Cabot Properties, like its predecessor Cabot Industrial Trust, is headquartered at Center Plaza in Boston.
It is often said that, if at first you do not succeed, it is best to try and try again. Apparently, the same advice can also be applied when one does succeed.
After selling the 3-year-old Cabot Industrial Trust last fall for an impressive $2.1 billion, the core management of the Boston-based real estate investment trust has apparently regrouped with a new company. Led by industry veteran Ferdinand Colloredo-Mansfeld and his son, Franz Colloredo-Mansfeld, several CIT members have launched a firm known as Cabot Properties LLC. According to records on file at the Massachusetts Division of Corporations, the new entity is based at 2 Center Plaza in Boston, the same location in which CIT was headquartered before being consumed last year by CalWest Industrial Properties.
Repeated calls to officials at Cabot Properties last week were not returned by Banker & Tradesman’s press deadline, making it difficult to assess what the firm’s strategy will be going forward. Along with the Colloredo-Mansfelds, other transplants from the former real estate investment trust include CIT President Robert E. Patterson and Eugene Riley.
Some observers familiar with the principals said they believe Cabot Properties will employ essentially the same investment style as that used to grow CIT, which was founded in January 1998 with an idea of concentrating on the industrial real estate market. Given the results of CIT’s brief existence, it would certainly appear to be a model worth emulating.
In announcing the sale to CalWest, Ferdinand Colloredo-Mansfeld noted in a press release that CIT had grown from 28 to 120 people, raising nearly $2 billion in capital to fund its operations. It had $1.8 billion in total assets at the time of the sale, including several properties the company had acquired during its stewardship, as well as another 16 new construction projects totaling $113 million. CalWest, a partnership between the RREEF Funds and the California Public Employees’ Retirement System, took control of a 41 million-square-foot portfolio, with CIT having assembled a fiefdom of warehouse, distribution and other industrial properties located in 19 core markets across the United States.
At this point, it is unclear exactly what the game plan will be for Cabot Properties. Most industry observers spoken with last week said they were unaware that the new company is even in operation. One Hub broker who has heard some reports about its formation said all indications are that the company is indeed looking to pick up almost exactly from where it left off, explaining that CalWest apparently did not require a non-compete clause for CIT’s management team.
“I think they are attempting to create a similar version of what [CIT] was,” said the broker, who requested anonymity. “They really aren’t even changing the name.”
While somewhat surprised at the low profile currently being taken by the management group, the source opined that Cabot officials are most likely waiting until their marketing and acquisition strategy is complete before making a formal announcement. Another source said the company is beginning to make itself known within the Hub real estate industry.
Proven Tactics
The desire to jump right back into commercial real estate after selling their REIT would appear to mirror the same tactic employed by the managers of Beacon Properties Corp., the REIT founded in the mid-1990s by the principals of the Hub’s venerable Beacon Cos. Beacon Properties sold out in 1997 to Equity Office Properties, but EOP founder Samuel Zell also took the unusual step of eschewing a non-compete requirement for such Beacon Properties officials as Alan Leventhal and Lionel Fortin.
Almost immediately after selling out to EOP, Leventhal, Fortin and a cadre of other Beacon alumni founded Beacon Capital Corp., a private real estate investment fund that aggressively began buying new assets in the Boston area. Almost overnight, Beacon Capital became a major player in the Bay State real estate scene, gobbling up significant properties in both Cambridge and South Boston. The firm then went on to dispose of most of its Cambridge holdings just before the market crashed in 2000, garnering substantial rewards for the owners and their investors.
The formation of Cabot Properties would also indicate that Ferdinand Colloredo-Mansfeld has no intention of riding into the sunset after successfully rebounding from the real estate crash of the late 1980s. Now 62, he was a major force in Boston during the 1980s, serving as a leader on the politically powerful Boston Coordinating Committee and helping establish Cabot, Cabot & Forbes as one of the region’s premier suburban real estate developers.
CC&F ran into trouble during the late 1980s when the region was hit with the worst real estate crash ever seen. Colloredo-Mansfeld, known informally as “Moose,” was ultimately pushed out by CC&F’s owner, Marshall Fields V, heir to the Chicago retail fortune. Colloredo-Mansfeld then turned to managing real estate on behalf of institutional clients before turning his attention to the industrial sector by founding CIT.
