Irving, Texas-based residential builder JPI reportedly is buying this residential development site at Channel Center in Boston’s Fort Point Channel district.
In a bit of a Texas two-step, Beacon Capital Partners reportedly has found a buyer for a residential development site approved for Boston’s Fort Point Channel district.
Encompassing more than 160 units, the development rights are said to be under contract Irving, Texas-based JPI, a residential builder active in Massachusetts for the past decade. Sources put the sale price in the $12 million range. The bulk of the units would be located in a new 12-story building that would be part of Beacon’s mixed-use Channel Center complex on A Street a few blocks from the new Boston Convention & Exhibition Center. An existing industrial building at Channel Center would be converted into approximately 50 loft-style units, as well as several floors of structured parking.
“It is under agreement,” Cushman & Wakefield of Massachusetts President Robert E. Griffin Jr. concurred last week, although he declined to provide details on the pending sale or identify who has tied up the project. Cushman & Wakefield’s Capital Market Group is brokering the sale of the development rights on behalf of Beacon Capital.
Calls to JPI at its regional office in Southborough and to Boston-based Beacon Capital were not returned by Banker & Tradesman’s press deadline. Despite that, a source insisted that JPI is the suitor for the plan, and maintained that a closing will be completed over the near term, possibly by the end of this month.
Significant Transformation
If JPI is indeed the buyer, it would be the second Texas-based company to chase after the Channel Center opportunity during the past year. Fellow Lone Star State developer Lincoln Property Co. briefly had the development under agreement last year before retrenching for reasons never explained.
One question regarding JPI is whether the units would be constructed as apartments or as condominiums, with the latter program initially envisioned by Beacon Capital. Primarily active in building rental properties, JPI owns four apartment communities in Massachusetts in Bellingham, Dedham, Lawrence and Marlborough. In the past, however, the firm has pursued condominium opportunities, as well.
The reported sale of the Channel Center development rights comes during a time of significant transformation for the Fort Point Channel area and in the larger Seaport District encompassing the submarket. Along with the convention center, which opened in 2004, a slew of commercial and residential development plans are emerging throughout the area, partly as a result of recent infrastructure improvements such as the new tunnel to Logan International Airport – which cuts through the district – and the cleanup of Boston Harbor. The sale of Boston Wharf Cos.’ massive Fort Point Channel real estate holdings is considered another catalyst for change.
Dating its presence back to the 1800s, Boston Wharf Co. owned the vast majority of the gritty warehouse and industrial buildings that dominated Fort Point Channel until the company began a wholesale disposition program six years ago, an initiative launched by Beacon Capital’s purchase in 2000 of a slew of aging buildings that would ultimately become Channel Center. Subsequently, Boston Wharf has sold off the remaining portion of its holdings to other developers including Berkeley Investments, HDG Mansur and an affiliate of Goldman Sachs, which paid $92 million last year to acquire Boston Wharf’s final holdings in the area.
Having retained ownership for such an extended period, Boston Wharf Co. had not developed the bulk of its Fort Point portfolio, although the firm did construct several parking garages and renovate properties such as 300 A St. into modern office space in recent years. The new owners of the remaining buildings, however, are expected to be considerably more aggressive in converting the structures given the need to generate revenue from their investments. Already, Berkeley has produced an ambitious plan that calls for renovation of many of the 14 buildings it acquired from Boston Wharf in 2004 for $97 million.
Given its track record as one of the nation’s largest multifamily developers, JPI is not expected to sit on the Channel Center project, either, according to industry observers familiar with the company. That is especially true given that JPI already faces nearby competition not only from the new owners of the divested Boston Wharf assets, but also Intercontinental Real Estate Corp., a Brighton developer which last year purchased the rights to build hundreds of apartments on nearby D Street at a site adjacent to the convention center.
