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The Deal Sheet

Boston Deal Sheet

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‘Tis the season for closings, and the largest suburban sale of 2013 might just be Manulife’s recent $237M purchase from Blackstone/EOP of the 649k SF Wellesley Office Park. (Serious question: would that equal 649k SF of gift wrap?)

The Deal Sheet

In '13, institutional investors have been scrambling to acquire core Boston assets, says HFF's Ben Sayles, who repped Equity Office Properties with Coleman Benedict. Expect continued improvement in leasing and tremendous amounts of capital chasing deals to drive robust sales volume and strong prices in '14, Ben says. Manulife picked up the office park (90% leased), which has never before been sold as a single asset, for $365/SF. It was built by legendary developer Beacon Co founder Norman Leventhal from 1961 through 1984. The tenant roster includes: AXA Equitable Life Insurance, Northwestern Mutual Life, Bank of America Merrill Lynch, Newton-Wellesley Hospital, Wells Fargo, Morgan Stanley, Eagle Investment Systems, Stream Global Services, UBS, and Benchmark Senior Living.

The Deal Sheet

Core Boston suburban assets sold in Q4 are registering "amazing prices," RCA managing director Dan Fasulo tells us. But the other five major metro areas that RCA follows--NY, Chicago, LA, San Fran, and DC--have seen average sales prices for large suburban office properties remain 26% lower than during the prior peak in Q4 '07. (Makes sense: no suburbanite in DC trusts their neighbor after The Americans premiered.) Last month, Griffith Properties purchased Burlington Woods in that fast-growing town for $61M from The Davis Cos, which purchased it for $32M in Q2 '10. Why the frenzy? Offerings on the market are scant, there's strong job growth in life science and R&D, and many tenants are being priced out of downtown Boston. But for these escalating prices to work, buyers have to bet on rent growth. Dan feels we're getting close to silly season.

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Sales

RelatedBeal paid $90M to Fidelity Investments for the four office buildings known as the Fidelity Block in the Financial District. The 343k SF package includes: 82 Devonshire St/35 Congress St; 68 Devonshire St; 15 Congress St; 19 Congress St; and a 2,116 SF lot at 54 Devonshire St. The property has a total assessed value of about $50M. CBRE's Andy Hoar helped broker the deal.

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The Deal Sheet

To boost development of the $3.5B, 6.3M SF Seaport Square, the master developer--Boston Global Investors and Morgan Stanley--have partnered in a JV with Berkshire Group to purchase a three-acre parcel of their Seaport Square site for $72M. The city recently approved construction on the site of two 22-story towers with 832 luxury apartments and 260k SF of retail space that WS Development will develop, own, and manage. This deal replaces AvalonBay, which pulled out as developer of a similar project last year.

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AvalonBay purchased a312-unit apartment community located in Burlington. A partnership advised by AEW Capital Management sold the apartment community. CBRE/NE's Simon Butler and Biria St John repped the seller and found the buyer.

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Steve Catalano paid MassDevelopment $120k for a three-acre Devens site and the former Hodges Theater. He plans to raze the building to build space for his catering company, Dolce Brands. He'll also lease space there to other businesses, including New England Studios, a new film and television production facility at Devens.

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Paul V. Profeta has purchased a 133k SF Home Depot on 27-acres in Bridgewater for about $24M from Gvest Partners. The purchase closed as part of a 1031 Exchange following the sale of 12 Walgreens properties by Profeta to Inland Real Estate Acquisitions for $60M in August. Profeta is planning additional real estate acquisitions to cover the remainder of the Walgreens disposition.

Construction & Development

Hats off to The Fallon Co. Yesterday, they pulled the C of O for the $900M, 1.1M SF Vertex complex. When it started construction in '11, it was the largest private project in the nation and, basically, the only game in town. It helped spark the rush of many other tenants and developers into the now cool Seaport District.

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On Friday, Samuels & Associates broke ground on the $150M mixed-use project at Barry's Corner on 2.7 acres of Harvard's expanding Allston campus. It will include two buildings with 325 rental apartments, residential amenities, 35k SF of ground-floor retail and parking.

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Also on Friday, Starwood Hotels & Resorts debuted the state of Maine's first Westin brand hotel in Portland: the Westin Portland Harborview. The $50M restoration and renovation of the former Eastland Hotel in the heart of the city's Arts District is owned by Rockbridge and managed by New Castle Hotels & Resorts.

Leasing

ImmunoGen is expanding its Waltham HQ by about 20% starting next summer as it continues to add to its 300-person staff. It has signed up for another 19k SF at 830 Winter St.

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Injured Workers Pharmacy is expanding by 21k SF in Andover for a total of 66k SF.

The Deal Sheet

Assignments

Cushman & Wakefield appears to have nabbed the assignment to sell 225 Franklin St downtown for Blackstone/EOP as the New York-based firm harvests the portfolio it purchased from EOP in '07. The tower on the corners of Franklin, Pearl and Oliver streets once called the State Street building, has 916k SF of Class-A office space. Its major tenants include BofA (200k SF) and Columbia Management Investment (156k SF).

People

CBT Architects has promoted Jacqueline McGee, a 20-year design industry veteran, to principal after a decade at the firm. Prior to her promotion, McGee served as the senior interior designer. Her promotion reflects CBT's continuing expansion of its hospitality and high-end residential division. Under her guidance, CBT completed award-winning projects such as the Boston Langham and Hotel Indigo.