Blame it on the shortened days, the start of school or the approach of the equinox, but the commercial real estate investment sales season of 2012 has officially begun. Several properties around Boston and Cambridge are expected to potentially change hands before the end of the year as brokers and buyers get back to work.
From Boston’s Fort Point area and Financial District to the Kendall Square and Alewife submarkets of Cambridge, there is well over $1.2 billion of office space on the market or about to be purchased, according to commercial real estate professionals. After what local market insiders say has been a somewhat slow year for investment sales, the buckets with the ducats are focused on getting deals done and placing capital in hard assets before year-end.
A large chunk of the dollar amount of major office assets currently on the market comes from Beacon Capital Partners, which is currently peddling the 37-story skyscraper at One Beacon St. According to sources, Beacon Capital is expecting a price of around $450 million.
The 1.2 million-square-foot property is about 85 percent occupied, according to one industry executive with knowledge of the marketing process, which is being led by Cushman & Wakefield. Sources tell Banker & Tradesman the core market property will command high levels of interest from deep pockets looking for opportunities.
Beacon Capital bought the tower for $423 million in 2006, according to information from The Warren Group, publisher of Banker & Tradesman. The building was assessed earlier this year at $321 million in total value. Additionally, the potential sale of One Beacon comes less than a month after the announcement that an affiliate of Beacon Capital paid $59 million for a 99-year ground lease for the approximately 200,000-square-foot tower owned by The First Church of Christ, Scientist at 177 Huntington Ave. in Boston.
Bio, Tech
In the life sciences world, the Beal Cos. is planning to sell one of its signature Cambridge properties, known as One Kendall Square. The 676,000-square-foot cluster is 94 percent occupied and comprised of nine buildings bounded by Broadway and Cardinal Medeiros Avenue in East Cambridge. Industry sources said real estate investment firms including Alexandria Real Estate Equities and BioMed Realty Trust would likely be interested parties.
Next is the former 844,000-square-foot Sun Microsystems campus in Burlington, which is expected to sell to JP Morgan for about $215 million. The sale of the campus on Network Drive in Burlington’s Northwest Park will be one of the most notable suburban deals since Boston Properties purchased Bay Colony Corporate Center in 2010, industry experts told Banker & Tradesman.
The approximately 844,000-square-foot campus is owned by a joint venture of Minnesota-based CarVal Investors and Burlington’s Nordblom Co., which will retain its minority stake. The joint venture purchased the seven-building portfolio for $212 million in 2007. Now, the CarVal fund used to purchase the campus is closing out, and the firm needs to sell the assets to pay investors.
The campus, which Sun built in 1998, is now about 95 percent occupied by companies including Avid Technologies, Oracle and biotherapy developer Dyax. It also includes development rights for upwards of 200,000 square feet of potential build-to-suit space.
Growing Profile
In Boston’s Fort Point neighborhood, part of the so-called Innovation District, Banker & Tradesman recently broke news that National Development is looking to sell a six-property portfolio that could fetch $120 million. The brick-and-beam portfolio includes 33 to 41, 34 and 44 Farnsworth St.; 332 and 374 Congress St.; and 263 Summer St., the property topped by the landmark Boston Wharf Co. neon sign.
Potential buyers include Beacon Capital, Shorenstein Properties and DivcoWest, sources told Banker & Tradesman.
That sale is being pushed especially by the recent investor activity surrounding the Brickman portfolio, a four-building, 362,000-square-foot office portfolio in the Fort Point district that DivcoWest has under agreement for roughly $105 million.
“[The Seaport] is a very exciting and dynamic market right now with a tremendous amount of investor interest,” said Thomas Alperin, president of National
Development. “Given the level of acitivity and pricing on [the Brickman portfolio] … that made us take a hard look at considering selling our assets. It’s an institutional-profile group of assets and there’s a lot of capital chasing good quality assets right now.”
Last but not least, New Boston Fund is selling 55 Wheeler St. in Cambridge, a 126,149-square-foot office property that industry insiders are expecting could sell for $50 million.
“Generally speaking, Boston is one of the top three or four U.S. investment markets,” said David Pergola, principal with FHO Cassidy Turley, with a focus on investment sales. “There is a strong appetite to invest in hard assets in markets like Boston and Cambridge. The Innovation District is a submarket that is unique in feel, culture and energy. The leasing velocity that’s occurred in that submarket has been astounding during the past year.”
