Spaulding & Slye recorded another successful year in investment sales. Among the well-known Boston assets it brokered was One Faneuil Hall Square, the prominent 6-story building designed at Quincy Market by architect Graham Gund.
It sounds like a broken record, but 2005 will be another record breaker for Greater Boston commercial real estate sales.
“In all product types, this was a very busy year,” confirmed Cushman & Wakefield of Massachusetts principal Marci Griffith Loeber, a member of the firm’s Capital Markets Group, while principal Gary J. Lemire said retail and multifamily transactions “led the charge” at CBRE/New England’s investment sales shop even as the Hub’s office sector rose an astounding 43 percent in sales from a super-charged 2004. CBRE/New England will trade about $1.5 billion this year in property sales overall, estimated Lemire, having reached $1.3 billion at the end of the third quarter
Given the unprecedented pace of the previous campaign, coupled with the prospect of rising interest rates and other factors, many analysts anticipated the investment climate would cool in 2005, but conditions actually quickened as the year progressed. Owners initially reluctant to sell were lured off the sidelines by the crush of capital pursuing that investment class. Yield-hungry institutional money, private opportunity funds and tax-induced buyers vying to close in a restricted time period drove pricing into the stratosphere and recorded new lows for capitalization rates, especially on stabilized real estate. And while questions have begun to emerge about the long-term health of the condominium market, converters were among the most aggressive of a diverse crowd chasing apartment buildings and even residential development sites.
“We knew it was going to be active, but we didn’t think it would be as active as it was,” said Loeber, whose company is on track to exceed $2 billion in sales regionally for the second straight year, a remarkable feat and likely again to lead the pack in local brokerage houses. Joined by principal Robert E. Griffin Jr. and Edward C. Maher Jr., the trio oversaw a team which brokered such high-level sales as the Bay Colony Corporate Center in Waltham, a $272 million blockbuster to begin the year, and included the $275 million sale of 99 High St. in Boston and the pending sale of Ten/10 Post Office Square in Boston for close to $110 million.
By some estimates, commercial real estate sales in the region could approach $6 billion in 2005, paced by explosive velocity in the office market, which CBRE/New England principal Gary J. Lemire recently projected will reach $4.2 billion alone. “Office has really ratcheted back up in the minds of the investors,” said Lemire, who reported that the average for office sales in metropolitan Boston during the past five years has been about $2.7 billion. “It has been huge,” he said of this year’s investment appetite for office assets.
CBRE/New England was involved in several such sales in 2005, including the $121 million purchase of Boston’s 101 Arch St. by ING Clarion and 185 Devonshire St., an 11-story Financial District property taken control of by a Miami firm through buying the building’s loan. After completing that deal this autumn, CBRE/New England Senior Vice President Elizabeth Carrillo Thomas also brokered the sale of 101 Walnut St. in Watertown to Paradigm Properties for $20 million.
CBRE/New England’s multifamily team of Simon J. Butler and Biria St. John were busy throughout the year, this month brokering the $66 million sale of a Cambridge apartment complex. Perhaps the most notable transaction handled by the group occurred in October when Atlanta-based Radco acquired Longwood Towers in Brookline, a landmark, three-building apartment complex targeted for conversion to condominiums. The 268-unit property was acquired for $110 million amid a bitter confrontation between tenants and then-owner Teachers Insurance & Annuity Association regarding a messy renovation program, a controversy that Radco vowed to resolve upon its acquisition of the upscale property.
Another Solid Year
Cushman & Wakefield remained busy on the multifamily front, one of the group’s specialties that this year produced such deals as the Village at Quarry Hills in Quincy, a 326-unit apartment complex under construction that was purchased by Archstone-Smith for an impressive $110 million. Equity Residential purchased Longview Place in Waltham in another Cushman & Wakefield-brokered sale. Apartment Realty Advisors also had an active 2005, headlined by the sale of more than 500 Boston apartments in several buildings, including the city’s landmark Parkside Apartments in the Fenway district.
While not a big player in the multifamily market, Spaulding & Slye recorded another solid year in sales, trading such well-known Boston assets as Two Liberty Square, 18 Tremont St. and One Faneuil Hall Square, the prominent 6-story building designed at Quincy Market by architect Graham Gund. It was purchased by a New York investor for $23 million, a deal brokered by Spaulding & Slye principals Michael G. Smith, Catherine Daume and Scott Jamieson.
Trammell Crow Co. had its own share of victories in 2005, with team members James McCaffrey, Peter Joseph and Chris Phaneuf orchestrating the sale of Two Technology Drive in Westborough, the Highwood Office Park in Tewksbury and the North Andover Mills West office park in suburban Boston, acquired by an Indiana investor for $58 million. Trammell was also the broker in the sale of 31 Milk St. in Boston to Everest Partners, an $18 million transaction. The sale of 25 Mall Road in Burlington for $55 million was among several prominent sales completed by Meredith & Grew’s investment team in 2005.
Among the leading retail deals in 2005 was the purchase of the Assembly Square Mall from Taurus Investments for $64 million. That deal was brokered by Geoff Millerd and other members of the investment team at Cushman & Wakefield, while former colleague James M. Koury at Spaulding & Slye brokered more than a dozen transactions this year, among them Lincoln Plaza in Worcester to Inland Real Estate Acquisitions. The 434,000-square-foot complex is located on a 45-acre site near the intersections of Interstate 190 and 290, and sold for $52 million.
