A prominent Downtown Crossing retail building at 350 Washington St., formerly home to Woolworth’s, has been placed on the sales market with an asking price said to exceed $100 million.
In apparent response to the strong investment climate for commercial real estate, particularly stabilized assets, the flood of new properties being put up for sale continues to flow unabated, with the latest additions including 350 Washington St. in downtown Boston and 130 Royall St. in Canton.
The Boston offering in the city’s Downtown Crossing district was known for decades as the home of Woolworth’s, but the demise of that off-price retailer led to the building’s purchase and overhaul by Eastern Development into a multi-tenanted retail complex. Current occupants include H&M, Marshall’s and T.J. Maxx, while the third floor of the hulking structure is leased to Boston Sports Clubs.
“It is on the market,” said one industry source. Banker & Tradesman first reported the sale last week on its Web site, BankerandTradesman.com. The source also claimed that Eastern Development is seeking $105 million to $110 million for the building, and said Cushman & Wakefield of Massachusetts has been retained as listing broker. C&W referred calls to Eastern, while officials there did not respond to inquiries by press deadline.
Never Better
In the Canton opportunity, sources said that Trammell Crow Co. has been hired to sell 130 Royall St. on behalf of its owners, Conroy Development Corp. and the Lone Star Funds. Calls to Trammell investment chief James McCaffrey were not returned by press deadline, but sources insisted that the 175,000-square-foot building is being marketed by the real estate services firm. A price was not available, but one source predicted that a long-term lease for the entire structure to the parent company of Dunkin’ Donuts should garner considerable attention from potential buyers.
“It’s exactly what people are looking for,” said the source, citing the 10-year agreement with Allied Domecq to lease the building. An adjacent property known as Blue View Corporate Center sold last year for $24.6 million, or about $130 per square foot.
After a somewhat slow beginning to 2004, a host of prime real estate has begun hitting the sales block, with C&W also receiving the assignment to sell the Hub’s 245 Summer St. and 7 Water St. on behalf of Fidelity Investments and Trammell Crow also said to be selling 116 Huntington Ave. in Boston for New Boston Fund. The key to attracting capital, most observers say, is for a property to offer a measure of stability through the coming months of economic uncertainty. If a building promises steady cash flow and good-credit tenants on its rent rolls, it will likely garner heavy attention from buyers, most agree.
One classic example nearing completion is Morgan Stanley’s acquisition of 225 and 235 Presidential Way in Woburn from National Development of Newton. After National built the 435,000-square-foot complex for Genuity Inc., the technology firm went out of business, prompting National to buy the buildings back last year for $20 million, lease them to Raytheon Inc. a few months later and then put them back up for sale. Banker & Tradesman reported last week that Morgan Stanley is buying the properties on behalf of a German client, with sources now claiming that the complex will trade for more than $80 million, exceeding previous estimates that put the trade in low $70 million range.
“That’s just a fantastic price,” marveled one source, who pegged the sale at $81 million. C&W also declined comment on that matter.
Investment broker Gary Lemire of CB Richard Ellis/Whittier Partners said he believes the favorable outcomes of those selling high-credit assets will spur other owners to test the waters as the sales season kicks into high gear. “People are looking at interest rates and saying, ‘I better get my property on the market now,'” said Lemire. “They are beginning to realize that there’s really never been a better time [to sell].”
The sales campaign of 350 Washington St. will help gauge the interest for retail properties, with that sector having remained among the more attractive product types for investors through the real estate market downturn. The Hub deal will be somewhat different from a slew of other sales, however, given that grocery-anchored retail properties have been the most popular of late. A location in the heart of Boston’s retailing center should generate interest for 350 Washington St., some said. “A lot of traffic goes through there,” said Boston retail broker Joseph Levanto of Schaffer & Assoc.
