Brighton-based Intercontinental Real Estate Corp. is buying 117 Kendrick St. in Needham, which was once occupied by Polaroid Corp.
Intercontinental Real Estate Corp. has a new find, but is also keeping the old. The Brighton-based commercial real estate firm is buying 117 Kendrick St. in Needham, a 211,000-square-foot property once occupied by Polaroid Corp. The asset is located on a 12-acre parcel in one of the suburb’s more bustling office submarkets. Meanwhile, Intercontinental has reversed course and pulled its One Washington Mall office tower in downtown Boston from the sales block after a deal with a local buyer fell apart in recent weeks.
Intercontinental will pay $37.5 million for 117 Kendrick St., or just under $180 per square foot. “It’s a really nice building,” Intercontinental Chairman Peter Palandjian told Banker & Tradesman last week in a report appearing on Banker & Tradesman’s Web site, bankerandtradesman.com. The property had been gut renovated in 2001 “to the steel,” Palandjian said, offering a state-of-the-art facility sporting a solid tenant roster. Brokered by Cushman & Wakefield of Massachusetts, the sale is slated to close this week.
Palandjian also confirmed industry rumors that Intercontinental has opted to keep One Washington Mall in the portfolio after trying to peddle the 17-story, 155,000-square-foot tower, which is located in the Financial District just steps from Boston City Hall. Intercontinental had retained Spaulding & Slye Colliers to sell the building, initially seeking a reported $42 million for the asset, the same price paid for it in late 2001 by a closed-end, commingled real estate fund assembled by Intercontinental.
Several bidders did pursue One Washington Mall, according to sources, but apparently not at a price deemed acceptable by Intercontinental, with one source tracking the negotiations maintaining that the highest bid was in the $35 million to $37 million range. In a story in last month’s Banker & Tradesman, sources claimed that a local group led by real estate investor Martin Hoffman and several relatives had agreed to buy One Washington Mall, but ultimately were unable to reach a conclusion. Martin Hoffman declined comment, while Palandjian would only confirm that Intercontinental has stopped marketing the tower.
‘The Right Direction’
“There’s really no story – we’re just not selling,” Palandjian said. The company has harvested many of its local properties, including the nearby One Court St., which sold earlier this year to a hotel firm for nearly $15 million. Last year, Intercontinental traded the residential portion of its 226 Causeway St. mixed-use renovation in North Station for more than $40 million.
The 117 Kendrick St. property has undergone its ups and downs since being renovated by WP Commercial Co. – now Archon LP – including the loss of a key technology tenant following the collapse of the Internet bubble in late 2001. Since that time, however, there has been substantial leasing, with one source estimating that there is just under 15,000 square feet available in 117 Kendrick St. at present.
Garry Holmes, president of R.W. Holmes of Natick, said 117 Kendrick St. has performed well in recent years, as has the Needham market in general, although nearly 100,000 square feet of space is about to open up at 160 Gould St. from the pending departure of Pearson Education into Boston’s Back Bay. Holmes estimated the vacancy rate in the area at about 15 percent, adding the opening quarter of 2005 was encouraging. “It’s heading in the right direction,” he said.
