Trammell Crow Co.’s latest deals include the just-completed $71 million purchase of the Crosby Corporate Center in Bedford by the RREEF Funds.
As any waterlogged New Englander can attest this year, sometimes when it rains it pours, and that would certainly seem to be the case for Trammell Crow Co.’s commercial real estate sales team, which is marking the halfway point of 2006 with a flood of notable property closings, transactions accounting for more than $100 million of product.
Headlined by the just-completed $71 million purchase of the Crosby Corporate Center in Bedford by the RREEF Funds, Trammell Crow also brokered the pending sale of the Ferncroft Corporate Center in Middleton on behalf of BPG Ltd. (see related story on Page 1), and is orchestrating the pending acquisition of several suburban buildings by Everest Partners for a price estimated in the $25 million range. Owned by Trammell’s client, Berkeley Investments, the package includes 3 Riverside Drive in Andover, 1881 Worcester Road in Framingham and 115 and 117 Flanders Road in Westborough. The Ferncroft deal reportedly is slated to close in mid-July.
While the closings are lumped together, the marketing and negotiation process has been spread out over several months, explained Trammell Crow principal and Capital Markets Group chief James F. McCaffrey, who brokered the latest crop of sales along with principals Peter Joseph and Christopher Phaneuf and Senior Analyst Wyndsor DePetro. The flurry of activity does, however, underscore the robust investment sales environment, McCaffrey said.
“It has been a huge six months for us, and we have even more [properties] in the pipeline,” he said, adding that the unending parade of capital has been eager to accommodate fresh opportunities as soon as they become available. Rising interest rates have failed to keep even leveraged buyers from competing, McCaffrey said, and the improving economy is leading developers and opportunity funds to pursue riskier properties with an eye toward value-added repositioning.
“The general consensus among [buyers] is that rents are going to start moving [up], and it seems like that is already happening in certain markets,” said McCaffrey. Heretofore owned by Equity Office Properties, the highly regarded Crosby Corporate Center has about 30 percent of its 595,000 square feet available, and McCaffrey said he anticipates RREEF moving proactively to fill the space as rents appreciate. Among the biggest suburban property sales in Massachusetts this year, the agreement for the nine-building park also reflects belief in the region, opined McCaffrey, who noted that RREEF has been on a buying spree here for the past few years.
“They are putting a big stake in the ground, and Crosby is going to be the flagship for that portfolio,” said McCaffrey.
‘A Great Fit’
The same could be said of Everest Partners, a New York investment concern which has shown no sign of curbing its appetite for Massachusetts real estate since entering the market in the mid-1990s. Besides 225 Friend St. in Boston’s North Station, which Everest is on the verge of buying from Essex River Ventures, the firm was set to close late last week on the quartet of Berkeley properties. McCaffrey declined comment on that transaction until it is consummated, but observers said it fits Everest’s approach of pursuing properties that can be improved through hands-on leasing and management.
Efforts to contact Everest officials prior to press deadline were unsuccessful, but sources insisted the firm is the buyer of the properties, known as the Ber Tech portfolio. Berkeley has owned the buildings since 1999.
As for the Ferncroft Corporate Center, McCaffrey praised BPG Ltd. for its approach to repositioning that 225,000-square-foot asset. Following that upgrade, the building was stable enough to attract a wide berth of interest, he said. “I think they are going to do well with it,” McCaffrey added of the winning bidder, which he described as being well versed in the Bay State marketplace.
With Trammell Crow’s roster of properties to sell continuing to grow, the firm has just bolstered its investment team via the hiring of Sarah Lagosh, who arrived earlier this month following six years at cross-town competitor Meredith & Grew. The experience should help Trammell as it juggles the expanded assignments arriving daily for the Capital Markets Group, said McCaffrey, himself a Meredith & Grew alumnus who called Lagosh “an emerging superstar” in the industry.
“It’s a great fit for us,” he said. “She’s going to be a real help.” During her years at Meredith & Grew, Lagosh performed financial analyses and traded more than $750 million of properties as a member of the investment sales operation.
