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German Firm Enters Boston Market With $48M Medical Office Buy

147 Milk St. in Boston.

The American arm of a German investment firm is entering Boston’s office market with the purchase of a Financial District building.

KanAm Grund America bought the 52K SF, 10-story 147 Milk St. for $47.9M from BentallGreenOak last week, according to Suffolk County public records. The building has been fully leased to Atrius Health for decades, according to a statement from KanAm Grund.

The purchase was made by KanAm Grund’s Leading Cities Invest fund. The medical center is in an attractive location in an office market characterized by high market liquidity and a moderate construction pipeline, among other factors, KanAm Grund said in a statement.

KanAm Grund America’s portfolio spans 27 properties in major metros in the United States and 11 buildings in Canada. The firm’s assets include offices, shopping centers and government buildings

BGO, the investment arm of Canadian insurance giant Sun Life Financial, has more than $50B of assets under management and recently refinanced the massive 740K SF Center Plaza with partner Synergy investments for $375M.

The 147 Milk St. property last changed hands in 2016, when Bentall Kennedy purchased it from Lexington Realty Trust for $33M before Bentall Kennedy merged with GreenOak Real Estate. Newmark, which brokered the deal, didn’t respond to a request for comment.

The Milk Street sale represents another sign of life for Boston’s office market, which endured historic struggles last year. Investments in 2021 include MC Real Estate Partners$27.8M buy of the 76K SF 110 Chauncy St. building near Chinatown and BioMed Realty Group’s acquisition of two sites in the South End for an undisclosed price.

Among major leases this year are Sasaki’s 16-year lease at 110 Chauncy St. and Amazon’s lease for 630K SF of new office space at WS Development’s Seaport site.