This Week's Boston Deal Sheet
If you’ve dreamed of owning a downtown high-rise, this may be your chance. Startup ETRE REITwill soon sell 11.5 million common shares of the State Street Financial Center, One Lincoln St, in a single-building IPO expected to be priced at $15/share.
ETRE has applied to have shares of the 36-story tower on the edge of the Financial District listed on NASDAQ under the trading symbol "ESSF" and intends to use the net proceeds from the offering to acquire an indirect 48.87% interest in the tower completed in '03. Fortis Property Gp, which bought the 1.1M SF high-rise entirely occupied by State Street, for just under $900M in ’06, estimates it’s now worth $1.1B. Sandler O’Neill + Partners, Evercore ISI and Nomura Securities are acting as joint book-running managers for the offering.
It's a unique REIT offering (slated for later in July)and perhaps a new way of trading property, Greg Sichenzia, a founding partner and securities lawyer at SRFF in New York, tells Bisnow. But the risk for investors is that it lacks diversification or other hedge against a market downturn. On the other hand, it may work for a sophisticated investor who understands the market because it offers the benefit of making a targeted investment.
Healthcare Trust of America from Scottsdale, AZ, paid $101.5M to Spaulding & Slye Investments for 670 Albany St, a biomedical research facility near the BioSquare campus of Boston Medical Center and BU Medical Center. Acquisition of the 161k SF asset brings the REIT’s Boston holdings to 844k SF. The Albany Street property is is fully leased to Boston University and Boston Medical Center to house hematology, pathology and infectious disease labs as well as a 300-seat auditorium. JLL’s Frank Petz, Jessica Hughes and Mindy Berman repped the seller.
Pulte Homes has closed on the first phase of the proposed Brookfield Village neighborhood in SouthField, the master planned community being developed on the site of the former South Weymouth Naval Air Station that's been struggling to take off. Earlier this spring, LStar Communities purchased the huge tract from an affiliate of Lennar. The 34-acre Phase 1 of Brookfield Village will have 108 housing units—81 single-family homes and 27 townhouses, ranging from 1,800 to 2,200 SF. The developer expects a two-year build-out.
The Davis Cos and Marcus Partners, developers and owners of Charles River Plaza North, secured $345M from a $245M first mortgage with UBS and a $100M mezz loan with TIAA-CREF to refi an existing loan from 2007. HFF secured the financing led by Riaz Cassum.
Construction & Development
The Hamilton Co initiated a 10-year, $100M plan to build new multifamily housing in the Packard Corner district of Allston. It broke ground Thursday on a six-story, 49k SF building in a parking lot it owns at 40 Malvern St. The 61-year-old company plans to build on its existing property because acquisition prices have gotten too high, says CEO Harold Brown. Hamilton management, led by president Carl Valeri (third on right), includes Harold's son Jameson Brown (far right). Also digging—John Ladt, Mayor Walsh's Neighborhood Liaison, and State Rep. Kevin Honan.
Skanska USA Commercial Development broke ground Thursday on 121 Seaport, a 17-story, 400k SF Class-A office building with two floors of retail in the Seaport District at the corner of Seaport Boulevard and East Service Road. It’s designed to promote innovation, collaboration and productivity while also targeting LEED Platinum. The sustainable design by CBT Architects includes a 40,000-gallon tank rainwater reuse system that aims to reduce its water use by 30% and an efficient chilled-beam mechanical system that further reduces energy use by circulating water rather than air for building cooling.
With $23.7M in city and federal funding, construction started on Connect Historic Boston, to improve and enhance pedestrian and bicycle routes along the Freedom Trail, in Curley Park and between Haymarket Station and Faneuil Hall. The project, slated for completion by December ’17, is being funded by the BRA and a US Department of Transportation Transportation Investment Generating Economic Recovery (TIGER) grant.
National Development did so well selling the 83 condos in its Sepia building—100% pre-sold and slated to open later this year—in its Ink Block complex in the South End that it is planning another, 79-condo project, Siena, the developer announced yesterday. National expects to break ground in ’16 and open in ’17.
Tomorrow, Mayor Walsh will host a party celebrating the beautification of City Hall Plaza with a new "Front Lawn," a 40 foot x 40 foot stretch of astroturf. The lawn will be rolled up in the fall but the City is also seeking ideas for a redesign of the modernist building and sprawling plaza.
The YMCA of Greater Boston is planning $10M in upgrades to its Huntington Avenue and West Roxbury branches. At 316 Huntington Ave, it will replace the parapet and repair the roof. In West Roxbury, it will renovate and expand its building at 1972 Centre St and buy a building at 1980 Centre St that the West Roxbury branch now leases.
Houghton Mifflin Harcourt is doing a relo from the Back Bay to the newly reinvigorated Financial District taking 162k SF at 125 High St, a signature tower owned by Tishman Speyer. In the move planned for early '17, the educational publisher, services and tech company was repped by Cushman & Wakefield’s Gil Dailey. 125 High, part of a three-building complex, is near the Greenway.
Google, which leases 300k SF in Cambridge, is taking another 50k SF in tech central, Kendall Square, from current landlord Boston Properties. Since moving here in ’02, Google has leased space at 1, 3 and 5 Cambridge Center. Boston Properties says that its East Cambridge portfolio is 100% leased and is its strongest US market. The Kendall Square vacancy rate is 2.5%, according to some estimates.
German software maker SAP is taking a 63k SF lease at 15 Wayside Rd in Burlington Office Park II, where it already leases space. This frees SAP to pull up stakes at nearby 3 Van de Graaff Rd, where it has 29k SF. Its landlord at Burlington Office Park II is Piedmont Realty Trust; Gutierrez Co was the developer. CBRE-New England is the leasing agent for both Burlington Office Park II and the Landmark center at Van de Graaff Drive.