Boston Properties has committed to purchase Prospect Place, a 290,000-square-foot office building in Waltham, from owner TA Associates Realty of Boston.
Promising a hectic finish to the 2005 commercial real estate investment sales campaign, two prime suburban Boston office buildings are said to be changing hands, while a well-located asset in the Hub’s Fort Point Channel district has also found a new owner.
In the latest activity in what is shaping up to be a record year for office building transactions in the region, Boston Properties has committed to purchase Prospect Place in Waltham, according to sources, while Transwestern Investment Co. of Chicago is reportedly buying Brickstone Square in Andover. In the Boston sale, a private investment group has purchased 320 Congress St. for just over $8.6 million.
“There was a lot of interest in the building,” NAI Hunneman Commercial Co. principal David Ross said last week of the 320 Congress St. asset, with private opportunity funds, pension fund advisors and 1031 exchange players all pursuing the opportunity. Congress Plaza LLC eventually won out, paying approximately $170 per square foot for the 51,000-square-foot building. “We had an extensive marketing effort that resulted in wonderful pricing for the seller,” said Ross, who represented that entity, LNR, in partnership with other members of NAI Hunneman’s investment sales team. The firm secured the buyer in the deal as well.
The Waltham deal reportedly also generated substantial attention among buyers. Owned by TA Associates Realty of Boston, Prospect Place is considered one of the suburb’s top business addresses, featuring both Class A space and a prominent view overlooking the Route 128 corridor. The 290,000-square-foot building was recently put up for sale a second time after the owners last year tried to peddle that and the adjacent Prospect Hill Office Park together, a program that was aborted following a tepid response from investors.
After retrenching, the owners underwent a spirited leasing campaign and brought the properties to the market again this summer. The two developments were offered separately by broker Cushman & Wakefield in the more recent attempt, one which just resulted in Prospect Hill Office Park being put under agreement to a New York firm last month, a sale reported previously by Banker & Tradesman. Broadway Real Estate Partners LLC is paying an estimated $63 million for Prospect Hill, gaining control of the three-building complex in an improving office environment. Sources put a similar price tag on Prospect Place, which opened in 1991 after being developed by the Nelson Cos.
Calls to Cushman & Wakefield were not returned by Banker & Tradesman’s press deadline, while attempts to contact TA Realty principal Michael Ruane and Boston Properties officials were also unsuccessful. Nonetheless, sources insisted that Prospect Place is under agreement to the locally owned real estate investment trust, a firm that already has a substantial presence in the Central Route 128 office market, including such office properties as Reservoir Place, 200 West St. and the Waltham Weston Corporate Center.
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Transwestern Investment Co. also has a Waltham holding in its portfolio, acquiring the University Office Park last year in its first equity investment in the Bay State. Focused on value-added opportunities, the firm has moved up to the northern reaches of suburban Boston now, however, acquiring more than 1 million square feet at Brickstone Square. Developed by mill specialist Brickstone Properties, the complex enjoyed solid leasing in the mid-1990s but was devastated by the technology crash that gripped the state at the turn of the new millennium. Brickstone Square’s darkest days began in 2003 when shrinking venture capital company CMGI Inc. bought out of its lease and departed for Charlestown, leaving nearly 300,000 square feet in its wake of red ink.
The departure ultimately led to Brickstone being taken back by the lender, Lehman Bros. of New York, which retained CBRE/New England to market the empty space. The leasing effort produced impressive results in the interim, accentuated in September when CBRE brokers Hunter Emerson and George Nugent brokered an 85,000-square-foot lease with Northrop Grumman Inc. The defense industry company is relocating from 55 Walkers Brook Drive in Reading.
Calls to Transwestern officials at their Chicago headquarters were not returned by Banker & Tradesman’s press deadline, while Lehman Bros. officials also did not respond to inquiries. Although an exact price was unavailable, one source pegged the figure at about $80 million for Brickstone Square. Sources also claimed that Spaulding & Slye Colliers has been retained as leasing agents for the multi-building complex, although that rumor was also not confirmed as of press deadline. “They are in,” one source insisted of Spaulding & Slye.
As for the sale of 320 Congress St., Ross cited a combination of the building’s location in the heart of Fort Point Channel area, its overall quality and a solid tenant roster that includes Boston.com and Boston Metro, the local daily paper owned by the New York Times. The credit quality of the tenants is enhanced by lengthy terms on several of the leases, said Ross, offering a measure of stability for the new ownership.
