members leaves Boston Wharf with 17 properties in Fort Point Channel, several of which are located prominently on Summer Street at the gateway to the area. Beginning at the corner of Melcher Street, the assets include 263, 269 and 297 Summer St., plus several buildings farther up on both sides of Summer Street. Also remaining is a public parking garage on Necco Street and a five-story building at 300 A St., a one-time warehouse that has been recently converted into modern office space. GVA Thompson Doyle Hennessey & Stevens has been marketing that space on behalf of Boston Wharf Co., and has recently inked several tenants in the 111,000-square-foot building.
The disposition of Boston Wharf’s properties by its British parent, Peninsular & Oriental Steam Navigation Co., has been under way for the past five years. Interestingly, another group led by Leventhal began the trade-off in 2000, with his Beacon Capital Partners LLC acquiring a swath of older buildings along A Street that is being converted into a mix of office and residential space. More recently, an Indiana company paid $92 million last summer for 10 Boston Wharf properties off Congress Street in the Fort Point Channel area that are anchored by Thomson Financial Corp. Later in the year, Boston-based Berkeley Investments paid $97 million for 12 buildings totaling nearly 700,000 square feet.
Boston Wharf’s actions come at an interesting time for Fort Point Channel, a 3.9 million-square-foot office market that has seen its share of instability since the start of the new millennium. Emerging in the 1980s as a fringe office destination, the district struggled for years before attracting a host of high-tech companies in the late 1990s, prompting Boston Wharf to demolish several older structures and build new properties, including the Necco Street garage and 22 Boston Wharf Road, a combination of parking and office space acquired by Berkeley as part of its recent deal.
According to year-end 2004 figures provided by Spaulding & Slye Colliers, Fort Point Channel and the larger South Boston Seaport District had a vacancy rate of 15.4 percent following a sluggish leasing year, with negative net absorption of nearly 10,000 square feet. Even so, given the opening of the Ted Williams Tunnel to Logan International Airport and other new roadways connecting the south and west, Fort Point Channel is seen as one of the Hub’s most promising growth areas, while the district is also home to the massive Boston Convention & Exposition Center, an $800 million behemoth that recently opened.
As for Kenney’s future, most observers spoken with said they were unaware of any investment deal he might have in the works, but some claimed it would provide a fitting way for Boston Wharf to end its remarkable tenure in Fort Point Channel. Particularly since the 1980s, Kenney has played an integral role in the firm’s activities there, said one broker who maintained the sale to their local leader would be a welcomed move by Boston Wharf. “If it’s true, I certainly hope so,” said the broker. “To have Bob Kenney’s presence in the Fort Point Channel for the next 20 years would be a positive for everybody.”
