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Shorenstein Grabs Back Bay Trophy for $91M
By Beverly Ford - GlobeSt.com
March 6, 2007 - BOSTON - A trophy Back Bay office building sparked “a feeding frenzy” among investors but it was a $90.8-million offer by San Francisco-based Shorenstein Realty Investors that took home the title. Just 20 months after acquiring the property for $55.5 million, Rockwood Capital Corp and Abbey Road Advisors, both of Boston, walked off with more than $40 million from the sale of the fully leased 13-story, 228,626-sf asset at 399 Boylston St.
“It was a feeding frenzy,” Ed Maher, with Cushman & Wakefield’s Boston office, tells GlobeSt.com, of the strong interest generated from buyers. He says the building’s “nice mix of stability and improvement profile” along with the property’s location just a half-block from the Boston Public Garden were key drawing points for the roughly 20 bidders who placed offers. Shorenstein’s bid, along with the company’s “gold standard” reputation as a deal-closer solidified the transaction, he says.
The acquisition brought Shorenstein back into the Boston market two years after it exited following the sale of the Bay Colony Corporate Center in Waltham.
Matthew Knisely, a vice president with Shorenstein, tells GlobeSt.com that Boston’s strong fundamentals, including a shortage of Back Bay office space and rising rents, prompted the firm to get back into the mix.
“We think Boston is a very compelling market right now with the way rents and vacancies are trending in that city,” Knisely says. “We think over the next five to 10 years, Boylston Street in general is going to see more interest from office tenants and more interest from retail tenants, so we plan to be around for awhile.”
Located less than a block from the Boston Public Gardens and the Boston Common and within walking distance of Copley Square, the building was designed by CBT Architects and developed in 1983 by Copley Real Estate Advisors. The property, which includes about 12,000 sf of retail, is fully leased to 14 tenants, including IXIS Asset Management Group US, which holds a 10-year lease on 41% of the property’s space. Other tenants include menswear retailer Jos. A. Banks, the investment banking firm Consilium Partners and FullArmor Corp., a software provider. Maher says about 40% of those leases extend through 10 years with the remaining leases turning over in the next five to six years.
The transaction was handled by Maher and C&W’s Capital Markets Group, which includes Robert Griffin, Marci Griffith Loeber, Elizabeth Carrillo Thomas and Dave Martel.
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