The property at 13-15 Winter St. is part of a 325,000-square-foot commercial real estate portfolio recently taken off the sales market by the A.P. Levin Co.
After a lengthy effort to sell its portfolio of office and retail properties in downtown Boston, the A.P. Levin Co. has pulled the 325,000-square-foot package off the block, a principal of the family-owned real estate company confirmed last week.
“The portfolio is still in the hands of the Levin family,” acknowledged Daniel Levin, whose clan also operates the well-known Dream Machine arcade chain. The aging but well-located package is situated primarily in the city’s emerging Downtown Crossing shopping district, with some of the holdings owned by the family for close to a century.
The decision to pull the offering comes at a time when Boston’s investment climate is slowing down for the first time in nearly five years, with last summer’s record run of deal-making apparently proving to be the peak of the extended boom market. Levin, however, insisted the cooling sales climate was not a factor in the family’s retreat. “It isn’t a reflection of the market or us not receiving any reasonable offers,” said Levin, who praised the marketing effort by Trammell Crow Co.’s Middle Markets Group, which was initially retained last year to peddle the deal.
Many of the properties are located in two critical blocks sandwiched between Tremont and Lower Washington streets. Among the buildings in that swath are 10-12 West St.; 13-15 and 43-45 Winter St.; and 21-23, 25-27, 29-35 and 37-43 Temple Place. The largest of the structures is the 99 Chauncy St. office building, estimated to be in the 105,000-square-foot range.
Given that the portfolio was being marketed last summer, when Boston was attracting plentiful capital from both domestic and foreign players, some observers said they were surprised the buildings did not trade during the initial go-round. Levin would not discuss specifics for pulling the properties off the market, except to say that it was “an internal family decision.”
Some sources said they believe there was a difference of opinion among family members in how the properties should be sold, or how the proceeds should be divvied up, but Levin would only say there were tax issues and other factors which needed to be taken into consideration.
Richard Herlihy of Trammell Crow’s Middle Market Group declined to discuss the internal issues being discussed, but said there was “an excellent response” to the marketing program, with numerous offers for both individual buildings and the entire package, as well. If the family opts to reopen the effort, Herlihy said he believes many of the initial bidders would again be interested in pursuing the opportunity.
“I think the package is unbelievable,” said Herlihy, maintaining that the pace of change in Downtown Crossing is already ahead of the city’s other hot development area, the burgeoning Seaport District. The district has already benefited from the renovation of the failed Lafayette Place Mall into an office/retail building, while construction of the $400 million Millennium Place mixed-use complex is rapidly approaching its completion. Just last month, the Intercontinental Cos. of Brighton began work on a luxury hotel at 90 Tremont St., just a few doors down from the bulk of the Levin holdings.
Levin said he is confident the package will continue to garner interest, agreeing that the recent slew of new construction is already having an impact. Levin said that retail rents for properties in his area are up to between $60 and $70 per square foot, well above the $30 to $40 per square foot such buildings were fetching “before Millennium put a pick in the ground.”
“There has been a huge change down here,” said Levin, providing comfort that investment interest will remain strong for the foreseeable future. The arrival of Emerson College and Suffolk University has been another improvement, he said, noting that the city is also taking steps to develop its Hayward Place parcel just across from West Street and Temple Place. Work also recently began on One Lincoln St., a 1 million-square-foot office tower that will bring thousands of workers into the Downtown Crossing area when it opens in 2003.
Herlihy would not speculate on what the motivations of potential buyers might be, but sources said it is likely anyone acquiring the entire portfolio would look to sell certain portions due to the diversity of the assets, both geographically and in terms of size and condition. There is also a good chance, according to observers, that an investor might look to enhance their holdings via redevelopment of certain buildings or by pursuing additions and expansions of those properties.
“It is prime real estate and it gets [more valuable] every day,” said one source. “People are very bullish on what’s happening all around there.”
Now known as the Lafayette Corporate Center, the former Lafayette Place Mall has already seen a boost from the new projects, recently landing Eddie Bauer to the 80,000-square-foot retail portion and reportedly about to land several new tenants for the remaining space.
