Atlantic Wharf. Banker & Tradesman file photo
BXP sold a Boston waterfront residential building for $55.5 million as part of its strategy to focus on downtown office and life science properties in the region.
The 86-unit Lofts at Atlantic Wharf were acquired by AEW Capital Management on Feb. 26, according to a Suffolk County deed. BXP previously sold its Proto apartment tower at 88 Ames St. in Cambridge for $171.5 million on Dec. 24.
The transactions are part of the nation’s largest publicly traded office REIT’s ongoing strategy to divest non-core assets totaling $1.9 billion, including some suburban office parks and residential properties.
BXP executives touted the strong office occupancy rate in the Boston urban core, saying it positions the company to reap future rent increases.
“It’s clear that rental rates are directly linked to occupancy, and that’s why we’re feeling it in the Back Bay of Boston and in midtown New York, where the occupancy is tightened and rents are accelerating,” CFO Michael LaBelle told analysts during a conference call last week. “So clearly, as we get the portfolio better leased, there’s going to be less space for us to lease and we can be more choosy and charge more for those spaces.”
Boston’s Back Bay, midtown Manhattan and Reston, Virginia represent the three strongest submarkets in the BXP portfolio, President Doug Linde said.
Investor materials recently released by BXP show a strong rebound in occupancy at its office buildings in the Boston and Cambridge urban core, and elevated vacancy in the suburbs.
BXP’s Boston urban portfolio contributes 33.7 percent of the company’s net operating income, the largest share of any U.S. submarket, according to its fourth-quarter financial report. The suburban Boston portfolio chips in over 5 percent.
The downtown Boston and Back Bay office portfolio is over 98 percent leased, with 200 Clarendon St. nearing full occupancy with tenants including Bain Capital, Arrowstreet and Ernst & Young. The Prudential Center office tower is nearly 98 percent leased, with law firm Ropes & Gray occupying over a third of the 1.3 million square-foot building.
Current rent per square foot averages $89.66 at 200 Clarendon and $74.02 at the Prudential Center offices, according to BXP’s fourth-quarter report.
The 793,000 square-foot office tower at Atlantic Wharf is nearly 97 percent leased, with Wellington Management, Columbia Management and AFM Insurance occupying a collective 82 percent of the building, according to a BXP investor presentation.
The urban edge portfolio, comprising 26 buildings and nearly 4.5 million square feet, is 71.6 percent occupied.
BXP is planning to redevelop suburban office parks in Weston and Waltham into multifamily housing, after breaking ground on its first project in that category last year in Lexington. BXP lists a multi-phase project totaling 954 units at its Bay Colony office park in Waltham.
