Nordic Properties has been in negotiations to purchase 160 North Washington St. in Boston for more than a year.
From a commercial property sale perspective, Ogden Hunnewell acknowledges that his company’s efforts to acquire Boston’s 160 North Washington St. is “one of the longest running plays on Broadway,” but after more than a year in negotiations, the Nordic Properties principal remains bullish that the curtain will soon be closing on the complicated transaction.
“Things are bumping along, certainly not at the pace we’d like, but we do believe we will be able to finish it,” said Hunnewell. “We’re still very excited about it.”
While he would not discuss specifics of the sale, sources said they believe the price has fallen below $20 million for an asset that initially went on the trading block with an asking price of $30 million. If so, that could reflect the recent decline in the office market, as well as slippage of the residential sector. Nordic reportedly would retain a portion of the complex as office space and renovate the remaining space as residential units.
Calls to current owner Martin Hoffman and to Cushman & Wakefield, brokers for the buildings, were not returned by Banker & Tradesman’s press deadline. As for the lengthy sales process, Hunnewell would not detail why it has taken so long, but some sources said the due diligence of the aging assets has been one factor and maintained that the sellers have lagged on completing certain requirements for the sale to take place. Given that many have failed in previous efforts to acquire the building, one broker said Nordic “deserves a prize” for having persevered as long as it has.
Hunnewell did say that his firm is not being held up due to any negotiations with city and state officials, a notion that had been suggested given that the waterfront project will require a range of approvals from several different agencies, as well as a so-called Chapter 91 license mandated for development along the Hub waterfront. Nordic is acquiring the property with no contingencies, a somewhat risky approach that Hunnewell said Nordic is willing to take due to its long-term belief in the asset and the surrounding area. The company has fared particularly well just up the street at its Hood Business Park, with Hunnewell noting the firm has just signed three new leases, including two public companies. “It’s very encouraging,” he said. “There has been a lot of traffic.”
Once the sale is completed, Nordic is committed to pushing ahead, Hunnewell said, with the capital lined up to do the restoration project, while CBT Architects has been retained to do the redesign. There have been informal meetings with the city, said Hunnewell, with a more official presentation in the offing.
‘Real Buzz’
The effort comes at an interesting time for North Station, with landlords still trying to assess the impact the 2004 Democratic National Convention will have on the area, and also contending with the slowdown in the office market. Meanwhile, the addition of residential units to North Station has added another element to the puzzle, with the completion of the mixed-use 226 Causeway St. the latest example of that trend.
Owned by the Intercontinental Cos., the former Stop & Shop bakery will feature nearly 200,000 square feet of office space and 108 luxury apartments on six new floors added to the structure. Sources said the firm is close to signing its first office tenant. Reportedly, Grant Thornton is looking at relocating from nearby 98 North Washington St. to the $90 million building, taking an estimated 35,000 square feet.
Although Intercontinental principal Peter Palandjian declined to discuss the deal, 98 North Washington St. owner Michael Grill confirmed that Grant Thornton will be leaving in the spring. That 24,000 square feet and another 16,000-square-foot space in his building is being offered for lease, said Grill, with his company having retained three brokers from Lincoln Property Co. to market that space. The team consists of Kevin Brown, Anthony Sciacca and Scott Parrish.
Grill, owner of Fairlane Properties, said he is generally encouraged by the leasing traffic in North Station, although he added he had anticipated seeing more migration from the Financial District. The 98 North Washington St. building sports a roster of tenants who previously relocated from the Financial District, including Sail Magazine and the New England Council, but the movement has been slower of late, he said. Given the strong public transit aspect of North Station, Grill said he does believe more tenants will eye North Station in the coming months.
Karyn McFarland, a North Station broker and president of the Downtown North Association, which represents businesses and landlords in the district, said she has been pleasantly surprised by the volume of leasing traffic, particularly during the past several weeks. Richards Barry Joyce & Partners places North Station at a 6.7 percent vacancy at the end of the third quarter, with only the 6.3 percent vacancy rate in Charlestown faring better among Hub office submarkets.
“We’ve been very active with showings,” McFarland said. “It has been nice to see the interest.” Along with movement of tenants within the district, McFarland said she is seeing interest from fringe districts such as South Station and reports a pickup of Financial District tenants recently exploring North Station. Several suburban high-tech firms have also been taking tours, she said, attributing that to the retail and restaurant amenities which have surged into North Station during the past five years. “There’s a real buzz that people like,” she said. “It’s got its own heartbeat.”
McFarland cited Downtown North Association Executive Director Robert O’Brien for helping revitalize North Station during the past decade, and announced a reversal of O’Brien’s plans to leave his longtime post. Although he is still relocating to Philadelphia, O’Brien has agreed to stay on as executive director of Downtown North, McFarland said. Along with regular visits, O’Brien will use the new technologies of fax and e-mail to conduct business, McFarland explained, adding she is “thrilled” by the decision.
“My job as president would have been much tougher,” she said. “We had some very big shoes to fill, so we see this as very good news.”
