New York-based Real Estate Capital Partners has acquired 350 Washington St., a landmark retail building in Boston’s Downtown Crossing district, for $110 million.
Investment sales of commercial real estate show no sign of letting up as the market passes the midyear point, with a New York advisory firm last week buying Boston’s 350 Washington St. retail center and the owner of the Harvard Pilgrim Health Care headquarters in Wellesley reportedly placing that 270,000-square-foot asset up for sale.
Real Estate Capital Partners paid $110 million for the retail building. The longtime home of F.W. Woolworth Co. was renovated in 2000 by Eastern Development LLC of Woburn, which repositioned 350 Washington St. as a multi-level retail property that today features such well-known tenants as H&M, T.J. Maxx and Marshalls.
Meanwhile, in apparent response to a continued surge of capital chasing real estate, the Druker Co. has placed Wellesley Gateway in Wellesley up for sale, sources told Banker & Tradesman. The developer did not return a call regarding the deal by press deadline, but sources insist it is being offered to investors. Well located at the intersection of Routes 9 and 128, the 4-story property includes a ground lease with the commonwealth of Massachusetts, an encumbrance that could affect the number of buyers willing to pursue the property.
Even so, one source predicted that Wellesley Gateway will attract its share of suitors, with the lease to HPHC considered creditworthy enough to make the asset a relatively stable play. “It will be competitive,” one source predicted of the bidding process, adding, “It’s a fantastic building.” The observer estimated that Wellesley Gateway would sell in the $70 million to $75 million range. It is unclear whether Druker has hired a broker to market Wellesley Gateway.
The Druker opportunity is just one of several commercial deals working through the pipeline, with the real estate investment market experiencing one of its busiest stretches ever seen in Massachusetts. Other recent deals include the $58 million sale of the Comverse Networks headquarters in Wakefield, an Indiana company’s purchase of 10 buildings in Boston’s Fort Point Channel district, and last week’s closing of 225 Friend St. and 186 Lincoln St., a pair of Hub office buildings purchased by a partnership of Essex River Ventures and the Praedium Group.
Calls to RECP at its Virginia offices and to Eastern were not returned by press deadline, but an official at CB Richard Ellis/Whittier Partners acknowledged that his firm has been retained to manage 350 Washington St. on behalf of the new owners. CB/Whittier principal Mark Tassinari said his firm has already begun servicing the asset for RECP.
“It’s a great property,” Tassinari said of the 155,000-square-foot building. “It’s ground zero for retail on Washington Street.” RECP took control of the building on behalf of overseas clients, with at least some of the capital said to be coming from Germany.
‘Continued Demand’
Although it did not feature a grocery anchor, as preferred by many retail investors, 350 Washington St. is considered a plum property due to its heft and the market in which it sits, with Downtown Crossing daily servicing tens of thousands of office workers from the adjoining Financial District. Tassinari said the crush of shoppers will become even more acute as a new garage opens within a few weeks that will provide access to the stores for the adjoining 33 Arch St. office tower nearing completion.
In other activity, Essex and Praedium ended months of negotiations to close on 225 Friend St. and 186 Lincoln St., with the former asset located in Boston’s North Station area and the latter in the South Station district. In a release, Praedium Group director Philip Tager said his firm believes both assets will benefit from the completion of the Central Artery depression, with that thoroughfare extending through both submarkets. Essex River President John Fenton was equally upbeat.
“We think this acquisition is an excellent investment for us and our joint venture partner,” said Fenton, whose firm has been actively buying properties in the region during the past year. “Boston has been the center of the nation’s leading financial services firms, technology companies, and educational and health-care institutions,” Fenton explained. “It continues to lead these industries, and therefore, we see continued demand for office space in Boston.”
Totaling more than 127,000 square feet, 225 Friend St. and 186 Lincoln St. were sold by Meridien Investment Management, having separately acquired the two buildings several years ago. The Friend Street structure features 60,000 square feet of space in eight stories and was renovated in 1985. Built in 1904, 186 Lincoln St. was renovated in 1986 into 67,000 square feet of office space.
Gary J. Lemire of CB Richard Ellis/Whittier Partners brokered the sale of the buildings to Praedium and Essex River on behalf of the seller. Praedium and Essex River have previously purchased such buildings as the Great Woods Office Park in Mansfield and a three-building complex in Salem, N.H. The partnership was also negotiating to acquire the Lexington Corporate Center in Lexington, but it is unclear what the status of those discussions is at present.
