Owner Paradigm Properties, which reportedly has found a buyer for 31 Milk St. in downtown Boston, paid $9.9 million for the 102,000-square-foot office building in early 1998.
After scooping up commercial real estate throughout suburban Massachusetts and New Hampshire in recent years, Everest Partners has set its sights on downtown Boston, with the New York-based investment group reportedly agreeing to buy 31 Milk St. from Paradigm Properties. The 11-story, 102,000-square-foot office building hit the sales block in 2004 with an asking price of $25 million, although it is unclear how much the asset will fetch from Everest.
Calls to Paradigm and Everest officials last week were not returned by Banker & Tradesman’s press deadline, while Trammell Crow Co. principal James F. McCaffrey declined comment on the negotiations. Trammell’s investment group was retained last summer to market 31 Milk St. for Paradigm.
In any event, sources insist that Everest has inked a purchase-and-sale agreement for the building. “It is under contract,” one source told Banker & Tradesman last week, adding to a pile of commercial real estate properties changing hands in recent months. Coming off a record year for property sales in Greater Boston, 2005’s investment market shows no sign of slowing in the opening month, as underscored by last week’s sale of the Bay Colony Corporate Center in Waltham to Beacon Capital Partners for an astounding $274 million and the disposition a week earlier of the Riverfront Office Park in Cambridge to the RREEF Funds for $175 million.
Other Boston properties near 31 Milk St. that have traded during the past year include 100 Franklin St., 211 Congress St. and One Beacon St., with the latter tower yielding $340 million for the sellers, Prudential Real Estate Investors and Westbrook Partners. Also, the headquarters of Putnam Investments at Two Liberty Square is reportedly in the process of being acquired by ELV Assoc., while NAI Hunneman Commercial Co. last week brokered the sale of 109 State St. In the latter transaction, investor Daniel Safar paid $4.5 million for the 30,000-square-foot office building.
“This property is in a prime Financial District location and was attractive to many prospective purchasers,” NAI Hunneman principal Robert A. Tito said in a release after the sale was consummated. Tito was joined by NAI Hunneman principals David Ross and Carl Christie in peddling the building for the previous owner, 101 Doane LP. Tenants of 109 State St. include the Hamilton Co. and the Vermont Historical Society Museum.
After initially targeting southern New Hampshire in the late 1990s, Everest Partners has been steadily acquiring office and industrial buildings throughout Greater Boston, becoming one of the most prolific private investment groups in the region this decade. In early 2003, the firm secured seven office/R&D buildings in Hopkinton, Marlborough and Norwood, then later that year paid $6.2 million for 91 Montvale Ave. in Stoneham, a 3-story office building situated near Interstate 93. Everest has continued its local buying spree during the past 12 months, although it appears 31 Milk St. would be the firm’s first real estate conquest in downtown Boston.
First Investment
Conversely, Paradigm Properties made its initial foray in the Hub before branching out to such communities as Cambridge and Somerville. The 31 Milk St. building not only serves as the firm’s home, it also was Paradigm’s first investment. Lured by the multi-tenanted aspect of the property, Paradigm paid $9.9 million for 31 Milk St. in early 1998 and then joined forces with various partners to secure ownership in such nearby assets as 711 Atlantic Ave., One Washington Mall and 18 Tremont St. In its largest Boston deal, Paradigm partnered with the Carlyle Group in 2000 to buy 99 Summer St., a 20-story office building located near South Station. Purchased for $66 million, the 270,000-square-foot building was then acquired in mid-2003 by Glenborough Realty Trust for $68 million.
The sale of 31 Milk St. would complete another assignment for Trammell Crow’s busy investment team, which has carried over a few other deals from 2004. After trading more than 20 properties last year, Trammell is in the final stages of several other sales, including a multi-building property in North Andover and assets in Dedham and Westborough. As with 31 Milk St., McCaffrey declined to offer specifics on the status of the other deals in progress.
In the landmark Bay Colony sale, Cushman & Wakefield of Massachusetts somehow managed to trade the hulking four-building complex in barely a month, with hometown operation Beacon outmaneuvering several major real estate investors such as Hines Interests, Boston Properties and the RREEF Funds. Even with the suburban Boston office market continuing to struggle, the opportunity to pursue Bay Colony was apparently too great to pass up, yielding a record-setting price tag.
“It’s a one-of-a-kind asset,” Cushman & Wakefield of Massachusetts President Robert E. Griffin Jr. said last week in explaining the ardor toward Bay Colony. “There’s really nothing else like it available out there.”
Totaling just under 1 million square feet of Class A office space, Bay Colony sold for more than $280 per square foot, easily eclipsing the estimated $265 per-square-foot paid in 2000 for the nearby Waltham Woods Corporate Center. Griffin was joined by Edward C. Maher Jr., Marci Griffith Loeber and other members of the firm’s investment operation in brokering the Bay Colony sale after also handling the Riverfront Office Park deal. Bay Colony had been owned for 10 years by the Shorenstein Co. of San Francisco.
