The Deal Sheet
Two years ago, Skanska USA Commercial Development prez Mats Johansson and his team bet on spec, developing a $70MÂ life science lab/office in East Cambridge.Â Alexandria Real Estate Equitiesâ€™ recent purchase of what's nowÂ 150Â Second Street for $94.5M proves Skanska's hunch was right.Â (It's fun to say "I told you so"... that's why people become parents.)
When Skanska started building the 123k SF building near Kendall Square and MIT, few other developers were building anything, let alone spec. But Mats and Boston-based EVP Shawn Hurley say they were pretty convinced they'd be winners. The life science/biotech industry was on track to recover from the recession faster than other industries in Cambridge, as well as in other places where the Swedish developer has invested: Houston, Seattle, and DC. (If we can't count on banking, we can always bank on our health.)
This fall, bidding among US and European investors--institutional, private, and REITS--was intense and the building sold in three months at 85% occupancy. Mats said he didn't expect such avid investor interest. (Cushman & Wakefield repped Skanska.) The price, $768/SF, was among the highest achieved for any Boston office this year, Real Capital Analytics managing director Dan Fasulo tells us. Nationwide in Q3 '13, the average sale price for life science R&D facilities hit the highest level since Q1 '08 ($237/SF), with the average cap rate down to 6.5%, back to '08 levels. That this building sold for so much more shows how premiere Cambridge is, Dan says.
Health Care REIT paid AEW Capital Management $63.2M for 176 units of seniors housing. AEW bought the two properties (The Inn at Robbins Brook, a 79-unit assisted living and memory care community at 10 Devon Dr in Acton and Forge Hill, a 97-unit facility at 4 Forge Hill Rd in Franklin) in '10 for $19.2M. HFF repped AEW on the sale.
Linden Townhomes, an affiliate of Universal Properties of Newton, paid Eastern Lindwell $25.6M for Linden Square Townhomes, a 64-unit community in Wellesley first built in the '60s. CBRE/NE's Simon Butler and Biria St. John repped the seller, a partnership of Boston Residential Group and Eastern Real Estate, and found the buyer.
Nordblom, in a JV with Network Drive Owner, paid $25.7M for 15 Network Dr in Burlington from Cynosure. This brings the 158-acre campus of Network Drive at Northwest Park under single ownership. The park has seven office buildings, with another 250k SF of offices that can be developed. Cushman & Wakefield repped the seller
Samuels & Associates and Weiner Ventures plan to buy the two-story Howard Johnson hotel at 1271 Boylston St near Fenway Park. Prior plans to raze the 53-year-old Ho Jo Hotel have been suspended. A purchase price for the 49k SF property, now surrounded by ambitious mixed-use developments, hasn't been disclosed.
Georgetown Co, a private New York-based real estate investment and development firm, purchased the fully occupied One Washington St in the Financial District from Saracen AEW Acquisitions for $56.7M. The partners bought the 161k SF office building with 17k SF of ground floor retail at State and Congress streets in '06 for $33.5M and invested $2M in capital improvements.
Grander Capital Partners purchased 700 & 900 Technology Park Dr in Billerica from Campanelli for $7.1M. The Transwestern/RBJ Capital Markets group of Chris Skeffington and Roy Sandeman repped both the buyer and the seller with Campanelli's leasing team of Brian McKenzie, John Wilson, and James Lipscomb.
CONSTRUCTION & DEVELOPMENT
Rumor of the Day: the Menino administration has agreed to the proposal of Boston Properties and Delaware North Cos to build a $1B, mixed-use complex near North Station with a hefty tax break. The project, planned for 1.7M SF, will include: a 20-story hotel, a 25-story office tower, and a 45-story residential building with 500 units and up to 376k SF of retail space.
Washington Grove, a partnership of The Noannet Group, ELV & Associates, and Abbey Road Advisors, broke ground on the $35M Belclare Wellesley, a 30-unit luxury condo project that includes five affordable homes and 9,500 SF of ground floor retail in Wellesley Square. The development will occupy the site in the heart of town where the 146-year-old Wellesley Inn building had been demolished by a previous development group and has been vacant for seven years. Noannet CEO Jordan Warshaw is also developing 40 Trinity in the Back Bay with Gary and Jeff Saunders of the Saunders Hotel Group
New Boston Fund and the Asian Community Development Corp closed on the financing and ground lease for the $170M One Greenway, a 362-unit mixed-income development that will form a new gateway to the Rose Kennedy Greenway. The complex includes the 312-unit North Building and later, the South Building with its 50 affordable condo units. 40% of all units will be affordable.
Two affordable housing developers have received $11.8M in tax-exempt bonds to purchase, renovate, and preserve affordable apartments in Cambridge and Allston. Chapman Arms will buy a 50-unit apartment building in Harvard Square (above), and Brighton-Allston Apartments will buy 60 units of rental housing on two sites in that Boston neighborhood with the proceeds from bonds issued by MassDevelopment.
Partners HealthCare System, the state's largest hospital and physician organization, has agreed to lease 650k SF to 700k SF at the $1.2B Assembly Row mixed-use complex being developed by Federal Realty in Somerville. Partners expects that the move will allow it to consolidate administrative operations from 14 sites in eastern Massachusetts into one location, due for completion in late '16.