The ill-fated InWood Office Park never came to be on this parcel on the Woburn/Reading line, where Wilmington-based Howland Development Corp. is planning to oversee a multifamily development.
After an extensive marketing program, a sprawling land parcel fronting Route 93 on the Woburn/Reading line is being purchased by a Wilmington company that plans to pursue a multifamily development on the site. According to sources close to the deal, Howland Development Corp. last week signed a purchase-and-sale agreement to acquire the ill-fated InWood Office Park.
“They are buying it and it is being zoned for residential,” acknowledged one source. The sales price, reportedly contingent on the number of multifamily units approved for the site, is said to be in the $14 million to $17 million range.
The 57-acre parcel has already had extensive infrastructure such as roads and utilities put in place, an investment made when former developer Edward Callan aggressively tried to position the property for office development. That attempt died recently in lock step with the crumbling suburban office market, which has been in a freefall since the high-tech boom burst in mid-2000.
Best known for his work developing the Edgewater Office Park in nearby Wakefield during the 1980s, Callan lost control of InWood last year when it was taken over by the PNL Cos. of Texas, which purchased the loan on the property. PNL secured title to the land earlier this year for $10.5 million, and has since been peddling it to potential buyers.
With its roots dating back to the 1950s, Howland Development Corp. is best known for constructing warehouse/distribution properties, primarily north of Boston, but the firm did dabble at one point in repositioning troubled condominium projects. NAI Hunneman Commercial Co. Senior Vice President Mark Hall, who is brokering the sale with Hunneman colleague David Ross, referred questions about the sale to the PNL Cos. Calls to PNL and Howland principal Michael A. Howland were not returned by press deadline, but one source insisted that the company has committed to the deal.
Sales Flurry
The InWood agreement comes amid a flurry of recent multifamily asset sales. Even with the apartment sector having been hit by the economic downturn, institutional and private capital continues to chase multifamily opportunities, and the Bay State’s limited supply of investment grade apartment properties has made the region especially popular.
Following a record 2002 for multifamily investment sales, Greater Boston has seen several properties change hands as the mid-year approaches. Among the more significant transactions was the $34 million sale of a 280-unit complex in Stoughton, with the Nordblom Co. handling that purchase by Home Properties of America. Vice President Jonathan Close and Nordblom’s multifamily team also brokered Lend Lease Real Estate Investment’s purchase of Mystic Place in Medford, a 465-unit asset acquired for $66.5 million. Meanwhile, in a deal first reported by Banker & Tradesman in April, Equity Residential Properties Trust last month paid $35 million for the Gateway Apartments in Malden Center. That deal, brokered by Cushman & Wakefield, included 203 apartments and 36,000 square feet of office space.
Cushman & Wakefield is currently working with Eastdil Realty of New York on the disposition of 5,600 apartments owned by Capital Properties. The bulk of the units are located in New England, but the properties run well down the eastern seaboard into Philadelphia, Atlanta and Washington, D.C. Cushman & Wakefield is brokering the Massachusetts and Connecticut portion, including more than 1,000 units in Framingham.
The near-term outlook for multifamily investment does appear somewhat mixed. Unlike the troubled office and hotel sectors, institutional investors have continued to pursue multifamily deals through the downturn, with many observers citing that product type as among the more resilient to a recession. Meanwhile, the lack of deals for core downtown office product is reportedly leading a surge of German capital to consider multifamily as an alternative. To date, however, there has been little commitment among that source to apartment assets, and some experts on overseas capital predict it could ultimately be difficult for risk-adverse German investors to make that leap.
As for the fate of InWood, it is currently unclear exactly how many units, or what type of structure, Howland is entertaining for the property. While one PNL official said last year that the parcel could support upward of 500 units, a source familiar with the property questioned whether Howland will be able to garner support for that level of build out. The more realistic figure would probably be in the 300-unit range, opined the source, both geographically and politically. One source maintained that Howland’s familiarity with the property and the surrounding communities may have played a role in the company’s designation as developer. According to the source, Howland also owns an important piece of land adjacent to InWood’s entrance.
Given potential traffic burden on Wilmington and Reading, sources said they expect those two communities will be involved in the zoning discussions, but the property is mostly located in Woburn. The relative lack of impact on Woburn and a new state plan to reward cities and towns which promote housing could help push the rezoning through there relatively easy, said the source familiar with InWood, but that observer maintained the outcome is cloudier in the other two affected communities.
Joe Clements may be reached at jclements@thewarrengroup.com.
