The Hoffman Building, located at 160 North Washington St. (above) and 131 Beverly St. in Boston’s North Station district, reportedly is being peddled by its owners to Ajax Realty Group, a New York-based developer.
Undaunted by past failures to trade a gritty office/warehouse in Boston’s North Station district, owners of the 400,000-square-foot complex are again pursuing a sale, this time to a New York developer said to be planning luxury condominiums. After being peddled in the $30 million range during the Hub’s economic boom that ended in mid-2001, the price has now reportedly dipped below $20 million.
Flanking the new Leonard P. Zakim Bunker Hill Bridge and fronting the Charles River, 160 North Washington St. and 131 Beverly St. are being pursued by Ajax Realty Group, according to sources, with several industry professionals claiming the two sides already have reached a tentative agreement. “They absolutely have it tied up,” one source insisted of Ajax.
Locally referred to as the Hoffman Building, the conjoined structures have attracted serious suitors before, including the now-disbanded Cathartes Investments and, more recently, Burlington-based Nordic Properties. Bordering Boston’s northern gateway, the parcel was under agreement to Nordic for more than two years until that pact quietly fell apart last year during the final throes of negotiations. While nowhere near as long as the process with Nordic, Ajax and the Hoffman Building’s ownership have been in discussion for several months, sources said.
The owner of the buildings is a private trust led by brothers Herbert and Martin Hoffman and partner Julius Cohen. Efforts to contact Ajax Realty were unsuccessful, but Martin Hoffman last week downplayed consistent rumors that Ajax already has committed to buying the long-held properties. “We’re talking to them,” Martin Hoffman concurred, but he stressed that “nothing is complete.”
“Call back in a month and we might have something to say,” he offered. “Right now, it’s a non-story.” Martin Hoffman did not reveal the asking price for the buildings or what Ajax intends to do with the properties if a deal is consummated.
‘Lots of Work’
Nordic officials have never explained what killed that firm’s prolonged effort to buy the Hoffman Building, but some sources have claimed environmental issues at the two-acre complex proved to be the main stumbling block. Totaling about 175,000 square feet of rentable space, 160 North Washington St. was to have remained as office space under a design conceived by Nordic’s architects, CBT/Childs Bertman Tseckares. The Beverly Street building would have been renovated into a residential use. Ajax reportedly intends to convert the entire development into condominiums.
Once all but unheard of in the North Station area, residential uses are fast becoming part of the neighborhood’s eclectic mix. Following construction of the Lowell Square apartments in the mid-1990s, Intercontinental Real Estate Corp. overhauled 226 Causeway St. into office space and upscale apartments in 2001. Grafted on top of an existing brick warehouse, the 6-story residential section became so coveted that Brighton-based Intercontinental last summer sold that portion of the building to J.S. Karlton Co., a Connecticut-based firm now selling the units as condominiums.
If Karlton’s experience is any barometer for 226 Causeway St. – which was renamed Strada234 – the abutting Hoffman properties might fare well. Less than six months after Strada234’s 88 units went on the market, more than 70 already have been spoken for, according to Kevin J. Ahearn, a cofounder of luxury condominium broker Otis & Ahearn who is marketing the upscale units.
“That’s the fastest velocity we’ve ever been involved in,” Ahearn said of the sales pace. “People are reacting to the building very positively.”
Even with that upbeat prognosis, any buyer will need to infuse substantial capital into the Hoffman Building, sources familiar with the properties maintain. “It’s going to take lots and lots of work,” said one investor who has toured the buildings. “They are very old and very tired.”
Coupled with Boston’s dire office market, the condition of the buildings likely contributed to drive the price down, said the source, who requested anonymity. The Cathartes deal reportedly failed when a major office tenant opted against moving to the property just as the market downturn began to take root.
The Hoffman trust also has faced state orders to repair a pier in front of the buildings enough to support a temporary extension of Boston’s HarborWalk. Citing a pending sale of the parcel, the owners in January sought a two-year extension to make the HarborWalk repairs, said Vivien Li, executive director of The Boston Harbor Association. It is unclear what the status of those discussions is at present, or whether they have impacted efforts to sell the two buildings.
Regardless of any decrepit aspects, the Hoffman Building is considered particularly desirable because of the supreme location. Drivers traversing the Zakim Bridge have a prominent view of the buildings, while the depression of the Central Artery in the North Station district is seen as another plus for commercial properties in that area. The residential portion of 226 Causeway St. traded for more than $40 million, for example. Investment sales of Boston buildings has held up surprisingly well through the lingering recession, with numerous assets currently in the pipeline.
