The empire that was crumbling is being rebuilt, and if he has his way, its borders will be expanded following Kambiz Shahbazi’s refinancing of his Massachusetts commercial real estate holdings.

The New York-based investor is nearly finished refinancing 2 million square feet of commercial space owned by his firm, KS Partners, stretching from Braintree to North Andover and Westborough. The refinancing will leave those properties debt-free, Shahbazi told Banker & Tradesman.

Now, after restructuring his debt and raising new capital, Shahbazi is looking for property to purchase, and trying to offload at least one of his own assets at 2200 West Park Drive in Westborough. While he does not have specific assets in mind, Shahbazi said he would “love to buy” in downtown Boston, would consider property along Route 128 north or south, and wouldn’t shy away from Route 495.

“I’m optimistic in the sense that obviously we’ve raised a lot of new capital and bought a lot of our notes back,” he said. “So we have a significantly reduced basis and almost no debt on a big chunk of our portfolio.”

KS Partners is looking for the same kind of product it has always kept in its portfolio – namely office, R&D and flex properties, and possibly retail – but it needs to be an ideal deal and asset.

“Buying for the sake of buying wouldn’t be as appealing to us,” Shahbazi said.

Money From Nothing

Shahbazi made himself known in the local market during the real estate boom years by purchasing properties in 1980’s-vintage Class B office and R&D space in secondary suburban markets like Billerica, Chelmsford, Wilmington and Braintree coveted by few others.

He has seen portions of his Massachusetts portfolio foreclosed on or seized by lenders in the last two years, and has not purchased back any properties that were his.

But in the best of times, Shahbazi controlled nearly 5 million square feet in his mostly suburban, Class B portfolio. And while he lost some properties, he was able to extract millions of dollars out of troubled or foreclosed properties purchased largely with other people’s money. Most notably, he pulled $24.3 million from the Shiraz Portfolio – with assets in Chelmsford, Watertown and Acton – after his $55 million acquisition cost was subsequently covered by a $62.5 million commercial mortgage backed security offering from PNC and $16.8 million in secondary equity from CBRE Realty Finance.

Similar strategies of recouping his initial investment through savvy refinancing and outside secondary investment led to profits of $21.3 million on the GE Capital Portfolio, with properties in Boston, Andover and Westborough; and $16.8 million on the GS Portfolio, stretching from Lowell to Wilmington.

Today, in addition to scouring the market for deals, Shahbazi is also looking to divest some of his better assets, ostensibly to help fund future acquisitions.

No Trophy

The property at 2200 West Park Drive in Westborough is 95 percent occupied and has no debt, according to Scott Farmelant, who handles public relations for Shahbazi.

“KS Partners is selling the building because they believe the timing is excellent to sell a stabilized building that offers great value to the buyer,” Farmelant wrote in an e-mail. “The building is far from troubled. It is in great condition”

The Westborough building is just the kind of property investors are looking for if they don’t opt for trophy assets, said Kevin Hanna, a partner in the corporate advisory services branch of Boston commercial brokerage FHO Partners.

“Really what’s selling right now are core assets … very well located and very well leased that seem to be in favor right now, so from an assert class perspective, that’s what’s demanding a lot of attention,” Hanna said. “You see lower cap rates for those types of properties. When you get out past [Route] 128 there’s not as much for sale and along [Interstate] 495, and I think that’s because those properties may not be, it’s sort of a subjective thing, considered ‘trophy properties.’”

“With that said, this is a very well located property for 495 … and in probably one of the nicest office parks on 495,” he added. “It has very good access north, south, east and west. Westborough also has relatively low taxes.”

While Hanna did not want to speculate how much the building would likely sell for, Shahbazi purchased 2200 West Park Drive in 2006 for $10.4 million, according to public records.

“It’s an attractive building in that market, so I think it would garner a fair amount of interest,” Hanna opined.