A.P. Levin Real Estate is divesting much of its family-owned portfolio but is keeping three properties in Boston, including 99 Chauncy St.
First they were going to sell, then they decided to hold. Now, the principals of A.P. Levin Real Estate are doing a little bit of both with its family-owned portfolio of downtown Boston office and retail buildings.
Having maintained an ownership presence in the Hub’s Downtown Crossing district since the 1930s, the founders of the Dream Machine Corp. arcade company are in the process of divesting their remaining holdings on Temple Place, but will retain three assets in the area, including the firm’s flagship 99 Chauncy St., an 11-story, 100,000-square-foot office building.
Once totaling 350,000 square feet, the Levin portfolio was initially placed on the market in 2000 when Trammell Crow Co. was hired to peddle the package. A year later, A.P. Levin opted to pull the offering for reasons that the company never fully explained, although the market for commercial real estate investment sales was briefly cooling when the owners made that decision. Since then, A.P. Levin has sold a few of the buildings in the portfolio individually, some of which have been converted into condominiums such as 43 Winter St. The firm also has traded 543-547 Washington St. and 10-12 West St. in the intervening years.
Company principal Daniel Levin acknowledged the firm’s plans to sell its two remaining assets on Temple Place, those being 21-35 Temple Place and 37-45 Temple Place. “It makes sense for the shareholders and the timing seems right,” said Levin. “There’s a lot of interest [for commercial properties] out there right now.” As with the previous properties traded, conversion to residential is considered a leading possibility for the Temple Street buildings, given smallish floor plates that industry observers say can accommodate such a use and the continued desire for living in downtown Boston. Seven upscale condominiums were developed at 43 Winter St., for example.
Along with 99 Chauncy St., A.P. Levin will keep 13-15 Winter St. and 91-95 Summer St., Levin told Banker & Tradesman. The Winter Street asset is a 4-story, 16,000-square-foot structure offering street-level retail, while the Summer Street asset features more than 25,000 square feet on 5 stories, encompassing an eclectic mix of office space, six artist live/work lofts and a retail component on the first floor that is currently leased to Radio Shack.
As part of its strategy moving forward, A.P. Levin has hired Schaffer & Assoc. of Boston to provide retail leasing services for the three buildings, and is keeping Meredith & Grew to broker deals for the office component. Calls to Meredith & Grew to discuss the properties were not returned by press deadline, but Levin said Meredith & Grew Vice President Michael S. Edward and Senior Vice President Leigh L. Freudenheim are heading up the assignment. Meredith & Grew had been doing both office and retail leasing of the family’s portfolio since 2002, with Levin praising the firm’s performance during its stewardship.
Schaffer & Assoc. principal Joseph Levanto, one of the leading retail brokers in the Downtown Crossing district, said his firm is eager to represent Levin in the trio of properties. “They are a great [owner],” Levanto said of A.P. Levin, adding that he believes there will be takers for the retail opportunities in the buildings, although he could not say just how much square footage is in the mix or whether any of the occupied space will become available over the near term.
Dramatic Changes
Downtown Crossing area has undergone dramatic changes in recent years. After a period of decay in the 1990s accentuated by the closing of the Lafayette Place Mall due to poor layout and other difficulties, developers have pumped new life into the area during the past decade through such projects as a new mixed-use complex featuring luxury high-rise condominiums, a Ritz-Carlton Hotel and a substantial block of upscale retail. The failed mall was converted into a combination of office space and ground-level retail along Washington Street, while a new office building at One Lincoln St. located adjacent to what is now the Lafayette Corporate Center also has benefited the district.
The fortunes of retailers in Downtown Crossing and the so-called Ladder District that includes Temple Place also have been up and down during the past decade. Various successes such as the conversion of the former F.W. Woolworth’s Department Store into a multi-tenanted complex anchored by trendy clothier H&M and a new 14,000-square-foot CVS Pharmacy at 55 Summer St. have been offset by the shuttering of other operations, most notably the pending closing of a Barnes & Noble bookstore on Washington Street that is expected to leave a block of nearly 50,000 square feet on several levels.
Even with such woes and a number of empty storefronts currently in the Ladder District, Levanto characterized Downtown Crossing as being “healthy” and said it is still able to command rental rates above $100 per square foot for prime locations. Relying heavily on the crush of workers from both Downtown Crossing and the abutting Financial District, Levanto said the shopping Mecca should benefit by the continued rebound of Boston’s office market, which has seen its vacancy rates plunge in recent months after the sector had been in the doldrums for nearly three years as a result of the regional recession.
Levin declined to say whether a broker has been hired to sell its Temple Place properties or identify how far along that process is, but the current appetite for Boston real estate would seem to play in the company’s favor. The capital market has shown no sign of slowing down after two straight record years as the second quarter of 2006 kicks into gear. Besides the Levin buildings, 55 Summer St. has been recently put on the block for sale by its owner, H.N. Gorin Inc., with Cushman & Wakefield of Massachusetts marketing that asset.
Cushman also just negotiated the $32 million sale of 10-24 School St. in Downtown Crossing. The mixed-use property is anchored by a Borders Books & Music Store, with that retail component considered a major reason for widespread investor interest garnered by the marketing campaign. According to Cushman & Wakefield principal Edward C. Maher Jr., more than 20 offers were received for the Borders property, which was ultimately acquired for an overseas buyer through Anglo-Irish Bank Corp.
