REIT-Managed OZ Fund Pays $48M For Somerville Site, Plans Life Sciences Building
In addition to the land, which was acquired from a group of undisclosed sellers, the fund purchased a leasehold interest in an adjacent, 252-space parking garage. Columbia, which trades on the New York Stock Exchange under the ticker symbol CXP, plans to develop a life sciences building on the combined parcels, which are at 64 and 68 Webster Ave., 495, 497, 513 and 517 Columbia St. and 6 Beach Ave., with the garage at 481 Columbia.
The brokerage also arranged $24M in acquisition financing for the purchase from the Bank of New England. JLL said CXP intends to build a life sciences facility at the site near the incoming MBTA Green Line Union Square station slated to be completed next winter.
A representative for CXP confirmed the sale closed last week but declined to comment further.
Boynton Gateway sits just over a mile away from Kendall Square, the life sciences hub where office vacancies sit at 3.2%, according to Cushman & Wakefield’s Q3 2020 office report. The sellers and the owner of the garage were not disclosed by JLL, but public records show five different trusts own the various sites.
The assets were purchased by the Normandy Opportunity Zone Fund LP, a fund advised by Columbia Real Estate Management. CXP closed on the purchase of Normandy Real Estate Partners earlier this year in a $100M cash and stock deal, and it took control of the management in the QOF, as well as its 2% equity stake in the fund. Bisnow previously reported the fund was targeting a $250M capital raise.
The opportunity zone program, which allows investors in QOFs to bypass capital gains taxes if the funds improve or develop assets in designated census tracts and hold them for 10 years, has come under scrutiny for hastening gentrification and not helping the areas that need it. Not only could the investors in Normandy QOF see their capital gains go untaxed if they hold the investment for the next decade, but any company that moves to the development could see its own tax benefit from the opportunity zone program — assuming it lives on, which is not guaranteed.