After retrenching nearly two years ago amid a stormy investment climate, Leggat McCall Properties has placed its 10/Ten Post Office Square office building in downtown Boston up for sale again, company officials have acknowledged.

It is on the market, LMP Chairman J. Brad Griffith told Banker & Tradesman last week. We think it’s a great time to sell.

Such was not the case in the summer of 1998, when LMP first put the 14-story office building on the block. What had been a strong investment market suddenly cooled on the wings of growing global economic troubles that shook the capital markets, and Griffith said the firm opted against selling the building in such a dour atmosphere. Complicating the situation was the pending departure of Fidelity Investments from 140,000 square feet in the property, which totals just over 400,000 square feet.

Nobody was buying vacancy anymore, Griffith recalled. They wanted more stable real estate.

Changing strategies, LMP decided to renovate and retenant the building itself, proceeding to pump an estimated $15 million into new lobbies, elevators and mechanical systems. The facade was also restored, and the building today – which is actually two conjoined properties – is now 100 percent leased. Major tenants include Boston Private Bank & Trust, Dow Jones and Landvest.

Griffith said it was always LMP’s intention to market the property once it was stabilized. The firm is asking $115 million for the building, which was originally constructed in the late 1920s. Besides the recent improvements, Griffith said he considers the pricing attractive for investors because approximately of 45 percent of the space is leased below market value, with an opportunity for significant upside for the new buyer. Certainly the Hub’s office market has improved markedly during the past year, with vacancy currently at 4 percent and rental rates for office space averaging above $40 per square foot.

Others agreed that 10/Ten Post Office Square will attract substantial interest, with Codman Co. principal Ted Wheatley noting the building’s location in the heart of the city’s Financial District as one strong selling point. Although the building’s small floorplates reportedly make it difficult for large users, Wheatley said it fits well for professionals such as attorneys and accountants, as well as for high-tech companies. Standing almost completely alone, 10/Ten also offers above-average window views, Wheatley said.

The next owner can count on a steady investment for the future, Wheatley said. The building appeals to a very broad range of tenant types.

One possibility that is apparently dead, according to Griffith, is the notion of tearing the building down in favor of a high-rise tower. While LMP did advance that notion prior to marketing 10/Ten Post Office Square in 1998, Griffith said the subsequent renovation and other factors will make that option unworkable financially.

It was a unique opportunity in time that will never happen again, Griffith said. LMP’s plan was also unpopular with the Menino administration when it was initially floated, effectively killing that effort even before it began.

Post Office Square Building on the Block

by Banker & Tradesman time to read: 2 min
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