Six months after one suitor backed out, Lend Lease Real Estate Investments has reportedly found a new buyer for One Boston Place, the 41-story office tower located in Boston’s Financial District. Blackstone Real Estate Advisors of New York is reportedly acquiring the 770,000-square-foot building in a joint venture with an unnamed partner, sources told Banker & Tradesman last week.
There’s validity to that, one source familiar with the deal told Banker & Tradesman last Friday. Another source confirmed as much, placing the price in the $190 million range. If so, that would be below the estimated $200 million that Lend Lease had initially sought when the 30-year-old tower was placed on the market last fall.
Calls to Blackstone and Eastdil Realty, brokers for the building, were not returned by press time. The status of the deal is unclear in terms of whether a formal agreement has been inked, although one of the sources said they believe it has. If it hasn’t, they are awfully close, the source said.
According to some observers, Lend Lease may have been a bit late in deciding to market the building, with interest appearing to wane after several tower sales reached record prices between 1997 and the middle of last year. The market was especially hot when real estate investment trusts were major players in the mid-1990s, but the retreat of those financing vehicles following a difficult 1998 led to a drop-off in investor interest.
Earlier this year, for example, nearby 99 High St. sold for $168 million after initially being shopped for $185 million, while 99 Summer St. closed last week at $66.3 million to Paradigm Properties and the Carlyle Group. That tower’s sellers, the Archon Group of Texas, had previously advertised the building at $72 million.
Lend Lease appeared to have found a buyer in Hines Interests last year, but the deal fell apart when the potential investors sought to drop the price below the offering mark, supposedly down into the $195 million range. One industry observer familiar with the building said the age of its physical plant concerned some who had looked at it.
Everything has a life cycle, and there’s things in that building that are nearing the end of their life, said the source, citing mechanical systems and elevators as some of the items in need of an upgrade. The tower has been praised by others, however, particularly for its location, the management, and because a number of leases are set to roll over in the next few years.
