In a move that reflects the changing face of Boston’s Downtown Crossing district, a longtime owner of several small office/retail buildings has put the portfolio up for sale, industry sources said last week. A.P. Levin owns a swath of commercial real estate that includes holdings on Washington Street, Temple Place and West Street.

They are very intriguing properties, said Michael Schaffer, a retail broker familiar with the package. They should do well.

In another developing investment deal, industry sources told Banker & Tradesman late last week that Paradigm Properties has agreed to buy 99 Summer St., a 20-story office tower also located in Downtown Crossing. The property has been marketed for several months, with an on-again-off-again courting by Paradigm and an investment team that reportedly includes the Carlyle Group of Washington, D.C.

On the Levin sale, calls to principal Daniel Levin were not returned by Banker & Tradesman’s press deadline, but sources said the portfolio is being sold by Trammell Crow’s Middle Markets Group. Brokers at the Boston-based real estate services firm also did not return phone calls by deadline.

One source familiar with the undertaking said there are at least 11 buildings in the Levin portfolio, but efforts to clarify that figure or the amount of square footage included in the sale were unsuccessful. Perhaps the most significant of the group would be the 99 Chauncy St. office building, while other properties on the block are 10-12 West St., 21-23 Temple Place and 523-525 Washington St. Other nearby buildings owned by Levin and also supposedly being sold include 25-27, 29-35 and 37-43 Temple Place; 13-15 and 43-45 Winter St.; and 134-136 Boylston St.

From what I understand, it’s the entire [family] portfolio, said one source. According to Suffolk County Registry of Deeds records, the properties are in trusts named after Henry and Maynard Levin, with some of the family’s ownership dating back to the 1930s.

The Levins, better known as the operators of the Dream Machine arcade chain, have controlled most of the buildings for decades, according to one broker who described the properties as Class C buildings with a Class A location. Most of the structures are in need of extensive repair, but the broker said the improving condition of the Downtown Crossing and Mid-Town markets bodes well for the area’s future.

It’s definitely an up market, said the broker. It gets better down there every day.

One leading catalyst for change is the massive Millennium Place mixed-use complex underway a few doors down from the core of the Levin fiefdom. Currently under construction, the Millennium development will include a movie theater, condominiums, retail space and Ritz Carlton hotel when completed next year. The project is expected to bridge the gap between the Downtown Crossing area and the Back Bay, with many observers predicting it will result in a boon for the West Street/Temple Place district.

Considered among the most architecturally significant assets in the Levin portfolio is 10-12 West St., a seven-story, 33,000-square-foot building located around the corner from the recently renovated Lafayette Corporate Center. City of Boston records assess the property at $4.8 million.

‘Place To Be’
Downtown Crossing itself has undergone significant changes in recent years. The failed Lafayette Place Mall was converted last year into several hundred thousand square feet of office space, although an 80,000-square-foot section along Washington Street is being marketed as retail. Schaffer, whose firm is leasing the retail portion, declined comment on the status of any negotiations there, but said he is confident the shopping district is on the upswing.

We’re very encouraged, Schaffer said. People are clearly perceiving the area as the place to be.

Schaffer’s optimism comes despite some recent struggles in the area, with Syms Clothing having performed below par since opening last year at 55 Summer St. and the Loehmann’s Department Store leaving its multi-level space recently after just three years. The former Herman’s Sporting Goods store on Summer Street has sat vacant for several years.

Schaffer noted, however, that Loehmann’s was quickly replaced by Designer Shoe Warehouse, a chain that he predicted will do well once it opens. He attributed the department store’s woes to layout limitations and poor merchandising, while a deal for the Herman’s space – which Schaffer & Assoc. is also marketing – is nearing completion, according to sources. Schaffer declined comment on that situation, but insisted that Downtown Crossing is a popular destination for national retailers.

The 99 Summer St. tower sale, meanwhile, could help solidify the ownership picture for the area after being in flux for several years. Currently owned by the Archon Group, 99 Summer St. was a 1980s-era office building that came on line just as the Hub was entering its worst economic downturn. The red-roofed tower, which totals 270,000 square feet, was eventually foreclosed on by Traveler’s Insurance before being sold to Texas-based Archon.

Paradigm Properties officials had previously acknowledged interest in 99 Summer St., but recently said any deal was off. That apparently has changed, however, with one source close to the deal insisting that Paradigm has it under agreement and is currently performing due diligence on the structure.

As of right now, they’ve got it, the source said. I guarantee it.

Calls to Paradigm President Kevin McCall were not returned by press deadline, while efforts to reach Spaulding & Slye, investment brokers for the sale, were unsuccessful.

Owners Changing Rapidly at Hub’s Downtown Crossing

by Banker & Tradesman time to read: 4 min
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