A deal involving the sale of One Washington Mall, a 17-story, 155,000-square-foot office building in Boston’s Financial District, has reportedly fallen apart.
Boston’s One Washington Mall is on the trading block again.
After weeks of negotiations with a local suitor, Intercontinental Real Estate Corp. has reportedly ended talks to sell the 17-story, 155,000-square-foot office building to that entity. According to sources, the Financial District tower had been under agreement to an investment group led by Martin B. Hoffman which itself recently sold a pair of waterfront office buildings in the Hub’s North Station district for just over $25 million.
“That did die,” an industry source told Banker & Tradesman last week of the One Washington Mall deal. Hoffman declined to discuss the matter when contacted on Friday. “Talk to the sellers,” was all Hoffman would offer when pressed on the matter. Equally mum were officials at Spaulding & Slye Colliers, retained last year to market the asset for Intercontinental. Calls to both firms were not returned by press deadline. It is unclear what the exact asking price was for One Washington Mall, which Intercontinental purchased in late 2001 for $42 million, although some estimates place the figure in the $35 million range.
According to one source, the bidders sought to drop their price in the final stages of negotiations, ultimately leading Intercontinental to quash the deal. The source, who requested anonymity, maintained there were no deposits lost as a result of the situation, and predicted that Intercontinental will attract other interested parties on the rebound. “It’s a ground-zero location” at the heart of Boston, noted the broker, who also claimed there is substantial vacancy in the 33-year-old structure.
Spaulding & Slye’s investment sales team reported solid interest in One Washington Mall when it initially went on the market. Among the firms that supposedly competed aggressively for the asset before it was offered to Hoffman’s group was Griffith Properties LLC. That firm, led by Massachusetts real estate icon J. Brad Griffith, has been actively pursuing opportunities in the area in recent months, making recent acquisitions in Franklin and Wilmington.
The apparent collapse of the One Washington Mall deal represents a rare miss as the 2005 investment sales market nears the end of the first quarter. Already threatening to outdo last year’s record pace, when upwards of $5 billion worth of commercial properties were sold in Greater Boston, several prominent assets have changed hands during the past two-plus months. Among the most notable closings have been the Bay Colony Corporate Center in Waltham, the Riverfront Office Park in Cambridge and the Assembly Square Mall and several surrounding parcels in Somerville, acquired earlier this month for $66 million by a Maryland-based real estate investment trust. Including those three transactions, Cushman & Wakefield of Massachusetts has already brokered $500 million worth of properties in 2005, and exhibits no sign of slowing up over the near term.
“It has been incredibly active,” said Cushman & Wakefield of Massachusetts President Robert E. Griffin Jr., whose firm traded $2.2 billion of properties in 2004. “There is money available for everything.”
Spaulding & Slye also has been on a roll of late, having just completed brokering the sale of two Cambridge office buildings for $120 million and a Financial District property for $15.2 million to ELV Assoc..
Slow Going
Prior to the One Washington Mall negotiations, Hoffman and his Chardon Realty Trust had been involved in one of the Boston’s longer real estate sales efforts, with the firm taking nearly three years to dispose of 131 Beverly St. and 160 North Washington St. The firm had owned the North Station properties for decades before opting to take advantage of the recent surge of capital for commercial real estate. After one deal with Nordic Properties fell through after nearly two years of discussions, Chardon last September sold the adjoining buildings to a group led by Ajax Investment Partners of New York. Joining Martin B. Hoffman as trustees in Chardon Realty Trust were Matthew B. Hoffman and Bruce E. Cohen.
The North Station sale involved more than 375,000 square feet of space and a 40,000-square-foot wharf located at the mouth of the Charles River. The new owners unveiled a plan in late 2004 to convert the property to a mix of residential and retail uses, and to create a waterfront park that would be accessible to the public. Along with 260 residential units and 40,000 square feet of retail space, North Washington LLC is calling for a 348-vehicle garage, fitness center and a 400-seat restaurant as part of the project.
The proposal at the proposed Lovejoy Wharf does face an intense round of approvals from city and state officials, particularly given the parcel’s prominence on Boston Harbor and at the new gateway to downtown Boston from the north. Straddled between the Charlestown Bridge and the new Leonard P. Zakim Bunker Hill Bridge, the Lovejoy Wharf site can be seen prominently by drivers entering the new Interstate 93 tunnel. Ironically, Intercontinental developed 226 Causeway St., an office/residential building located directly alongside the Lovejoy Wharf properties.
