In the year’s biggest commercial sale, Credit Suisse has purchased Boston’s Independence Wharf for $106 million, according to a deed filed yesterday.
The 14-story, 337,000-square-foot Class A office building at 470 Atlantic Ave. achieved a price of $315 per square foot. That mark is below the $350 per foot that its seller, GE Asset Management, was reportedly seeking. According to paperwork filed with the secretary of state, the buyer named on the deed, CSREFI Independence Wharf, is an LLC controlled by Credit Suisse.
Even so, GE Asset Management, the management firm that handles General Electric’s pension fund, managed to extract a price that, in absolute and per-foot terms, is far above anything else the open market has been able to generate in several months. In July, One Winthrop Square traded for $185 per foot. A building Independence Wharf is often compared to, 745 Atlantic Ave., reportedly only attracted bids in the $180-$190 per square foot range when it hit the market.
2009’s biggest sale had been one that closed back in January, when National Development and Charles River Realty Investors scooped up 10 Brookline Place in Brookline for $62 million, or $399 per square foot.
When GE purchased the former warehouse building from Modern Continental in 2002, it paid $82.2 million, or $244 per square foot. GE has slowly shored up Independence Wharf’s tenancy, bringing it to an occupancy rate of 89 percent. The neighborhood surrounding the building has improved greatly with the completion of the Rose Kennedy Greenway and the InterContinental Hotel. Boston Properties’ sizable Russia Wharf tower is rising down the block.
GE’s asking price raised eyebrows, as lease comparables suggested Independence Wharf’s income streams could be in for a tumble. Class A rents in Boston’s Financial District have plummeted by 23 percent over the past year, according to data from Jones Lang LaSalle. Published asking rates in Independence Wharf are seeking between $55-$58 per square foot for seventh-floor space that has low ceilings and tight column spacing by Class A standards. By comparison, the law firm Fish & Richardson is reportedly paying well under that price for space atop Joe Fallon’s new Fan Pier building.
Multiple real estate sources said a realistically underwritten deal for Independence Wharf would likely put rents in the low $40s.
Credit Suisse has yet to take out a mortgage to finance the acquisition, registry of deeds records show.
