The past year has been marked by a red-hot investment sales market for office buildings in the Greater Boston area. With a glut of new development projects in the downtown and suburbs, and foreign and institutional investors bidding up prices on the few properties that have been for sale, prices per square foot have been driven through the roof. Let’s take a closer look at some of the year’s major deals.
1. Riverside Center, Newton – Houston’s Hines Global REIT Inc. bought the 510,000-square-foot Riverside Center in Newton from Equity Office for $197.88 million, or $388 per square foot, the highest per square foot price on record in the suburbs, according to industry executives.
The office complex is located at 275 Grove St. in Newton. When it sold, the property was 97 percent leased on a long-term basis to tenants including e-publishing company Tech Target and pharmaceutical giant McKesson. The deal was Hines Global REIT’s third acquisition in the Boston area. In 2011, the firm acquired 250 Royall in Canton and the Campus at Marlborough in Marlborough. Designed by Elkus Manfredi Architects and completed in 2000, Riverside Center comprises three separate four-story buildings connected by a pair of full-height, glass-enclosed atria. The complex includes parking for 1,500 cars in an adjacent garage.
2. 45 Milk St., Boston – This deal is notable because at the time the deal was struck, the property was nearly vacant, yet it still traded for $315 a square foot. It was purchased by Deutsche Asset & Wealth Management, formerly RREEF Real Estate. The 70,000-square-foot Downtown Boston building from the failed Anglo Irish Bank portfolio of commercial real estate sold for more than $21 million. Anglo Irish paid nearly $34 million for the asset in 2007, just before the financial markets came crashing down. The property was acquired by Anglo Irish’s private banking arm for $33.9 million, nearly $490 per square foot, in 2007, just before the financial services walls came crumbling down in the Great Recession. The office building, known as the International Trust Co. Building, was built in 1893. The property is listed on the National Register of Historic Places and given landmark status by the Boston Landmarks Commission. That means the commission must review and approve any changes to the exterior.
3. Wellesley Office Park, Wellesley – This deal represented the largest suburban trade in dollars of 2013. John Hancock purchased the 649,184-square-foot office park in Wellesley from Equity Office Properties for $237 million. The park, located at the intersection of Route 128 and Route 9, was 90 percent leased to tenants including AXA Equitable Life Insurance and Newton-Wellesley Hospital at the time of the sale.
4. 40 Broad St., Boston – There was fierce competition for the 11-story office building, which a branch of Chicago’s Pearlmark Real Estate Partners sold to TIAA-CREF for about $110 million. The property traded for about $385 per square foot. Pearlmark made significant capital improvements to the 290,000-square-foot property, but also paid just about $50 million for the building in 2006. It is managed by Lincoln Property Co. The property is now home to a new eatery called Warehouse Bar & Grille.
5. 51 Sleeper St., Boston – This Seaport office building was recently sold to TIAA-CREF from DivcoWest for $60.2 million. The eight-story, 150,363-square-foot office building is located alongside the Fort Point Channel, provi ding water views for tenants. It is 100 percent leased to tenants including government entities, architects and technology firms. DivcoWest purchased the property, which was constructed in 1929 and renovated in 2004, last November.