The ongoing redevelopment of the Prudential Center has helped bolster Boylston Street as a retail destination.
Hoping to capitalize on investment interest in Boston’s Back Bay district, Eastern Development Co. has hired Spaulding & Slye Colliers to market the former Planet Hollywood building and another property on bustling Boylston Street. The Woburn-based real estate firm reportedly is seeking a total of $25 million for the properties.
In a somewhat related move, Eastern has also selected Cushman & Wakefield to sell a 1.5 million-square-foot portfolio of community shopping centers located in New England. That package, said to include seven prime assets, carries an asking price in the $150 million range.
“We’re thrilled to have them,” Spaulding & Slye Colliers broker Scott J. Jamieson said of the listings for 801 and 899 Boylston St. Developed as the home of Planet Hollywood, 801 Boylston St. was instead converted into a mix of office and retail space after the national restaurant chain went into bankruptcy in the late 1990s. The 24,000-square-foot building was subsequently scooped up by Eastern Development, which leased the property to such tenants as Fidelity Investments and Priscilla’s Bridal store.
The ongoing redevelopment of the Prudential Center has since helped bolster Boylston Street as a retail destination.
The nearby 899 Boylston St. property features a Trader Joe’s retail store and a Hollywood Video, while the top two floors of the 16,000-square-foot building are occupied by the Berklee School of Music. Jamieson said Spaulding & Slye is brokering 801 and 899 Boylston St. as a package, but added that they can be sold separately as well.
Feeding Frenzy
The retail offering being brokered by Cushman & Wakefield is hitting the market at a time when the national economic downturn, the lingering strife in Iraq and a continued flood of job losses in Massachusetts have investors increasingly shying away from office and hotel assets. Partly due to resilient consumer demand, and by the basic need to eat, grocery-anchored shopping centers have been a particularly hot item of late. The problem, according to brokers such as William J. Beckeman, is in finding retail owners willing to sell such properties.
“There continues to be a tremendous amount of interest, but just not enough product available,” said Beckeman. “There are far more buyers than there are sellers right now.”
Beckeman’s firm, Finard & Co. of Burlington, does have a few deals in the works, but Beckeman said it has been a slower year than normal for retail property sales volume. Given the lack of alternative investments, many owners are reluctant to sell a peforming real estate asset, even when commanding prices at or near record levels. As with other property types, refinancing has become a popular strategy among retail owners interested in holding onto their assets until the overall market improves.
As for the Eastern portfolio that Cushman & Wakefield is marketing, sources said it will be available both in total and on a one-off basis, allowing buyers to select specific properties from the pool. At 1.5 million square feet, the package would trade at about $100 per square foot if the asking price is met. While explaining he was unaware of the deal, Beckeman said that figure would be about right for the type of property in the package.
Calls to Eastern officials were not returned by Banker & Tradesman’s press deadline, while Cushman & Wakefield of New England President Robert E. Griffin Jr. declined to provide details about the portfolio his firm is marketing, citing confidentiality agreements with the client. Nonetheless, Griffin said he anticipates a surge of activity among investors. “It’s going to be as hot as can be,” he said, with several of the properties said to include grocery store anchors.
Along with properties it has acquired recently in New Hampshire, Eastern Development purchased and redeveloped several former Ann & Hope locations, including one in Danvers that has been redeveloped into a Kohl’s Department store. One source said they believe the Danvers property may be in the Cushman & Wakefield listing, but that rumor could not be confirmed by press deadline.
The two Eastern offerings are expected to be unveiled in full at this week’s International Council of Shopping Centers exposition in Las Vegas. The event, which runs through this Wednesday, is expected to draw a number of Hub-based retail professionals, including Eastern Development officials. Griffin said several members of his company will also be attending, as well as brokers from Spaulding & Slye.
