While Oasis Development Enterprises reportedly has agreed to purchase an 11-building portfolio of office properties in Greater Boston, the group’s $100 million offer to purchase Clock Tower Place (pictured above) in Maynard is said to have been rejected by owner Wellesley Rosewood Capital Co.
Despite being thwarted in an effort to buy Clock Tower Place in Maynard, an Asian-backed investment group is continuing an aggressive campaign to acquire Massachusetts real estate assets, headlined by its pursuit of a major suburban Boston portfolio. Carrying a price tag estimated by sources at nearly $160 million, the cache of 11 buildings and one land site features mostly net-leased properties assembled in the late 1990s by a San Francisco real estate investment trust.
Oasis Development Enterprises reportedly will acquire such assets as the headquarters of the Bay State Gas Co. in Westborough, 355 Wood Road in Braintree and the Concord Farms Office Park in Concord, a five-building complex whose tenants include Sybase Inc. and Welch’s Foods. Totaling close to 900,000 square feet, the portfolio is owned by iStar Financial Group, which took control of the buildings when it acquired TriNet Corporate Realty Trust in 1999. TriNet had gone on an extensive buying spree in Massachusetts in 1997 and 1998, doling out more than $125 million throughout Greater Boston for a range of office, flex and industrial product.
The deal with iStar Financial Group follows recent acquisitions in Greater Boston from firms controlled by Raymond C. Lee, an investor whose roots are in Hong Kong. In recent months, Lee’s entities have secured the landmark Tower at Northwoods in Danvers and two prime office buildings in Boston’s Financial District, 10 Milk St. and 100 Franklin St.
Lee’s local representative, Ivan S. Chow, declined comment when contacted last Friday, telling Banker & Tradesman he is “not at liberty to discuss information” related to the iStar portfolio. Officials at Cushman & Wakefield of Massachusetts, which is peddling the portfolio for iStar, also shunned questions on the matter. Nonetheless, sources insisted that Oasis has committed to the deal, with a closing supposedly already slated. “It’s going to happen,” insisted one source familiar with the negotiations.
Clocking Out
The same apparently cannot be said for Clock Tower Place, which Oasis had set it sights on after owner Wellesley Rosewood Capital Co. hired CBRE/Whittier Partners to market the hulking former mill complex. The one-time home of Digital Equipment Corp. was successfully repositioned into a multi-tenanted office complex in the late 1990s, led by its lease to Internet employment icon Monster.com. According to sources, Oasis had offered close to $100 million for Clock Tower Place, but Wellesley Rosewood officials reportedly nixed the deal and have now pulled the 1.1 million-square-foot complex off the sales block.
CBRE/Whittier investment specialist Gary J. Lemire, who was heading up the sales effort, referred questions to Wellesley principal William A. DePietri, a veteran developer who oversaw the renovation program along with Robert E.Buonato and several other limited partners. DePietri, owner of Capital Group Properties, did not respond to inquiries by press deadline.
Industry observers spoken with expressed surprise that a Clock Tower Place sale is being shelved, with some maintaining that the prospect of rising interest rates and potential rebound of the stock market in 2005 could limit investor enthusiasm for commercial real in the future. “It won’t last forever,” one broker warned of the current red-hot investment climate. Another source knowledgeable about Clock Tower Place called the reported $100 million bid by Oasis “outstanding,” and opined that the owners are unlikely to reap much above that rate, even though industry estimates of $100 per square foot were bandied about when the building was put up for sale this spring. The initial target price, according to the source, was about $98 million, a level supposedly exceeded by Oasis.
“They got what they asked for,” said another source who claimed the Oasis bid was nonetheless rejected. The source also agreed that Clock Tower Place is no longer for sale. Chow confirmed that Oasis had looked at Clock Tower Place, but would not provide details as to the depth of its interest. Lee, according to Chow, is “one of the principal investors” in the investment group which did buy 100 Franklin St. and 10 Milk St. Chow declined to outline the investment philosophy of the operation, save for acknowledging a continued focus on Massachusetts. “We’ve been fortunate to get a few good properties,” he said, adding, ‘they are few and far between.”
Companies such as Oasis and East-West Enterprises have certainly been among the more active buyers locally in 2004. Earlier this year, East-West paid $23 million for the Tower at Northwoods, then spent nearly $57 million on 10 Milk St., a 235,000-square-foot retail/office building abutting the Hub’s Downtown Crossing district. A few weeks later, Oasis paid $19.5 million for 100 Franklin St., home of the Boston Stock Exchange and renowned as one of the city’s most historic business addresses.
As for the iStar portfolio, Oasis will supposedly purchase 2, 3, 4, 5 and 6 Concord Farms in Concord, which total just under 300,000 square feet of office space, as well as an adjacent land site of 5.5 acres. There are also several South Shore properties included, such as 76 Pacella Park Drive in Randolph, a 48,000-square-foot R&D building, and 1022 Hingham St. in Rockland, an office/flex structure with more than 125,000 square feet. Another asset is in Norwell at 101 Philip Drive, which contains 33,000 square feet of R&D space. The portfolio also includes a 213,000-square-foot office building in Las Vegas.
According to sources, the package was peddled as a “net-leased portfolio” given the strong credit tenants featured in many of the buildings. Blue Cross Blue Shield of Massachusetts occupies the Rockland asset, while Haemonetics leases the Braintree facility. Bay State Gas Co. has a long-term lease at the Westborough property, the 88,000-square-foot 300 Friberg Parkway.
