| A foreign investment group has agreed to buy two parcels at Seaport Square in South Boston where a $700-million residential and retail development would be built.
Developer Boston Global Investors (BGI) will retain a 5 percent stake in the properties, while its partner Morgan Stanley is selling its ownership interest, Boston Global Investors CEO John Hynes III said.
The 23-acre master-planned development is being built on land stretching from Fort Point Channel to the Seaport World Trade Center. The parcels put under agreement last week, M1 and M2, are located between Congress Street and Seaport Boulevard on the eastern edge of the development.
Hynes declined to give the purchase price but said the buyer is an institutional investor from outside the U.S. BGI is being retained as development partner to help the future owners secure permits from the Boston Redevelopment Authority for 150,000 square feet of retail and 900,000 square feet of residential units. The transaction will close following approvals, which could be complete by the end of the year, Hynes said.
The M1 parcel has been identified in planning documents as the future home of a large retail tenant such as a grocery store, which is considered one of the main commercial voids in the neighborhood.
The residential space would likely be built as condominiums, reflecting the shifting real estate market in downtown Boston and the Seaport, Hynes said. Condo development is starting to rebound following several years in which luxury apartments have been the predominant residential product built in the city.
“There seems to be ample demand in that particular area for for-sale housing,” Hynes said.
The Fallon Co.’s 109-unit Twenty Two Liberty condo tower is expected to open by year’s end on the Fan Pier. Other developers are considering building condos or a mix of rentals and ownership units in proposed projects such as a 22-story residential complex at 399 Congress St.
BGI and Morgan Stanley acquired the entire Seaport Square district in 2006 from News Corp. for $204 million. The master-planned development will contain up to 6.5 million square feet of commercial space and housing, primarily on lots previously used for surface parking.
Ground was broken in November on One Seaport Square, which will contain 832 apartments and 250,000 square feet of retail space on Seaport Boulevard directly south of the John Joseph Moakley U.S. Courthouse. BGI is partnering on that project with Newton-based WS Development, which will own the retail space including Kings nightclub, Equinox health club and Showplace Icon Theatre, and multifamily developer Berkshire Group of Boston.
