Thanksgiving may be over, but the feeding frenzy is continuing for Greater Boston’s commercial real estate market.
Increasing jitters over the economy have done little to dampen investor interest in the Bay State, as evidenced by a pair of major land deals and the sale of several Boston office properties. Leading the pack is the $14 million purchase of 545 acres of raw land straddling Northborough and Marlborough by the Gutierrez Cos., while a similar multi-borough acquisition is supposedly underway in Southborough and Westborough, with EMC Corp. said to be buying as much as 280 acres from the Flatley Co.
As for existing properties, an overseas partnership has purchased 200 Portland St. in Boston’s improving North Station district at the same time that a Metropolitan Life Insurance Co. subsidiary, State Street Realty Advisors, has supposedly agreed to buy 211 Congress St. in the Financial District.
Gutierrez officials did not return phone calls to discuss their deal, but a spokeswoman for the sellers acknowledged the transaction. “We have sold the land,” said Jennie Morgan of MetLife Realty Investments, although she declined to discuss financial aspects of the sale.
Morgan added that Gutierrez will buy another 15 acres, while the towns of Northborough and Southborough reportedly have agreed to take MetLife’s remaining 150 acres in Northborough to build a new regional high school. Both of those deals should be consummated shortly, said Morgan, with a technical issue in land court currently holding up their completion.
Gutierrez has previously kept mum about its reasons for buying the MetLife land, a deal first reported by Banker & Tradesman in September. According to brokers familiar with the property, however, the most likely prospect will be for office space to meet the strong demand seen for that market in recent years. A residential piece may be sold off, said one of the brokers, adding that Gutierrez should be able to build at least 1 million square feet of commercial space on the remaining portion. The surrounding market currently has a low 2.3 percent vacancy rate, according to Spaulding & Slye Colliers.
MetLife has owned the land since 1975, but recently decided to divest itself of the holding. The sale for construction of a new Algonquin High School could be in jeopardy, given that Northborough residents recently nixed a spending measure to fund design plans for the school.
In the other land sale, EMC Corp. spokeswoman Dana Lieske confirmed last week that the information storage company has placed 140 acres owned by Flatley under agreement, and will do so with another 140 acres once a zoning change is approved. The firm ultimately hopes to construct up to 1.6 million square feet in total on the two parcels, with a mix of office and research space anticipated. If permitting goes as hoped, Lieske said the first building would be completed sometime in 2002.
“It’s still a ways off, but we are working on it,” Lieske said. The property is adjacent to the Data General real estate acquired as part of EMC’s recent purchase of that high-tech company.
North Station
In Boston, meanwhile, the sale of office properties remains brisk, with the new owners of 200 Portland St. having paid more than $200 per square foot for the 102,000-square-foot structure. Previously owned by the Archon Group of Texas, Daejan Holdings PLC of London beat out several suitors with its $21.3 million offer.
Broker Gary Lemire of CB Richard Ellis/Whittier Partners said he believes the sale “is a testimony to the strength of the North Station market,” with the district currently sporting a vacancy rate under 1 percent. Abundant public transportation, a new state courthouse and the addition of several restaurants have all improved the area markedly in the past several years after being one of the worst-hit office submarkets during the real estate crash of the early 1990s.
Lemire also said he believes Daejan was interested in increasing its presence in the Hub, with the company already owning the nearby 77 North Washington St. office building, as well as two similar properties on Franklin Street. “They were very good to deal with,” Lemire said of Daejan, which is represented locally by the Finch Group. “Overall, it was one of those deals that went very smoothly.”
Codman Co. broker Tim Lescalleet said he is not surprised that 200 Portland St. reaped more than $200 per square foot, noting several other properties in that market have already traded at that level, including the $200 per square foot paid for 205 Portland St. In addition, Codman is presently marketing 141 Portland St. for $5 million, or $224 per square foot for that four-story building. One bonus in that deal, Lescalleet added, would be long-range development potential of constructing an eight-story building on the parcel.
In the nearby Financial District, State Street Realty Advisors reportedly has agreed to buy 211 Congress St. from the Bristol Group. Calls to the brokers at Insignia/ESG were not returned by press deadline, but sources insisted that the MetLife subsidiary has committed to the 11-story, 74,000-square-foot building. Bristol had been asking $22 million – or $301 per square foot – for the building, but sources said the actual sales price will likely be in the $285 per-square-foot range.
