Spaulding & Slye Colliers now has three more Boston properties to peddle, including this one at 585 Commercial St. in the North End.
This week features the longest day of the year in New England, and perhaps no one can use the extra time more than Boston’s harried commercial real estate sales professionals.
Coming off a record 2004, investment deals have remained on a blistering pace with the midyear approaching, as exemplified by a slew of Hub properties now hitting the sales block. The fresh crop includes the home of the Institute of Contemporary Art on Boylston Street, a 19th century office building also in the city’s Back Bay neighborhood and a 41,000-square-foot North End building overlooking Boston Harbor. All three properties are being marketed by Spaulding & Slye Colliers, which has already traded several prominent downtown buildings to date this year.
“We’re moving right along,” said Spaulding & Slye Colliers principal Michael G. Smith, whose firm is also peddling 40 Broad St. in the Financial District on behalf of Prudential Real Estate Investors, and has One Faneuil Hall Square under agreement to a New York real estate group for a price estimated at close to $23 million.
Although the Back Bay office building at 29 Commonwealth Ave. is 97 percent leased, industry observers predicted that the latest trio of Boston assets being shopped by Spaulding & Slye will all be eyed for residential conversions. Fueled by low interest rates and a growing preference for urban living by wealthy baby boomers, commercial properties throughout the city are being targeted as conversion plays, providing a surge of investor interest for even older office buildings such as 29 Commonwealth Ave. By one estimate from Meredith & Grew Oncor, more than 1 million square feet of Class B office space is being converted to residential uses in the city at present.
Smith would not offer any strategies for promoting 29 Commonwealth Ave. to investors, but insisted that it consistently performs well as an office destination. “It’s a great building in a terrific location,” said Smith. Owned by Capital Properties, the 37,000-square-foot structure certainly has a lengthy track record. According to Smith, 29 Commonwealth Ave. actually inspired the first zoning regulations in Boston after the developer took advantage of a then-novel invention known as the elevator to add unprecedented height to the Back Bay. The close proximity to the Back Bay’s residential neighborhood should enhance any changeover from office space, some observers opined.
A ‘Nice Assignment’
As with the other two properties, Smith is marketing 29 Commonwealth Ave. along with colleagues Cappy F. Daume and Scott J. Jamieson. Spaulding & Slye Financial Analyst Michael L. Barowsky is participating in the sale of the ICA building at 955 Boylston St., while Financial Analyst Stephen J. Baldini is assisting in selling the North End building at 585 Commercial St. Smith referred questions regarding the ICA property to Daume, who was unavailable for comment by Banker & Tradesman’s press deadline. There is no asking price for any of the three buildings just put up for sale.
Sited directly across from the Hynes Convention Center, 955 Boylston St. includes a restaurant, Dillon’s, and encompasses nearly 22,000 square feet overall. Although the parcel is barely a quarter-acre, a redevelopment opportunity could add 120 feet in as-of-right height and as-of-right square footage of more than 95,000 square feet. Among the permitted uses supposedly allowed at 955 Boylston St. would be residential, hotel, office and retail, with academic uses such as dormitories seen as a conditional possibility.
After ownership for 30 years, the ICA is selling 955 Boylston St. as it prepares to move to a new home in the city’s Seaport District next year. The Back Bay has experienced a number of significant building transactions in recent months, including last autumn’s disposition of 745 Boylston St. to Upland Capital Corp., a $32 million sale also brokered by Spaulding & Slye. In another office/retail deal said to be nearing completion, Connecticut-based Abbey Road Advisors is reportedly acquiring 399 Boylston St. from Centremark Properties for approximately $60 million. Trammell Crow Co. is negotiating that transaction.
Across town in the North End, a private partnership has retained Spaulding & Slye to sell 585 Commercial St., a 41,000-square-foot office/retail building that could be totally vacant by next year, opening the possibility for a conversion plan there as well. Offering unobstructed views of Boston Harbor and access to recreational and neighborhood amenities in the North End, 585 Commercial St. will “no doubt” draw interest from residential developers, maintained one Boston real estate broker familiar with the property.
“That’s a really nice assignment,” the broker said of 585 Commercial St., which was acquired in 1998 for $4.6 million by several principals of Prince, Lobel, Glovsky & Tye, a law firm based in the building. The 3-story building is also known locally as the home of Roche Bobois, a high-end furniture company. Although the waterfront site could increase the complexities of permitting for any buyer, Boston’s North End has yielded a number of high-end condominium projects along Commercial Street in recent years, helping solidify its reputation as a popular residential destination. A few blocks away on the other side of the Charlestown Bridge, for example, J.S. Karlton Co. recently sold out dozens of condominiums grafted atop a one-time warehouse, with many of the units fetching seven figures.
