The $145 million sale of Museum Towers in Cambridge was one of the highlights in a stellar year for Cushman & Wakefield.
Talk about a comeback.
After seeing nearly $1 billion in deals fall by the wayside in 2003 and getting passed over to handle the $705 million trade of Boston’s One Lincoln St. that opened 2004, Cushman & Wakefield of Massachusetts roared to the top in commercial real estate investment sales last year, with the firm’s veteran brokerage team negotiating an astounding $2.1 billion of property transactions.
Even with most other local investment shops reporting impressive campaigns in their own right, Cushman & Wakefield’s Capital Markets Group easily eclipsed the competition on the strength of mega-transactions like the $340 million disposition of Boston’s One Beacon St., the $145 million sale of the Museum Towers apartments in Cambridge and a portfolio of suburban office/flex buildings that brought in $157 million for iStar Financial.
“It was a great year,” acknowledged Cushman principal Edward C. Maher Jr.
New England-area President Robert E. Griffin Jr. said that it was the largest number and volume of deals his investment sales group has completed during his 25 years in the business. By itself, that denotes a phenomenal feat, given that Griffin’s team – which worked previously for Trammell Crow and Coldwell Banker – has set the standard for investment sales brokerage in New England for most of the past decade.
Cushman & Wakefield traded nearly 12 million square feet of office, industrial and retail space in 2004, as well as 763 residential units, according to figures provided last week to Banker & Tradesman. The average deal size was about $43 million, while the median size was $19.7 million. The firm pushed 49 transactions across the finish line, with the $2.1 billion total representing the highest equity sales volume ever achieved in a given year, according to Cushman & Wakefield.
Bolstered by the addition of Senior Director Geoffrey Millerd, Cushman & Wakefield traded several prime retail assets last year, including the $109.9 million sale of 350 Washingtion St. in Boston’s Downtown Crossing and the $36.6 million sale of the Rhode Island Mall in Warwick, Rhode Island, both on behalf of Eastern Development of Woburn.
Other retail brokers also posted encouraging results in 2004. At CBRE/Whittier Partners, principals B. William Moylan and Christopher Angelone negotiated the $120 million sale of six grocery-anchored shopping centers in the Boston area to a Florida investor, with CBRE/Whittier peddling close to $300 million of retail properties alone. TRB Assoc. President Thomas R. Blakely helped the owner of the Franklin Village Shopping Center in Franklin sell that asset for $73 million, while veteran retail specialist James M. Koury of Spaulding & Slye Colliers oversaw several significant transactions, among them the $16.5 million sale of Shaw’s Plaza in North Reading and the $26.5 million purchase by Kimco of the Shops on the Pond in Marlborough.
Among local investors chasing such product, Linear Retail Properties was rather busy in 2004. The Burlington-based firm scooped up one prize asset in its hometown after buying the Burlington Marketplace for $10.4 million. Teamed with Principal Financial Group of Iowa, Linear obtained several “convenience-oriented” retail centers in Massachusetts last year to feed a $200 million fund aimed at such properties.
Although Massachusetts continued to see a surge of capital from national and international sources, Bay State real estate investment sources were among the most prolific – and successful – buyers in the area in 2004. Intercontinental Real Estate of Brighton, the Mayo Group of Roxbury, Essex River Ventures of Andover and the Hub-based New Boston Fund were active on both the buying and selling side of the ledger last year, while a new tenant-in-common vehicle launched by Paradigm Properties of Boston purchased 212 Elm St. in Somerville as part of a national investment program. One satisfied seller last year was National Development, which hired Cushman & Wakefield to trade 225 and 235 Presidential Way in Woburn after the Newton-based real estate firm repositioned the buildings by leasing all 435,000 square feet to Raytheon. The outcome was a strong $82 million paid for the suburban properties by a German investor advised by Morgan Stanley.
Widespread Success
As for other brokerage operations, Spaulding & Slye Colliers principal Michael G. Smith expressed general satisfaction with 2004, as his Boston-based firm strung together a series of “singles and doubles” to produce close to $500 million in volume. “We’re very happy with what we’ve done and how we were able to get it done,” said Smith. After starting 2004 with the sale of 1414 Massachusetts Ave. in Cambridge for $42 million, Spaulding & Slye’s team led by Smith, Catherine F. Daume and Jeffrey B. Swartz completed an array of deals, with leading examples including 745 Boylston St. in Boston’s Back Bay and One State St. in the Financial District.
Besides the retail arm, CBRE/Whittier’s investment operation was also busy in 2004. CBRE moved more than $25 billion worth of product nationally. The New England contingent contributed by completing deals such as Lincoln Plaza, a $27.5 million transaction handled by Philip Giunta and Elizabeth Carrillo Thomas; the $10.1 million sale of the Minuteman Village Apartments in Lexington, negotiated by Simon J. Butler and Biria St. John; and the $10.5 million sale of 295 and 305 Foster St. in Littleton to a local investor.
“We were pretty much straight out all year,” said CBRE/Whittier principal Gary J. Lemire, who brokered the Foster Street deals for the firm’s investment team. CBRE/Whittier sold about $500 million of property last year, Lemire estimated.
Trammell Crow completed about two dozen commercial sales totaling between $500 million and $600 million, according to principal James F. McCaffrey.
“We’re feeling good about things,” said McCaffrey.
Along with colleagues Peter Joseph and Chris Phaneuf, McCaffrey’s group completed the $38 million sale of two warehouse buildings in Taunton and another industrial asset in Peabody acquired by Intercontinental for $42 million, as well as the $35 million sale of the Lexington Technology Park in Lexington to Essex and its partner, the Praedium Group. Trammell Crow closed 2004 on a high note, assisting New Boston Fund in its sale of Boston’s 116 Huntington Ave. to Beacon Capital Partners for $77.3 million. In a major user sale early in 2004, Trammell Crow and principal Joseph P. Fallon assisted Boston Scientific in its purchase of the former Lucent Technologies campus in Marlborough, with owners Ian Gillespie and Denison Hall selling that asset for $43 million.
Despite the presence of national companies such as CBRE, Trammell Crow and Cushman & Wakefield, independent real estate firms more than held their own on investment sales last year, as witnessed in the brokerage of several prominent properties by Meredith & Grew Oncor, GVA Thompson Doyle Hennessey & Stevens and NAI Hunneman Commercial Co.
Lisa M. Campoli and David L. Pergola of Meredith & Grew, for example, represented Boston Wharf Co. in its $92 million sale of 10 Boston commercial buildings to HDG Mansur Investment Services, and also helped SSR Realty Advisors sell the troubled 211 Congress St. in Boston to the Mayo Group. Also, Leigh L. Freudenheim of Meredith & Grew brokered the sale of Lovejoy Wharf to Ajax Investment Partners.
GVA Thompson Doyle also had a solid year on investment sales. Principal Debra L. Stevens brokered the $82 million sale of Boston’s 73 Tremont St. to a private investor. Principals Donald M. Hause and John F. Hennessey negotiated one of the city’s largest portfolio sales ever, with Berkeley Investments buying a major piece of Boston Wharf’s South Boston holdings in late 2004 for $97 million. Boston-based Berkeley, which was on its own buying spree last year, acquired 16 office and warehouse buildings from Boston Wharf totaling more than 800,000 square feet, as well as four land parcels and two parking garages.
Lasting Memory of ’04
Despite widespread success across the industry, Cushman & Wakefield’s performance will likely be the lasting memory from the 2004 sales year in Massachusetts. The amount of transactions and the quality of the multiple assets astounded most observers. The outcome is more remarkable given that Cushman & Wakefield carried over some of its largest deals into 2005. Landmark assets such as Riverfront Office Park in Cambridge and the Bay Colony Corporate Center in Waltham were put up for sale last year but did not trade until earlier this month. Maher noted, for example, that the firm has already closed on $500 million of properties in the opening weeks of 2005.
Cushman’s Griffin cited two key factors when assessing recent performance. One is the unprecedented amount of capital chasing commercial real estate. The other is the overall quality of his firm’s investment team. Along with longtime colleagues Maher and principal Marci Griffith Loeber, the Boston operation features 15 professionals, with six senior brokers, two junior brokers and seven analysts and support staff.
“Everybody is extremely dedicated and hard-working,” said Griffin. “I think that really shows through.”
