The owners of 33 Arch St. in Boston’s Downtown Crossing – one of the few downtown core properties to hit the market in years – are rumored to be asking as much as $360 million for the property, according to industry sources.
AREA Property Partners, of New York, and Montreal-based SITQ, a real estate investment unit of Canadian pension-fund manager Caisse de Depot et Placement du Quebec, are expected to ask for roughly $600 per square foot for the 600,000-square-foot property. For comparison’s sake, Boston Properties recently purchased the 1.75 million-square-foot John Hancock tower in the Back Bay for $930 million, or roughly $530 per square foot.
While investment sales professionals said the price is high, 33 Arch is one of few downtown core properties to come to market in recent years, and whoever buys it will also own the 800-car garage that comes with the building. The property is currently 14 percent vacant.
But since so much demand is now coming from investors that kept their cash pocketed during the recession, and Boston is so high on the list for domestic and foreign investors, the time is right to sell such properties, according to real estate executives.
"There’s a tremendous pent-up demand for core properties in markets like Boston, where there is limited supply and strong long-term economic fundamentals," said Lisa Campoli, executive vice president for Colliers International in Boston. "There have been very few core properties that have come to market. The supply and demand of opportunities has created a good environment to offer properties right now."
Potential investors for the building run the gamut from REITs to pension funds, and could be a partnership of a local operator and foreign capital. German and Swiss companies like Credit Suisse, UBS and Deka Privatbank could be interested, according to one source.
"The question is whether Boston Properties decides to take a run at it or not," said one insider, who added another potential buyer could be Dean Stratouly, president of the Congress Group, the developer of 33 Arch St. that previously sold the building.
