BPG Ltd. is divesting four commercial real estate assets in suburban Boston, including the former 3Com property now known as The Campus at Marlborough.
Just because BPG Ltd. is divesting four commercial real estate assets in suburban Boston, including the former 3Com corporate campus in Marlborough that is being sold for a price approaching $135 million, the Pennsylvania-based investor is not abandoning Massachusetts, insists Vice President Albert J. Corr.
“We are actively and aggressively pursuing new [investment] opportunities in Greater Boston,” Corr told Banker & Tradesman last week. “We still like this market a lot.”
The latest dispositions are more a chance circumstance than anything else, Corr explained, with the four properties having been purchased and stabilized by his company just in time to take advantage of a white-hot investment climate. Besides the 125-acre Marlborough complex – now known as The Campus at Marlborough – BPG is selling the Ferncroft Corporate Center in Middleton, 181 and 187 Ballardvale St. in Wilmington and 690 Canton St. in Westwood.
“We are very much an opportunistic group, and when we can take advantage of a situation on the leasing or sales side, we want to execute that,” Corr said. “We feel we owe it to our investors to maximize the returns whenever we can.”
At this point, that mission has seemingly been accomplished. Although the outcome of the Westwood deal remains unclear, it appears BPG Ltd. will be reaping substantial gains for its financial backers through the other three transactions. The 3Com sale to Eaton Vance Corp. is especially impressive given that BPG acquired the 531,000-square-foot property less than four years ago for a mere $58 million.
Ferncroft will trade in the $25 million range, sources said. The Wilmington buildings are also said to be under agreement at about $25 million to a partnership of Griffith Properties and AEW Capital Management. BPG paid $18.2 million for the Ballardvale Street buildings in 1998.
‘A Good Approach’
A crush of capital chasing commercial real estate deals has added to the fervor, and Corr reported a solid reaction among bidders for all of the BPG assets in play. A dozen suitors lined up to make a run at the Marlborough complex, said Corr, who indicated that was a healthy number given the pricing level required to compete for the asset. Cushman & Wakefield of Massachusetts is the broker for that deal, which Corr said should be completed later this summer.
Corr would not identify the buyer for the Marlborough property or confirm the pricing level, but sources identified Eaton Vance Corp. as the winning bidder. One source maintained that Eaton Vance has unveiled a strategy to expand its commercial real estate holdings, adding that the Marlborough property would “fit their game plan” via a substantial commitment to the complex. The park is considered a core-type investment after BPG brought the occupancy from 35 percent to 100 percent through a six-figure lease with Cytyk Corp. and a long-term renewal with 3Com, the technology firm that built the property in the late 1990s.
BPG performed similar magic at the Ferncroft Corporate Center, a 225,000-square-foot building developed by Verizon Corp. for its own use. The telecommunications company remains a tenant in the property after selling to BPG in November 2004 for $18.9 million, while the park was further enhanced following a lease to a subsidiary of SAS Software. BPG brought occupancy at the property from 57 percent to 82 percent during its tenure. Corr declined to discuss pricing, but acknowledged that a Texas-based investor, Behringer Harvard, has contracted to buy the asset. The sale is being brokered by Trammell Crow Co.
BPG employed Meredith & Grew to market 181 and 187 Ballardvale St., which together total 185,000 square feet, but the sale is also being handled by David J. Pergola, who recently migrated from Meredith & Grew to Cushman & Wakefield. Griffith Properties principal J. Brad Griffith declined comment on that deal, while AEW Capital officials did not respond to inquiries by Banker & Tradesman’s press deadline. Nonetheless, sources pegged Griffith and AEW as the buyers for the buildings, which are located across the street from 200 Ballardvale St., another office property that Griffith acquired last year in partnership with the Praedium Group of New York.
In a somewhat related move, AEW will reportedly replace Praedium as Griffith’s partner at 200 Ballardvale St. as well. The purchase from BPG will provide the two investment entities a “critical mass” of space in the Wilmington market, noted one source. “It’s a good approach,” said the broker, particularly with the Wilmington office market improving in recent months and new infrastructure such as a new access ramp to Interstate 93 further enhancing the surrounding area.
Corr could not provide a timetable for the sale of 690 Canton St., a 205,000-square-foot office property being marketed by CBRE/New England. Considered one of the best office addresses in the south suburban Boston region, 690 Canton St. is also expected to draw a solid crowd of investors, although Corr would not make any predictions as to the pricing range. As the local holdings dwindle, however, Corr vowed that “we’ll be looking to build it back up again.”
“We want to be active buyers,” he said.
