Commercial Real Estate Investment Yearbook

G LO BA L CACHET THE REAL

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®

THE ANNUAL INVESTMENT YEARBOOK

BACK BAY

Bonanza 3 AGENTS OF

Change 3 SAME AS IT

Ever Was 4

INDEPENDENTS’

Days 4

CBRE/NE’S

$10B Mien 10

Carroll Explains

Everything PTK 60

Industrial

Revolution Rocks 12

Private Equity:

In, Up and Away

20

A sincere

Thank You Newmark’s Boston

Capital Markets Group

Would like to Thank

Our Clients We are excited to work with you in

2016!

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THE ANNUAL REVIEW 3

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A Super-Sized Season at Eastdil

BY JOE CLEMENTS OSTON — In a year where Eastdil Secured was again a powerhouse across the land, the brokerage giant’s regional entry more than held their own in 2015, JAMES MCCAFFREY the group recognized for selling two Back Bay of-

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BROKERS

PETER JOSEPH

SARAH LAGOSH

fice buildings whose $1.3 billion result turned heads globally, part of a dozen equity sales and one massive recapitalization involving domestic and Australian monies placed on landmark office tower 75 State St. in the Hub’s Financial District. Combined with the structured finance activity, Eastdil’s Boston contingent generated over $3.6 billion in volume for the year.

The trade of 222 Berkeley St. and 500 Boylston St.—totaling 1.28 million sf of premier office space—set a first for New England CRE upon yielding $1,015 per sf for client Blackstone Group after Eastdil procured J.P. Morgan and Oxford Properties in a joint venture. Working on the assignment that easily earned them Top 2015 Investment Sale Award from the Greater Boston Real Estate Board were principals Brian Bar- 222 BERKELEY ST., LEFT, AND 500 BOYLSTON ST., BOSTON MA nett, Peter Joseph, Sarah Lagosh, James McCaf- debt expert there in James Cristofori (see story, frey, Molly Padien-Havens, Steffen Panzone and structured finance section.)

Christopher Phaneuf.

As part of company policy, Eastdil profesCarlos Febres-Mazzei and Alex Bradley came sionals do not discuss specific transactions, on board Eastdil in Aug. 2015, joining another continued on page 78

A Leap Year Like No Other

BY JOE CLEMENTS OSTON—Tornadic personnel changes rolling across the region’s commercial real estate brokerage landscape in 2015 have yet to ease this season, with new waves continuing in the wake of CBRE’s crack retail team departing for JLL last summer followed by the Cushman & Wakefield/DTZ union last autumn, that BROKERS amalgam obliterating the latter brand’s presence in Boston while forging a mountain from a molehill at Newmark Grubb which gleefully welcomed the Robert E. Griffin Jr. contingent and their $40 billion Capital Markets legacy (see story, pg. 56).

The former haunt of Griffin and six dozen colleagues who went with C&W’s erstwhile US Head of Investments responded this spring in hiring a Tier One player, Eastdil Secured principal Peter Joseph, and the firm then brought over two Joseph colleagues in Brian Barnett and Steffen Panzone to relaunch that program, an effort paying immediate dividends as seen in the pending

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CHRIS ANGELONE

WHITNEY E. GALLIVAN JOSEPH FLAHERTY

sale of MotorMart Garage in Boston’s Back Bay, a nine-figure listing the Joseph team landed almost immediately after their arrival. They already have picked a winning bidder in CIM Group, a California investor said to be paying over $160 million for the hulking 1,037-stall garage that also features 50,000 sf of fully leased retail, a selection first detailed by therealreporter.com.

“We couldn’t be happier,” C&W Boston leader Joseph Fallon told Real Reporter in announcing Joseph’s designation that came just prior to Barnett and Panzone ending their stint at a firm which in May 2015 lost key principal Christopher Phaneuf to HFF where he is now

DAVID DOUVADJIAN CHRIS PHANEUF

Managing Director working on multifamily deals paired with Mark Campbell, a colleague Phaneuf calls “super, super sharp.” They were part of a unit that produced over $1.5 billion in debt, equity and joint venture volume related to multifamily.

Besides hiring CBRE debt and structured finance brokers Carlos Febres-Mazzei and Alex Bradley last summer, Eastdil Secured has retained principals Sarah Lagosh and James McCaffrey on a team which opened the Boston office in 2007 and created a New England powerhouse that became chief rival to the Griffin machine. And continued on page 76

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Griffin Team in Familiar Territory ROBERT E. GRIFFIN JR EDWARD C. MAHER JR. MATTHEW E. PULLEN

BY JOE CLEMENTS OSTON — Drama unfolded last summer after Cushman & Wakefield merged with DTZ and upstart rival Newmark Grubb made a pitch for C&W’s prized Capital Markets team, but while they did ultimately swap flags via a BROKERS head-twisting move in late September, the contingent led by Robert E. Griffin Jr., Edward C. Maher Jr. and Matthew E. Pullen finished 2015 right where they usually wind up: perched on top of the heap for New England CRE sales. The crew which was joined by dozens of other C&W professionals making the switch to Newmark (see story this section) negotiated in excess of $6.0 billion this past year involving 89 closings—a $67.4 million average—and what Griffin notes was a widely dispersed book of business.

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continued on page 80 ONE CHANNEL CENTER, BOSTON MA

Independents Rise With High CRE Tide PHILIP K. BURGESS

NEIL DENENBERG

BY MIKE HOBAN OSTON — National commercial brokerage franchises in Greater Boston had another exceptional year in 2015, but the re-

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BROKERS gion’s independent firms also feasted on their fair share of the property sales pie. The mostly suburban, privately owned firms nearly uniformly reported their respective “best ever” years, with many anticipating an even bigger sales 445 WILLARD ST., QUINCY MA year in 2016.

GARRY HOLMES

JASON S. WEISSMAN

“If you’re not loving life right now, you’re in trouble,” muses Garry Holmes, President of R.W. Holmes, the Wayland-based firm now celebrating its 40th year in business. “Whether it’s on the leasing or sales side, there’s just great activity out there.” Holmes says much of the latter business is being driven by a trend towards owner occupancy, which has been popular on the West Coast for some time but has only gained traction in the Northeast in recent years. “I think for a lot of these continued on page 86

Thank You For A Successful 2015 $3.85 Billion of Boston Transaction Volume hfflp.com

R E P R E S E N TAT I V E C L O S E D T R A N S A C T I O N S

Charles River Plaza North

319 A Street

116 Huntington Avenue

The Batch Yard

354,594 SF Biotech Fixed-rate Financing Boston, MA

48 Condominium Units Condominium Conversion Boston, MA

274,218 SF Office Investment Sale Boston, MA

328 Multi-housing Units Investment Sale Everett, MA

Faneuil Hall

Fort Point Creative Portfolio

Green District Apartments

Boston East

359,297 SF Mixed-use Floating-rate Financing Boston, MA

212,223 SF Office Portfolio Investment Sale Boston, MA

283 Multi-housing Units Fixed-rate Financing Boston, MA

200 Multi-housing Units Equity/Construction Financing Boston, MA

Marriott Burlington

Hotel Indigo

265 Franklin Street

1025 &1075 Main street

418-key Hotel Investment Sale Burlington, MA

191-key Hotel Floating-rate Financing Newton, MA

350,569 SF Office Partial Interest Sale Boston, MA

303,460 SF Office Fixed-rate Financing Waltham, MA

HFF BOSTON • One Post Office Square, Suite 3500 • Boston, MA 02109 • (617) 338-0990 • hfflp.com ©2016 Holliday Fenoglio Fowler, L.P. (“HFF”) and HFF Securities L.P. (“HFFS”) are owned by HFF, Inc. (NYSE: HF). HFF operates out of 22 offices nationwide and is a leading provider of commercial real estate and capital markets services to the U.S. commercial real estate industry. HFF together with its affiliate HFFS offer clients a fully integrated national capital markets platform including debt placement, investment sales, equity placement, advisory services, loan sales and commercial loan Fenoglio servicing. © 2015 Holliday Fowler,For L.P. more information please visit hfflp.com or follow HFF on Twitter @HFF.

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Price of Success Hits CRE Lenders

BY MIKE HOBAN OSTON — With a white hot Greater Boston investment sales market that saw record pricing across all product types in 2015, it would seem to naturally follow CRE lenders would be among the prime bene-

B DARRYL J. FESS

LENDERS

GERRY NADEAU

CLAUDIA PIPER

ficiaries of all that activity.

But as Isaac Newton once observed, for every action there is an equal and opposite reaction. So while the region’s lenders report that 2015 deal volume typically exceeded that of the previous year, early payoffs by investors harvesting assets ahead of schedule took its toll on their balance sheets.

“Because of the fact that prices were up and cap

CAMBRIDGE SAVINGS BANK WAS AN ACTIVE LENDER ON METRO BOSTON MULTIFAMILY THIS PAST YEAR, PROVIDING $37.2 MILLION IN CONSTRUCTION FINANCING TO QUINCY MUTUAL LIFE INSURANCE CO. AND GATE RESIDENTIAL PROPERTIES FOR A 169-UNIT LUXURY APARTMENT COMPLEX IN QUINCY CENTER, A VENTURE KNOWN AS WEST OF CHESTNUT.

rates were down, a lot of institutional money was coming into the (market), buying properties while looking for less of an immediate return – with some of those buildings being sold with unsolic-

ited offers,” recounts Nicholas K. Moise, Senior VP of commercial real estate for Eastern Bank.

“We fought tooth and nail trying to keep some continued on page 88

Multifamily Debt Flowing Freely

BY MIKE HOBAN OSTON — With interest rates remaining in place, vacancy rates plummeting to a 30-year low and rents continuing to climb both locally and nationally, 2015 was another blistering year for multifamily mortgage providers. Unlike 2014, where mortgage originations began slowly before ramping up after Q1, loan

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LENDERS production came out of the gate fast and momentum GEMMA GELDMACHER continued through the end of 2015. According to the Mortgage Bankers Association (MBA), lenders originated approximately $256 billion in loans for multifamily properties in 2015, a 31 percent increase over a very ANDREW GNAZZO robust 2014 ($195 billion).

WALKER & DUNLOP DELIVERED $94.2 MILLION IN FANNIE MAE FUNDING TO MESIROW FINANCIAL USED TO BUY THE 328-UNIT BATCH YARD APARTMENTS IN EVERETT DURING 2015, THAT $145 MILLION SALE BROKERED BY HFF.

The appetite for multifamily financing was so ravenous early on that the government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac feared they would hit their $30-billion

annual caps for market rate properties by the third quarter. In response, the agencies tightened lending standards and raised their rates continued on page 92

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$2.5B in 2015 Debt Puts HFF First

BY JOE CLEMENTS OSTON — HFF’s New England debt and structured finance team led all rivals last year in loan proceeds delivered across the region. It’s what they do.

“We had a very active and successful year,” acknowledges Senior Managing Director Riaz A. Cassum, co-leader of the multi-faceted Boston operation who pegs the final debt and structured finance production for 2015 at $2.5 billion, not quite the $3.0 billion single-season BROKERS record HFF previously recorded during his career at the mortgage banking firm where Cassum has completed over $15 billion in transactions, but still a bountiful campaign he reports was aided by New England’s robust economy, a lineup of credit-worthy borrowers pursuing varied endeavors from ground-up construction and value-add gambits to the purchase and refinancing of core and top-rated assets, the inventory funded including hotels, industrial, office and retail, with a particular predeliction for multifamily, that a seemingly perennial favorite and one that again rose to the top

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continued on page 96

HEATHER BROWN

RIAZ A. CASSUM

CARLOS FEBRES MAZZEI KYLE JUSZCZYSZYN 75 STATE ST., BOSTON MA

Nine-Figure CRE Sales Add Up COLEMAN BENEDICT DOUG JACOBY

JESSICA HUGHES

BY JOE CLEMENTS OSTON — It appears the predicted end of mega-deals in commercial real estate here has been delayed a bit—or perhaps

this spring in Skanska USA’s stealth-like $452 million trade of 101 Seaport Blvd. in Fort Point Channel to a German fund, a deal negotiated by the Robert E. Griffin Jr. team at Newmark that set a New England record of $1,027 per sf as first unveiled by therealreporter.com.

The disposition drew global attention and is reflective of unprecedented changes taking place this decade in a district where institutional capital was loathe to tread until very recently, rents in dozens of repositioned warehouses

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BROKERS the steady stream of such activity could continue even longer given the legion of cranes marking where gleaming buildings of every ilk are rising against the rapidly growing skyline. Buildings already ripe for the plucking are garnering immediate attention as evidenced 131 DARTMOUTH ST., BOSTON MA

FRANK F. PETZ

continued on page 100

THANK YOU TO THE BROKERS WITH WHOM WE TRANSACTED WITH IN 2015.

WE LOOK FORWARD TO SHARING MANY FUTURE SUCCESSES TOGETHER. The Grossman Companies, Inc. Innovations In Real Estate

“Blessed are the matchmakers.

For they shall be called Real Estate Agents.”

– Mort Grossman, 1988

Waldman & Associates

859 Willard St #501, Quincy, MA 02169 (617) 472-2000 www.grossmanco.com

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Butler, St. John Top $10B in Sales

BY JOE CLEMENTS OSTON — The 2015 numbers for CBRE/NE’s multifamily team led by Simon J. Butler and Biria St. John were as gaudy as ever: three single-asset sales topped $100 million and 15 eclipsed $50 million out of 35 exclusives covering 6,586 units harvested from New England to the West Coast. Yet the bigger story is in a pair of metric milestones, one the duo’s record campaign when $1.52 billion was achieved in 2015 for MULTIFAMILY grateful CBRE/NE clients, and the even bigger achievement came when Butler and St. John crested $10 billion in deal volume SIMON J. BUTLER for a union now celebrating 15 years where 73,500 units have been brokered.

During that time, the pair has annually outpaced regional competitors for as long as anyone can remember—including Butler, who pondered that inquiry a few minutes in a recent interview before pleading ignorance as to when they last were not in first on equity sales volume. “It has been a while” was all he could muster, although he later guessed the first time would BIRIA ST. JOHN have occurred in 2005, the first year they crested $1 billion while at CBRE/NE where they worked until 2006 before joining Cushman & Wakefield and remaining there as part of the Robert E. Griffin Jr. Capital Markets group until being lured back to their current home in 2012.

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continued on page 106 315 ON A STREET, BOSTON MA

A Big Year (Again) for Multifamily JENNIFER ATHAS

MICHAEL BYRNE

BY JOE CLEMENTS AMBRIDGE — Much to the chagrin of their so-called competition, Simon J. Butler and Biria St. John did not announce

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MULTIFAMILY they will be retiring at the end of the 2016 investment sales season, even though they would be assured of going out on top as the Northeast’s most prolific multifamily sales brokerage, in 2015 posting Hall-of-Fame numbers for both the year (a personal best $1.5 ATMARK, CAMBRIDGE MA

MICHAEL COYNE

TRAVIS D’AMATO

billion), and their entire partnership which began at the dawn of the new millennium (see story above).

And lest a rival is thinking of trying to woo the pair ala the talent-stealing path so prevalent these days, Butler offers words of advice on that matter—“We’re not going anywhere,” he says, disappointing news to any brokerage firm except their own, the venerable CBRE/New England operation where they have been the previous three campaigns after a lengthy continued on page 108

EASTDIL SECURED thanks our clients for their continued

confidence and support resulting in the completion of over 55 recent Boston capital market transactions totaling in excess of $16 billion.

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Industrial Revolution Rocks CRE

BY JAY FITZGERALD OSTON — For decades, Greater Boston was not considered an especially attractive industrial property market for large companies and institutional invesCATHERINE MINNERLY tors, partly because of the steady decline in Northeast

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INDUSTRIAL

OVAR OSVOLD

STEVE CLANCY

manufacturing and a correlating drop in demand for industrial properties.

But the past 18 months have proven that industrial properties in Massachusetts are definitely back in favor among investors, in many ways thanks to a vast increase in e-commerce boosting demand for “urban” warehouse and distribution facili-

275 JOHN HANCOCK RD., TAUNTON MA

ties enabling rapid delivery of goods to a demanding consumer. The emergence of so-called “advanced manufacturing” has also increased the sector’s strength in stark contrast to the beating such assets took after the 2008 recession.

“It has brought Boston industrial properties back into the sights of institutional investors,” says JLL New England Capital Markets Managing Director Frank F. Petz.

“Ultimately, the big drivers are e-commerce and related companies. It’s all about being closer to the urban areas, closer to the rooftops, as they say. It’s all about fast, immediate shipping.”

One need look no further than Amazon. com’s moves recently to understand how big a player the Internet is having on delivery of goods and ultimately the region’s industricontinued on page 115

Industrial Lights Burning Bright SCOTT DRAGOS

JEFF BLACK

BY JOE CLEMENTS OSTON — Colliers International was among the most prolific industrial CRE brokers of 2015, headlined by their $27.4

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INDUSTRIAL million sale of five buildings totaling 400,000 sf from Auburn to Tewksbury purchased by Albany Road Real Estate Partners and a three-building exclusive of 295,000 sf in Wilmington landed 500 COMMANDER SHEA BLVD., QUINCY MA

by Novaya Real Estate Partners for $24.5 mil- las Jacoby, Anthony Hayes and Timothy Mulhall lion. All told, the team of Scott Dragos, Doug- processed 1.9 million sf of flex and industrial

ROBERT BORDEN

WILLIAM BAILEY

sales in 2015 involving 18 buildings and yielding $122 million.

Interestingly, however, a non-descript, single-story industrial building at Bunker Hill Business Center in Boston’s Charlestown neighborhood garnered the most attention among bidders, ultimately fetching $14.7 million—$278 per sf—in its purchase by Center Court Properties, a New Yorkbased investor paying big money on urban Boston real estate, including 95 Berkeley St. in the South End acquired this continued on page 118

JLL Capital Markets: $4.5B

Thanks our clients for helping the Boston area team to achieve a record-breaking 2015.

131 DARTMOUTH STREET Boston, MA $315,000,000 Sale – Office

NORTHPOINT East Cambridge, MA $295,000,000 Sale – Land, Mixed-Use Development

745 ATLANTIC AVENUE Boston, MA $114,500,000 Sale / Financing – Office

GATEHOUSE 75 Charlestown, MA $54,125,000 Sale – Multifamily

PROSPECT HILL OFFICE PARK Waltham, MA $101,000,000 Sale /Financing – Office

ARCHER / DONAHUE Boston, MA $43,500,000 Sale/Financing – Mixed-Use Development

125 SUMMER ST / 745 ATLANTIC AVE Boston, MA $392,000,000 Recapitalization – Office

18 TREMONT STREET Boston, MA $77,500,000 Sale /Financing – Office

670 ALBANY STREET Boston, MA $101,500,000 Sale – Lab

BRAINTREE/NEW ENGLAND REHABILITATION

Braintree, MA $114,500,000 Sale – Healthcare

ONE MILK STREET Boston, MA $18,250,000 Sale – Office / Retail

CITY PLACE Hartford, CT $113,300,000 Sale /Financing – Office

VINNIN SQUARE APARTMENTS Salem, MA $36,000,000 Sale – Multifamily

BALLARDVALE OFFICE PARK Wilmington, MA $76,600,000 Recapitalization – Office

2 & 10 CANAL PARK Cambridge, MA Confidential Debt Placement – Office

230 CONGRESS STREET Boston, MA $77,000,000 Sale /Financing – Office

480 SPRAGUE STREET Dedham, MA $15,400,000 Sale /Financing – Industrial

500 COMMANDER SHEA BOULEVARD Quincy, MA $31,000,000 Sale – Industrial

100 QUANNAPOWITT PARKWAY Reading, MA $31,050,000 Sale / Financing – Office

FAIRHAVEN RESIDENTIAL GARDENS Concord, MA Confidential Recapitalization – Multifamily

Representative Transactions

+1 617 531 4100 • JLLBostonCapitalMarkets@am.jll.com

JLL Capital Markets

Built for Clients

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Investors Keep Checking Out Retail NAT HEALD

JAMES KOURY

GEOFF MILLERD

JUSTIN SMITH

were again among the top producers in the New England region that registered $1.28 billion worth of retail property closings in 2015. That figure was down slightly (8.3 percent) from RETAIL SOUTH SHORE PLAZA WAS ACQUIRED IN EARLY 2015 BY BIERBRIER DEVEL- the $1.4 billion in 2014, according to coming off a record 2014, but an OPMENT CO. FROM CARPENTER & CO. IN A $41.5M DEAL BROKERED BY HFF. Real Capital Analytics, which tracks retail transactions greater than $2.5 milequally compelling story dominating that realm during the year—and continuing into Tremblay of Marcus and Millichap announced lion for a given market. And while the deal vol2016—came from three of Boston’s premier they were striking out on their own to form Hor- ume for 2015 proved impressive, some brokers Capital Markets retail teams jumping to new vath & Tremblay in February (see related story, report there has been a softening of activity due firms. Last summer saw CBRE/NE’s Chris Ange- this section). The three shifting operations typ- to a lack of available assets in core locations lone, William Moylan and their cadre of experts ically each generate annual results counted in and the shrinking number of investors chasing product—particularly the public REITs. sign on with JLL; Geoff Millerd and company the hundreds of millions of dollars.

Regardless of whose shingle they are work“2015 was an active year in the retail capijoin a mass exodus from Cushman & Wakefield to Newmark Grubb in September; and more re- ing on behalf of, those brokerage teams (as well tal markets, but when you really drill down into continued on page 120 cently, net-lease pros Robert Horvath and Todd as HFF Senior Managing Director Jim Koury)

BY MIKE HOBAN OSTON — Retail investment sales in Greater Boston enjoyed another banner season

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$98.5M Year for Drinkwater, Richard

BY JOE CLEMENTS YNN — Marcus & Millichap brokerage experts L.A. Drinkwater in Boston and Manhattan’s Seth Richard were all over the map in 2015, or at least a good part of it, with transactions completed from Maine to Ohio and 13 other states as they got 16 separate deals over the finish line for

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RETAIL $98.5 million in deal volume with a concentration on retail transactions.

LAURIE ANN (L.A.) DRINKWATER “It was a good year with a lot of activity,” Drinkwater, CCIM, says in recapping the 2015 season. Eight shopping centers were in the mix, including what is described as “a very complicated grocery anchored portfolio” depenSETH J. RICHARD

CVS PHARMACY, ROUTE ONE, KENNEBUNK MA

dent upon securing a buyer willing to assume above-market debt on the holdings, that effort resulting in an institutional buyer stepping to the fore. Yet another success came repositioning a retail plaza and selling components individually. Along the 2015 journey, the duo interacted with a private international concern and en-

gaged investors from 10 different states, including a large number of net-leased buyers who helped Drinkwater/Richard negotiate a dozen separate drug store dispositions, including four CVS Pharmacy units, among them $10.5 million from the CVS in Lynn at 47 Boston St., in that continued on page 85

Creating greater wealth for our clients by achieving better results.

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Horvath & Tremblay is one of the most active and successful Investment Real Estate Brokerage firms in the United States. Recently recognized by Globe Street and Real Estate Forum as one of the “Top 20 Retail Sales Brokers” in the Industry, our advisors specialize in the sale of single tenant net-lease assets and retail shopping centers. We have experience successfully structuring sale lease-back programs, portfolio dispositions, and 1031 exchanges. We have a dedicated buy side desk that provides real time inventory and market data to each individual client placing capital or fulfilling a 1031 exchange requirement. The firm is dedicated to being the best source of information and expertise in the marketplace for private investors, developers, institutions, and industry professionals.

www.HorvathTremblay.com 600 Market Street – Suite 686 | Lynnfield, MA 01940 Main: 781-776-4000 | Fax: 781-823-0245 | info@horvathtremblay.com

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Horvath, Tremblay Cap $500M 2015

BY MIKE HOBAN YNNFIELD—Before Robert Horvath and Todd Tremblay stunned the Greater Boston CRE community with their stealth launch of a multi-disciplined, namesake brokerage operation in February, the dynamic duo spent 2015 doing what had earned them reputations

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as premier agents selling Access to decision make net-lease assets and retail STOP & SHOP, 932 NORTH MONTELLO ST., BROCKTON MA important we shopping centers in New “The market last year was overall very favor- market. most Certain assets are moving very wellthing right England and beyond: they able to be a seller, and more specifically in our now, but others are taking a little bit longer to Commercial Real Estate team is all about yo closed deals. Over the three space—single tenant net lease and higher-cred- sell,” heOur details, adding, “It’s still a very active creative solutions, make quick decisions, and do w prior years to departing it multi-tenant retail, typically under $25 million market to be selling into, but from a peak standsucceed. It’s all part of making you feel like you’r from mother ship Marcus in deal size—was really active throughout the point I think we’ve already been there and we’re Access to decision makers. The second & Millichap, the team did country, and the 1031 exchange market was starting to feel a little more normalization and a over 550 conclusions for busy as well,” reports Horvath. Yet although correction certain asset classes.” most important thing weonlend.

TODD TREMBLAY an aggregate $1.6 billion he characterizes last year as “very healthy, very Drugstores, long a staple of Horvath and OurWe’re Commercial Real Estate team is all about you. We’re empowered to a find Our Commercial Real team is all about empowered to find in sales—including nearly Estate $640 million in 2014 strong,”you.

Horvath explains that a slight slowdown Tremblay’s practice, are seeing softening in creative solutions, make decisions, do whatever it takes to helpdue youto the Waland nearly $500 million last year— demand and creative solutions, make quick as decisions, whatever it takes toquick help you begando in pricing approximately four months into and pricing, he says, possibly a bit succeed. It’s all part of making you feel like you’re our only customer. for triple-net remained strongyou into feel the like the you’re season, and thatcustomer. easing sales environ- greens-Rite-Aid situation, Horvath ventures, as succeed.

It’s assets all part of making oursays only continued on page 105 opening frames of 2016. ment has persisted into 2016. “It’s a bifurcated ROBERT HORVATH

Access to decision makers. The second most important thing we lend.

Access to decision makers. The second most important thing we lend.

Our Commercial Real Estate team is all about you. We’re empowered to find creative solutions, make quick decisions, and do whatever it takes to help you succeed. It’s all part of making you feel like you’re our only customer.

Cambridge

Our Commercial Real Estate team is all about you. We’re empowered to find creative solutions, make quick decisions, and do whatever it takes to help you succeed. It’s all part of making you feel like you’re our only customer.

Let’s get you started.

Call Daryl Smith at 617.441.4264 or Michael Lindgren at 617.441.4122 Visit cambridgesavings.com/CRE

Let’s get you started.

Call Daryl Smith at 617.441.4264 or Michael Lindgren at 617.441.4122 Visit cambridgesavings.com/CRE

Let’s get you started.

Always you.

KS Partners

owned& managed

2015 Acquisitions

333 ELM STREET 48,500 SF Office��Building �� DEDHAM, MA

85 SCHOOL STREET/165 DEXTER AVE. 43,500 SF Office Building WATERTOWN, MA

59-85 CHAPEL STREET 78,500 SF Office Building NEWTON, MA

59 LOWES WAY/41 WELLMAN STREET 200,000 SF Office Building LOWELL, MA

INVESTMENT | ASSET MANAGEMENT | CONSTRUCTION MANAGEMENT | PROPERTY MANAGEMENT

KS Partners

owned& managed

ACQUISITIONS ROBERT HAWKINS

TODD BARCLAY

978.560.0570

978.560.0569

Senior Vice President

Vice President

THE REAL

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18 T H E A N N U A L R E V I E W

®

Hotel Realm Shows Staying Power JOSHUA BOWMAN

JAMES O’CONNELL

DAVID MCELROY

ROBERT WEBSTER

kets services firm. “All the industry metrics are clicking on all cylinders.” Those metrics include a strong demand combined with a shortage of rooms, high entry costs to build hotels, especially in urban settings, the growing internationHOTELS al popularity of Boston for travelers and investors, a strong overall state and US Then again, maybe there is still a economy, and other factors that have little momentum left over for a simiBOSTON WATERFRONT RENAISSANCE HOTEL, BOSTON MA, SOLD VIA EASTfueled a surge in both overnight-stay larly strong year in 2016. Who knows?

DIL TO ROCKPOINT GROUP FOR $157 MILLION. and hotel sale prices in general.

No matter what unfolds through All of that positive news led to such deals as 2016, hotel industry officials, commercial real ting underway for even more hotel units across estate brokers and other sector players are still the city and metropolitan area, let alone a rash last year’s $140 million purchase of the Mandarin Oriental by Hong Kong-based Mandarin marveling and basking in the success of 2015, a of suburban construction.

“We’ve been very fortunate in Boston,” says Oriental Hotel Group, in what many are calling year that saw eye-popping sale prices for hotels, the opening of thousands of new or renovated Denny Meikleham, managing director at HFF in the richest hotel deal in Boston’s history, with a continued on page 124 rooms across the region, and construction get- Boston, a commercial real estate and capital marBY JAY FITZGERALD OSTON — The Greater Boston hotel industry probably can’t get any better than it did in 2015.

B

HFF Finds Room in Hotel Brokerage

BY JOE CLEMENTS OSTON — Hotel brokers in these parts are a select few, activity on the upper end traditionally shared by such shops as CBRE/NE, Eastdil and JLL, their books of business in 2015 featuring the Ames Hotel in Boston’s Financial District to Invesco, the Boston Waterfront Renaissance Hotel ac-

B

HOTELS quired by Rockpoint Group and the Mandarin Oriental, an ornate centerpiece of DENNY MEIKLEHAM the Back Bay’s emergence this millennium as a globally recognized hotspot. JLL led a process in which the award-winning five-star inn designed by CBT Architects sold for $140 million (see story this section.

Over the past two years, ALAN SUZUKI

BOSTON BURLINGTON MARRIOTT HOTEL, BURLINGTON MA

however, a new rival has emerged on the scene as the HFF Capital Markets team run by Senior Managing Director Coleman Benedict brought on veterans Denny Meikleham and Alan Suzuki to launch a hotel brokerage operation, professionals who like most in the specialized field tend to live in anonymity outside of a sector where they are

all well-regarded. The new unit produced results immediately, in their first full season completing 22 transactions headlined by the marquee sale of a prized site in Boston’s Theater District where hotelier David Leatherwood is building a 233-room inn that will fly the trendy Moxy flag. continued on page 127

Specialization • Expertise • Results

Congratulations to Laurie Ann (L.A.) Drinkwater for being named one of Real Estate Forum’s Top Women in Retail

Marcus & Millichap’s Boston office proudly honors Laurie Ann (L.A.) Drinkwater for being named one of Real Estate Forum’s Top Women in Retail. One of the preeminent retail brokers in the Northeast, L.A. brings more than 30 years of industry experience to Boston’s commercial real estate community. In 2015 alone, L.A. closed 25 transactions valued at more than $139 million. Her commitment to client satisfaction and success has established an unparalleled network of investor relationships. Please join us in congratulating L.A. on her achievements.

To access the largest exclusive inventory of properties, contact the market leader.

Laurie Ann (L.A.) Drinkwater Vice President Investments (617) 896-7230 LaurieAnn.Drinkwater@marcusmillichap.com

Offices Throughout the U.S. and Canada

www.MarcusMillichap.com

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20 T H E A N N U A L R E V I E W

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Private Equity: In, Up and Away

BY JOE CLEMENTS OSTON — When it comes to the legion of private real estate groups vying for all manner of commercial real estate here, there were three general stages evident in 2015 and now holding firm this season: companies just stepping in, those stepping up in profile and volume and the fortuitous roster increasingly stepping away, sniffing at today’s anemic capitalization rates after pioneering gambits PRIVATE EQUITY made in the market nadir DEAN ATKINS from 2009-2012 reaped far greater returns for grateful backers and lenders than those available today.

Brookwood Financial comes to mind in the latter camp, swooping in after the bust (following a 15-year-hiatus regionally) to secure underwater properties in suburban Boston and turn them around into core-plus real estate, among those entries Brookwood Business Center in Billerica, 75 Sylvan St. in Danvers and One Alewife Center in west Cambridge. These days, however, the firm has divested the latter property for an impressive return and is focusing fresh acquisition prospects well beyond its North Shore headquarters in Beverly to deals across the United States. The firm led by Thomas W. Brown, Thomas Trkla and Kurt Zernich has always had a far-reaching footprint, one focused on distressed or value-add opportunities such as those suburban Boston was rife with after the 2008 bust.

“We fix broken buildings, and those are getting difficult to find around here,” Brown told Real Reporter in an earlier interview

B

GREG LAUZE

continued on page 128 68-78 ELM ST., HOPKINTON MA

ROBERT C. KIRSCHNER RICHARD E. PUTPRUSH

POWERING YOUR PROSPERITY Steve Sisson VITA Residential Avid Canine Enthusiast Walker & Dunlop borrower since 2012

Commercial Real Estate Finance www.walkerdunlop.com California loans will be made pursuant to a Finance Lenders Law License from the Department of Business Oversight.

THE REAL

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22 T H E A N N U A L R E V I E W

Better relationships.

Better results.

®

Real Estate Lawyers Riding Busy Times

R E C E N T R E S U LT S W E ’ V E DELIVERED FOR OUR CLIENTS MULTIFAMILY

$54,300,000 PHOTO: DEREK SZABO

FENWAY APARTMENT PORTFOLIO BOSTON, MA | 217 UNITS | LIFE COMPANY

OFFICE

$10,000,000 1 UNIVERSITY AVENUE WESTWOOD, MA | 98,986 SF | LIFE COMPANY

OFFICE

$10,000,000 GATEWAY CENTER NEWTON, MA | 160,000 SF | LIFE COMPANY

Visit northmarq.com/boston or call 617.728.9534

COMMERCIAL RE AL ESTATE DE B T, EQ U I T Y & S E R V I C I N G

BY JAY FITZGERALD here are many ways to measure the strength and vitality of the commercial real estate sector—sale prices, lease activity, occupancy rates, new construction—and the list goes on.

But according to members of metropolitan Boston’s legal community, another key measurement of how the commercial real estate sector is performing ERIC ALLON is how long the due-diligence process takes for any type of transaction. During economic downturns, investors, sellers, bankers, LEGAL landlords and tenants tend to be more cautious about signing deals and more likely to take their time.

During vibrant economic times, like what was seen in the Boston market last year, the due-diligence pace is much faster – and that means much more work in a ROBERT BUCKLEY much shorter time frame for CRE attorneys. “It was a very busy but very productive year,” says Thomas Phillips, chair of the real estate group at Boston’s Brown Rudnick LLP. “Boston is as hot as it has ever been.

There are bidding wars. Things are moving very fast.”

From Boston to Pittsfield, real estate attorneys were kept busy last year with sales, leases, permitting and financing, within all commercial real estate DEBORAH S. HORWITZ classes, including offices, hotels, retail, industrial and multifamily properties.

Deborah S. Horwitz, co-chair of the real estate practice at Boston’s Goulston & Storrs, says her firm has been flooded with work on multiple mixed-used projects, a development trend that started gaining momentum last decade and is now the norm in Boston. “Every day now, our deals seem to have some mixed-use component,” says Horwitz.

T

WILL WILSON

continued on page 73

Macro view.

Micro focus.

One law firm.

The attorneys at Saul Ewing examine legal issues through different lenses, combining big-picture analysis with scrutiny of the finer details.

Getting multiple perspectives from the same law firm gives our clients a singular advantage. www.saul.com DELAWARE MARYLAND MASSACHUSETTS NEW JERSEY NEW YORK PENNSYLVANIA WASHINGTON, DC

RICHARD D. GASS BOSTON OFFICE MANAGING PARTNER SALLY E. MICHAEL BOSTON OFFICE VICE-MANAGING PARTNER

131 Dartmouth Street Suite 501 Boston, MA 02116 617.723.3300

THE REAL

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24 T H E A N N U A L R E V I E W

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Legacy Founder Finds Price Right to Sell CRE

99 WEST CEDAR ST., BOSTON MA

BY MIKE HOBAN ALTHAM — While 2015 may have been cork-popping time for the many sellers who discharged their assets at a premium, it was a period of real frustration for long-term hold investors seeking to add to their portfolios. Legacy Real Estate Ventures President Michael L. Price, whose firm had acquired an assemblage of 17 multi-tenanted flex, healthcare and traditional office properties valued at over $65 million since its founding in January of 2008, is one such investor.

Legacy had traded just one of those assets prior to 2015 – selling controlling interest in eight of nine commercial condominiums located at 260 Boston Post Rd. in Wayland for an aggregate $1.3 million in September 2014 – but he followed up that trade with a second sale to open 2015, a “reluctant’ partMICHAEL L. PRICE ing with 63 Pleasant St. in Watertown, the 21,000-sf historic office building he acquired for $2.61 million in April 2011. Legacy traded the asset (constructed in 1888 and converted from a Catholic school in the late 1980s) to Fenwick Capital and its manager, Richard F. Herlihy, for $3.7 million. Brian R. Doherty and David J. Pergola, previously at DTZ and now with CBRE/NE, negotiated the transaction.

“Pricing was heating up and you have investors that you’re trying to satisfy at different return levels, and I couldn’t find product (to buy) that I felt comfortable with in terms of lease exposure and (other factors), so the light went on and I recognized that it might be time to be on the selling side,” explains Price. The 35-year CRE veteran interrupted his mini selling spree with the $1.5 million purchase of an 11,000-sf medical office building in New Jersey last spring, then completed his third disposition in nine months, harvesting a 30,300-sf flex/industrial building at 6 Merchant St. in Sharon, MA for $2.9 million in a deal with Franchi Merchant Street LLP. Legacy had purchased the building for $2.31 million in 2008.

Following the sales spurt, Price returned his focus to acquiring properties, but with a dearth of suitable product in Greater Boston, he was forced to look elsewhere. A broker whom he had done business with in New Jersey (Legacy acquired a 100,000-sf flex warehouse building

W

Answers, not bull When you have important business and legal questions, you want clear guidance, not hedges or disclaimers. You want definitive answers, not stacks of research. At Bernkopf Goodman, we handle every real estate, business law and litigation challenge with the straightforward, no-nonsense approach our clients expect and deserve.

STRAIGHT TALK

™

Two Seaport Lane | Boston, MA 02210 6 1 7 . 7 9 0 . 3 0 0 0 | w w w. b g - l l p . co m

continued on page 84

2015

$324 MILLION

SNAPSHOT

SALES & FINANCINGS

CAPTAIN PARKER ARMS

31 & 35 SOUTH STREET

119 COLLEGE AVE

Lexington, MA

Brighton, MA

Somerville, MA

Norwood, MA

$31,600,000 | $336,170/unit

$13,673,000 | $427,281/unit

$13,335,000 | $325,243/Unit

$13,200,000 | $142/SF

MULTIFAMILY

MULTIFAMILY

MULTIFAMILY

MEDICAL OFFICE

LYNN PORTFOLIO

CENTRAL SQUARE PORTFOLIO

315 UNIVERSITY AVE

40-60 Lewis Street and 11 & 17 Beach Road, Lynn MA

Cambridge, MA

Westwood, MA

Brookline Village

$8,700,000 | $378,260/unit

$8,000,000 | $266/SF

$7,250,000 | $290,000/unit

MULTIFAMILY / STREET LEVEL RETAIL

OFFICE – SALE / LEASEBACK

MULTIFAMILY WITH STREET LEVEL RETAIL

$11,000,000 | $101,851/unit

825 WASHINGTON STREET

75-87 HARVARD STREET

MULTIFAMILY

1580 VFW PARKWAY

10 ESSEX STREET/579-605 MASS AVE

West Roxbury, MA

Cambridge, MA

Boston, MA

$5,800,000 | $54/SF

$33,320 Loan Amount People’s United Bank - Lender

$28,000,000 Loan Amount People’s United Bank - Lender

Mixed use Office, Street Level Retail (existing) 60,000 SF, and Ground Up 48-unit multifamily development.

Conversion of 90,000 class C office into 27-unit Class A multifamily.

Ground floor and lower levels include 35,000 square feet of existing retail.

RETAIL

17-33 WINTER STREET

Please Contact us for More Information on our Current Investment Offerings DAVID N. ROSS, Executive Vice President 617.457.3392 | dross@naihunneman.com

CARL CHRISTIE, Executive Vice President 617.457.3394 | cchristie@naihunneman.com

ANDREW KAEYER, Executive Vice President 617.457.3400 | akaeyer@naihunneman.com

MARK DOHERTY, Executive Vice President 617.457.3277 | mdoherty@naihunneman.com

ROBERT TITO, Executive Vice President 617.457.3231 | rtito@naihunneman.com

NICK BIONDO, Senior Analyst 617.457.3385 | nbiondo@naihunneman.com

GINA BARROSO, Assistant Vice President 617.457.3261 | gbarroso@naihunneman.com

DAN MCGEE, Assistant Vice President 617.457.3266 | dmcgee@naihunneman.com

IAN MCKINLEY, Financial Analyst 617.457.3404 | imckinley@naihunneman.com

HENRY LIEBER, Assistant Vice President 617.457.3383 | hlieber@naihunneman.com PATRICK GRADY, Associate 617.457.3278 | pgrady@naihunneman.com

303 Congress Street | Boston, MA 02210 | 617.457.3400 | www.NAIHunneman.com

Let Us Be Your Investment Guide.

THE REAL

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26 T H E A N N U A L R E V I E W

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Pizza King Salvatore Lupoli Develops Jobs Creation Plan

THORNDIKE EXCHANGE, 165 THORNDIKE ST., LOWELL MA

L

AWRENCE — Salvatore N. (Sal) Lupoli, the pizza magnate/developer whose firm Lupoli Properties famously transformed 10 dilapidated mill buildings here into the now-flourishing Riverwalk Properties, continued his torrid development pace throughout 2015 and into 2016, with a spate of projects currently underway throughout the Merrimack Valley.

“Most of my projects have a job creation component, especially when they’re located in gateway cities, because that’s what I like to create,” Lupoli says in a Real Reporter interview. “We take these old mill buildings and either renovate them or renovate and add to them. (Many) have a housing component, but they always have a job creation component.”

Utilizing the same dogged perseverence that conSALVATORE N. LUPOLI verted Riverwalk into a 3.6-million-sf LWP campus, (including 200 market rate loft style apartments) Lupoli explains he is hoping for similar results on a smaller scale in another gateway mill city, that venture being the Thorndike Exchange in Lowell. The project at 165 Thorndike St. will create 118 market-rate apartments and 70,000 sf of office/medical space, plus two restaurants and a café at the building historically known as Hood’s Sarsaparilla Laboratory, and which SEAN HERLIHY until recently was home to Comfort Bedding and Furniture and the Thorndike Factory Outlet. The existing 130,000-sf structure, which was built in 1882, will be completely gutted and renovated, a second building will be added, and a pedestrian walkway will be constructed to connect Thorndike Exchange to the adjacent Lowell Regional Transit Authority parking garage.

The project was first envisioned by Lupoli over five years ago, then he spent three years negotiating for the property with the co-owners and an additional two years during which he allowed the factory outlet to remain rent-free before their exit in January of this year. Renovations are currently underway and the permitting process is expected to be completed this summer, with the adaptive reuse portion of the project anticipated to be completed by the spring of 2017. The firm has been pre-leasing both the apartments and the commercial space, Lupoli reports, and he predicts continued on page 95

Among $1.42 Billion in 105 Debt & Equity Transactions Closed in 2015 $67,296,000

$27,100,000

$14,500,000

Construction Loan & Equity

First Mortgage Loan

First Mortgage Loan

600 Harrison Avenue Boston, Massachusetts

201 Broadway Cambridge, Massachusetts

The Roberts Collection Nantucket, Massachusetts

160 Unit Apartment Project

119,200 Sq.Ft. Office Building

4 Inns totaling 59 rooms

The undersigned arranged the financing with

The undersigned arranged the financing with

The undersigned arranged the financing with

Eastern Bank & JP Morgan Investment Management

Thrivent Financial for Lutherans

HarborOne Bank

$6,800,000

$32,760,000

$8,000,000

First Mortgage Loan

First Mortgage Loan

First Mortgage Loan

Lifestyle Place Newton, Massachusetts

Pompano Marketplace Pompano Beach, Florida

2150 Post Road Fairfield, Connecticut

66,000 Sq.Ft. Retail Property

238,800 Sq.Ft. Shopping Center

50,800 Sq.Ft. Office Building

The undersigned arranged the financing with

The undersigned arranged the financing with

OneAmerica

AIG Asset Management (U.S.), LLC

Sentinel Asset Management, Inc.

$24,850,000

$12,200,000

$58,091,000

The undersigned arranged the financing with

First Mortgage Loan & Equity

First Mortgage Loan

First Mortgage Loan & Equity

Rumford Center Rumford, Rhode Island

Crossroads Center Bellingham, Massachusetts

Front + Center Worcester, Massachusetts

157,000 Sq.Ft. Mixed-Use Property

130,000 Sq.Ft. Shopping Center

481,000 Sq.Ft. Mixed Use Project

The undersigned arranged the financing with

The undersigned arranged the financing with

The undersigned arranged the financing with

Thrivent Financial for Lutherans & Private Investors

Nationwide Life Insurance Company

Wells Fargo Bank, NA & Great Point Investors, LLC

$28,300,000

$115,500,000

$29,300,000

First Mortgage Loans

First Mortgage Loan

First Mortgage Loan

Windbrook & Inwood Business Parks Rocky Hill, Connecticut

1111 Marcus Avenue Lake Success, New York

Sands Portfolio Massachusetts & New Hampshire

328,950 Sq.Ft. Industrial Portfolio

734,100 Sq.Ft. Medical Office

207,500 Sq.Ft. Office Portfolio

The undersigned arranged the financing with

The undersigned arranged the financing with

The undersigned arranged the financing with

JP Morgan Chase Bank, NA

Prudential Life Insurance Company

East Boston Savings Bank

Goedecke & Co.,

10 High Street Boston, MA 02110

www.goedeckeco.com

LLC

1720 Post Road East Westport, CT 06880

THE REAL

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Paradigm Shift Lifts Hartford

BY JAY FITZGERALD ARTFORD, CT — Connecticut’s commercial real estate market benefited from an improving economy that spurred some spectacular office-sale deals last CHRISTOPHER OSTOP year in downtown Hartford and generated solid activity in New Haven.

H

CONNECTICUT

JOHN CALDWELL

KEVIN MCCALL

Still, the Nutmeg State took a major blow when General Electric announced it is moving its headquarters from Connecticut to Massachusetts, specifically to Boston’s booming Seaport District. In addition, Connecticut continues to suffer from a spotty real estate market where some areas, such as the affluent Fairfield County, are doing

PARADIGM PROPERTIES PAID $113 MILLION LAST AUTUMN FOR CITYPLACE 1, AKA 185 ASYLUM ST., A PREMIER 38-STORY OFFICE TOWER IN HARTFORD IN A DEAL NEGOTIATED BY JLL.

far better than other regions of the state, according to industry officials.

“Connecticut is a tale of two states,” says Jacob M. Grossman, co-president of Quin-

cy-based Grossman Cos., which has a number of real estate holdings in the state and close relationship with Summit Development Corp.. continued on page 130

“Your Source For Commercial Real Estate Lending.” *** Featured Loan Closings: ***

$21,000,000

$18,960,000

$5,200,000

$1,725,000

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Acquisition of a 5 Unit Apartment Property

Boston, MA

Scarborough, ME

Cambridge, MA

Boston, MA

$6,000,000

$15,800,000

$40,000,000

$3,850,000

Refinance of a 71 Unit Apartment Property

Refinance of a 140 Unit Apartment Property

Refinance of a 71 Unit Apartment Portfolio

Hyannis, MA

Methuen, MA

Construction of a 490,000 SF Retail Center Rochester, NH

Pawtucket, RI

Contact us to find out how we can help you with your next acquisition or refinance.

1775 Massachusetts Avenue | Suite 3 | Lexington, MA 02420 | (781) 861-7100 Paul@CornerstoneRC.com | Brett@CornerstoneRC.com

Construction Complete Class A Value

1432 &1440 MAIN STREET

Waltham

Many Amenities including:

CafĂŠ, Executive Conference Rooms, Fitness Center

Other Ferris Properties 1 Research Dr, Westborough MA 4 Technology Dr, Westborough MA 8 Technology Dr, Westborough MA 325 Donald Lynch Blvd,Marlborough MA 295 Foster St, Littleton MA

325 Donald Lynch Boulevard, Marlborough, MA 01752 www.ferrisdevelopment.com p: 508.281.5600 Leasing brokerage

THE REAL

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Avison Young Plants Flag in Improving Hartford CT

Experience.

Agility.

Vision.

CITYPLACE II, 185 ASYLUM ST., HARTFORD CT

MG2 is a vertically integrated real estate investment and development firm specializing in identifying middle-market opportunities in urban areas across New England.

We are built on hard work, commitment and strong relationships. Our market knowledge and years of experience allows us to recognize and react quickly to overlooked opportunities and gives us the capability to create value at every step – from acquisition to completion.

www.mg2group.com | 617.412.3200 inquiry@mg2group.com 1495 Hancock St. Quincy, MA 02169

H

ARTFORD, CT — Just as state officials and institutions including the University of Connecticut have done lately, Avison Young made a commitment to the state capital

CONNECTICUT MICHAEL SMITH last year in launching its 48th US ANDREW FILLER office here via the hiring of market veteran Andrew Filler. It is the second Connecticut office for AY, a Toronto-based operation that over the past six years has grown from 11 to now 70 offices in 63 markets and 300 to more than 2,000 real estate professionals SCOTT JAMIESON MARK ROSE across North America and Europe.

Filler is overseing the new office’s day-to-day operations. Bringing over 20 years of commercial real estate industry experience to his position, he most recently was managing partner at RM Bradley in Hartford.

A high-profile office leasing specialist, Filler told Real Reporter after the continued on page 132

A sincere

Thank You Newmark’s Boston

Capital Markets Group

Would like to Thank

Our Clients We are excited to work with you in

2016!

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32 T H E A N N U A L R E V I E W

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Boylston Cashes In on CT Retail Via HFF Sale ACQUISITIONS

n

DEVELOPMENT

n

CONSTRUCTION

TOWN GREEN AT WILTON CENTER, WILTON CT

W

Campanelli’s Acquisitions team focuses on purchasing value add properties with additional development opportunities.

Learn more about our portfolio, experience and investment criteria at CAMPANELLI.COM

ILTON, CT — Regional investor Paragon Realty Group paid Boylson Properties $9.9 million for a popular shopping center here in the community’s downtown during a 2015 transaction brokered by HFF. Town Green at Wilton Center is at 101 Old Ridgefield Rd. in this Fairfield County community barely an hour’s drive to New York City.

HFF’s Capital Markets group orchestrated the agreement after seller Boylston Properties engaged its retail division on the exclusive listing for a 30-year-old deCONNECTICUT velopment totaling about 35,000 sf in three buildings. “We are excited about our acquisition of Town Green,” Paragon ManWILLIAM MCQUILLAN aging Principal John Nelson said in a press release issued after the spring 2015 trade where he notes the asset is just a few miles from his company’s Westport headquarters and adding that, “We look forward to building upon the strong relationship that Boylston has enjoyed with the town of Wilton,” Paragon Realty manages and owns more than two million sf of investment grade real estate with a focus on retail and the remainder mixed-use and office properties MARK DESCHENES situated along the East Coast.

HFF Senior Managing Directors James Koury and Fred Wittmann with Associate Director David Fowler and Real Estate Analyst Patrick McAneny oversaew the transaction which continues a relationship assisting Boylston Properties in its CRE pursuits. Town Green at Wilton Center was completed in 1985 when a pair of buildings were added to the Centre School, a surplus municipal building repositioned to office JOHN NELSON and retail space. There were a dozen tenants in the property at the time of its sale, among them Hunan Café, Marly’s Bar & continued on page 155

Thank You! BOSTON MARKET PORTFOLIO

CENTRAL MARKET PORTFOLIO

SOUTH MARKET PORTFOLIO

FIVE BUILDING PORTFOLIO OF OFFICE BUILDINGS (173,889 SF)

SEVEN BUILDING PORTFOLIO OF OFFICE/RETAIL BUILDINGS (232,623 SF)

SEVEN BUILDING PORFOLIO OF OFFICE BUILDINGS (544,173 SF)

NORTH MARKET PORTFOLIO

WEST MARKET PORTFOLIO

CONNECTICUT MARKET PORTFOLIO

R.W. Holmes

16 BUILDING PORTFOLIO OF OFFICE/FLEX BUILDINGS (1,831,987 SF)

EIGHT BUILDING PORTFOLIO OF OFFICE/FLEX BUILDINGS (380,223 SF)

FIVE BUILDING PORTFOLIO OF OFFICE/FLEX BUILDINGS (633,148 SF)

We would like to thank Avison Young Blake Commercial Boston Realty Advisors CBRE of New England Colliers International Cushman & Wakefield Cresa Boston

Gola Corporate Real Estate Jones Lang LaSalle Lincoln Property Company Maurice F. Reidy & Co. McCall & Almy Mohr Partners NAI Hunneman Newmark Grubb Knight Frank

R.W. Holmes Sperry Van Ness Swearingen Realty Group T3 Advisors The Stevens Group The Stubblebine Company Transwestern RBJ

for another memorable year!

KS Partners

owned& managed

BOB HOLMES

RACHEL ENG

Senior Vice President

Vice President

978.560.0575

978.560.0564

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Maximizing Results in Commercial and Industrial Real Estate

®

Expanding IPA Brokers Still Rule CT Multifamily

AVALON ON STAMFORD HARBOR, RENAMED ANCHOR POINT APARTMENTS, STAMFORD CT

BY JOE CLEMENTS TAMFORD, CT — They have been a superstar tandem leading multifamily brokers in Connecticut forever, and now the rest of the CRE brokerage universe better look out as Victor W. Nolletti and Steve B. Witten expand their VICTOR W. NOLLETTI STEVE B. WITTEN

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capabilities beyond the Nutmeg State, helping spice up their normal slate of mega-deals here by launching an effort in Florida and also in 2015 participating in a Marcus & Millichap/IPA trade WES KLOCKNER of over 2,200 apartments in ERIC PENTORE Troy, MI. Recent Florida deals include $44.5 million for 366 luxury units in Orlando and $77 million—over $210,000 per unit—for 360 upscale rentals in Boca Raton. IPA is a division of Marcus & Millichap.

The exclusives farther a field hardly mean the team which includes Eric Pentore is abandoning New England by any stretch, or so it would seem from 2015 Capital Markets activity, with transactions featuring a nine-figure result in Stamford where an offspring of multifamily investor TGM Associates spent $115.5 million for Avalon on Stamford Harbor, a 323-unit high-end apartment complex overlooking Stamford Harbor divested by client AvalonBay Communities, the giant apartment REIT. The asset’s numerous amenities are anchored by a marina with 72 boat slips.

“The property is a truly exceptional, one-of-a-kind direct waterfront community in the heart of Fairfield County’s Gold Coast,” Witten says of a listing that yielded $357,585 per key and has been recast as Anchor Point. Nolletti says planned upgrades by TGM of the 14-year-old continued on page 133

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Seth J. Richard Manhattan Office: 212.430.5164 Seth.Richard@MarcusMillichap.com

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Measured RI Rebound Continues

BY MIKE HOBAN ROVIDENCE, RI — The Greater Boston investment sales market that saw record-breaking sales prices for assets in 2015 appears to have motivated some ALDEN ANDERSON JR. investors to look for yield south of the border, but aside from a handful of

P

RHODE ISLAND

ANDREW GALVIN

NEIL AMPER

significant retail deals and a large-scale trade in Warwick (that closed this January), investors spent much of last year just kicking the proverbial tires, according to Ocean State CRE professionals. Some of that inactivity was due to the fact that many of the state’s trophy assets had been acquired in recent years, especially in Providence, but

MIDDLETOWN VILLAGE, MIDDLETOWN RI

trepidation among investors wary of secondary markets was also part of the equation.

“While there certainly was an uptick in investor interest, there actually weren’t a lot of trades in office or investment grade industrial,” reports Alden Anderson, Jr., Senior VP at the CBRE/New England Providence office. “But I think there’s no question there’s a trend in that direction—investors who have thrown in the towel in the core markets on the pricing are starting to look further afield into some of the

key secondary markets—and certainly Providence would be at the top of that list. But investors are still very, very cautious underwriting in the secondary markets, particularly value-add plays where there is work to be done with absorption or tenant rollover exposure.”

Even so, Anderson and CBRE brokered a handful of value-add deals this past season, including the $7 million sale of 75 Fountain St. in Providence, a 160,000-sf office building that continued on page 134

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CBRE Multifamily Sale Yields $31.7M

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EST WARWICK, RI — A multifamily property here that fetched $31.7 million was among the marquee sales of an improving Capital Markets climate in the Ocean State, gains reflected in a report compiled by Capstone Properties that indicates commercial property sales rose 37.3 percent to $379 million in 2015. CBRE/NE was agent on

RHODE ISLAND the early season West Warwick exchange between its client, seller SBER Royal Mill LLC of Baltimore, and the buyer, an affiliate of Massachusetts-based Geraghty Associates.

CBRE/NE principal Simon J. Butler, who negotiated the deal with colleageue Biria St. John, says that while some investors remain hesitant about tertiary markets, Rhode Island is beginning to see improving fundamentals which might make it more palatable, especially as metropolitan Boston capitalization rates for best product are in the 5 percent level and even lower. “It is seen as a potential alternative,” he says. continued on page 133

ROYAL MILLS APARTMENTS, 125 PROVIDENCE ST., WEST WARWICK RI

Real Estate Intelligence for Boston SUBSCRIBE NOW at bit.ly/spectrumsubscribe

@encompassbren Š 2016 Encompass Real Estate Strategy LLC. Boston, Massachusetts

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Helping New England businesses

thrive and grow.

Calare Alum Brian Poitras Finds Value in Providence

The commercial real estate group at Washington Trust provides commercial real estate mortgages for the construction, refinancing, and purchase of investment real estate projects throughout New England, including the following: $25 MILLION for the refinancing of the 17-building, mixed-use property located in South Kingstown, R.I. $20.67 MILLION for the financing of a 77,558 square foot retail shopping center located in North Andover, Mass. $15.4 MILLION for the acquisition of a 13-property industrial/flex/office portfolio located in Clark, N.J.

95 CHESTNUT ST., PROVIDENCE RI

$16.147 MILLION for rehab financing of a 104,343 square-foot Class A office building located in Providence, R.I.

BY MIKE HOBAN ROVIDENCE, RI — Brian Poitras, best known in Greater Boston CRE circles as longtime principal and portfolio manager at Hudson-based Calare Properties, is now plying his trade—adding value to underperforming assets—here in the Ocean State. Following his departure from Calare late summer 2014, Poitras RHODE ISLAND stepped in as presBRIAN POITRAS ident and CIO of Waldorf Capital Management, the Providence-based real estate investment firm founded by CEO Zachary Darrow in 2009. Poitras says he believes that Providence, with its growing tech sector, the expansion of Johnson & Wales University and Brown University’s medical care facilities, and state investment in development of several Interstate-195 parcels, is ripe for strategic investment.

“There are a couple of significant things coming ZACHARY DARROW together making Providence a really attractive place to invest in,” says Poitras. “I saw opportunity and a growing market, and tapped into an existing network with solid political connections. It’s a really good opportunity.”

Poitras immediately set to work in his new role, as the firm acquired a well-located office building in October 2014 that needed what he refers to as “a fresh set of eyes,” then followed up that deal in the summer 2015, with Waldorf closing on the second property under his watch, the former Irons & Russell Building at 95 Chestnut St. in the Jewelry District. The historic 57,000-sf Class B office building is undergoing conversion into 57

P

$11.5 MILLION for the refinancing of a 126,000 square-foot office building located in East Greenwich, R.I. $6.85 MILLION for the construction of a medical office property located in Newtown, Conn. $6 MILLION line of credit for the construction of 42 residential condominium units in Storrs, Conn.

Commercial Real Estate Contacts Julia Anne M. Slom, Senior Vice President, Team Leader . . . .401-348-1430 Laurel L. Bowerman, Vice President . . . . . . . . . . . . . . . . . . . . . 401-654-4847 Suzanne Walsh Erno, Vice President . . . . . . . . . . . . . . . . . . . . . 401-348-1492 Mary K. Ettinger, Vice President . . . . . . . . . . . . . . . . . . . . . . . . . .401-348-1415 Catherine R. Fusco, Vice President . . . . . . . . . . . . . . . . . . . . . . . 401-348-1681 Kevin M. Hanrahan, Asst. Vice President . . . . . . . . . . . . . . . . . . 401-348-1354 Bethany A. Lyons, Vice President . . . . . . . . . . . . . . . . . . . . . . . . .401-348-1538 Timothy M. Pickering, Senior Vice President . . . . . . . . . . . . . . . 401-348-1482 Erin E. Fox-Dzilenski . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .401-348-8244 Member FDIC

continued on page 135

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Maine Enjoying the Ride SAMANTHA HALLOWELL GREG BOULOS

DREW SIGFRIDSON JOSEPH PORTA

BY JOE CLEMENTS ORTLAND, ME — Jackson Browne knew how to get here, and now the rest of the world is rolling into town whether by way of

P

MAINE planes, Amtrak’s scenic Downeaster from Boston or the Maine Turnpike onto I-295 riding a magic music bus.

After limping into the new decade following the cataclysmic 2008 reces- 445 WILLARD ST., QUINCY MA sion, Maine commercial real estate hit new strides in 2015 led by a series of high-pro- three suburban office buildings in South Portfile office building sales, among them One and land where Deutsche Asset & Wealth ManageRR Portland half pgSquare H:Layout 1 by 10/14/14 4:02 ment PM Page Two acquired a New Jersey reaped4 $11 million for 110,000 sf in a investor for an astounding $66 million and campus setting, that investor also the seller of

One and Two Portland Square. Those deals were both listed by the Robert E. Griffin Jr. team and in partnership with CBRE The Boulos Group through Drew Sigfridson, SIOR, on the Portland listing, and James Harnden of Harnden Commercial Brokers, bringing in the buyer, 400 SouthBorough LLC. Back over in Portland proper, Albany Road Real Estate Partners secured 195,000 sf at 100 Middle St., that $35.3 million off-market acquisition occurring in early 2015 as first detailed

by Real Reporter. As that article outliined, President Christopher J. Knisley was brought into the deal by CBRE The Boulos Group, with Greg Boucontinued on page 136

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JLL, NAI/Dunham Asset Gets $20M from Hotelier

THANK YOU !

RESIDENCE INN, 145 FORE ST., PORTLAND ME

BY JOE CLEMENTS ORTLAND, ME — Norwich Partners founder David Leatherwood hardly needs a tourist map when visiting Maine’s largest metropolis, having already developed a Residence Inn that opened in 2008, and so it is perhaps no surprise his Norwich Partners was in the running for a site just doors away featuring direct access to Portland’s thickly settled waterfront that NAI/Dunham Group and JLL teamed up to harvest this past summer.

MAINE And sure enough, as Real Reporter first unveiled last December, the hotelier emerged winning bidder of 1.3 acres and a cash-yielding parking garage at 160 and 167 Fore St. CHARLIE LUCE “There was a ton of activity for a tertiary market,” recounts JLL broker Charles Luce, part of a Capital Markets assemblage that had Managing Director Frank F. Petz and John Meador on the case plus Senior VPs Michael Coyne and Travis D’Amato of the multifamily practice group and JLL Hotel Managing Director Robert Webster and Associate John Harper.

Portland-based NAI/Dunham pegged Managing Partner Frank O’Connor, SIOR, and broker Katie MilFRANK O’CONNOR lett Esq. to advise the client in the marketing campaign for which O’Connor says his office conducted at least 20 site visits showing the asset to capital whose sources were hailing “from away,” as a Mainer might describe such bidders.

Norwich wasted little time putting any doubts to rest about its intentions, with the firm underway on a structure at 160 Fore St. which will be flagged an AC Hotel, that independent brand already in place at KATIE MILLETT the group’s new Aventura, FL, operation that has 233 rooms. The Portland version which comes on line next summer will be the 21st hotel in a Norwich portfolio that features a half-dozen projects outside New England in Florida and New York, with the rest in Maine, Massachusetts, New Hampshire and Vermont.

While Norwich Partners is based regionally, Luce and O’Connor say

P

continued on page 139

SYNERGY INVESTMENTS Would Like To Thank The Following Firms For Helping Us Execute Over 125 Lease Transactions In 2015 AVISON YOUNG BOSTON REALTY ADVISORS BROWN & WAGNER CARR MEDICAL REALTY GROUP CB RICHARD ELLIS COLLIERS INTERNATIONAL CRESA BOSTON CUSHMAN & WAKEFIELD THE DARTMOUTH COMPANY JLL LANDMARK REAL ESTATE ADVISORS LINCOLN PROPERTY COMPANY McCALL & ALMY MCPHERSON CORPORATION NAI HUNNEMAN NEWMARK GRUBB KNIGHT FRANK OLYMPIC REALTY RE/MAX DESTINY THE STEVENS GROUP T3 ADVISORS TRANSWESTERN/RBJ

100 Franklin Street, Suite 200 Boston, MA 02110 | 617.204.9506 www.synergy-inv.com

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C&W NH Posts Award-Winning Year

BY JOE CLEMENTS ANCHESTER, NH — Cushman & Wakefield’s New Hampshire bureau had extra reasons to celebrate the holidays this past year, having closed on a five-building, THOMAS P. FARRELLY 217,000-sf portfolio a week before Thanksgiving, that a $11.5 million transaction,

M

NEW HAMPSHIRE and on Christmas Eve completing a $17.5 million trade of five more in Hudson and Nashua encompassing a DENIS C.J. DANCOES hair under 500,000 sf.

The trio of Thomas P. Farrelly, SIOR, Denis C.J. Dancoes and Sue Ann Johnson got further party ammunition at the annual Commercial Investment Board of Realtors Award where they not only particSUE ANN JOHNSON

CAPITAL PLAZA I, MANCHESTER NH

ipated in the Industrial and office leases of the year but also walked away with Office Building AmSale of the Year, that being the larger portfo-

lio sale in December for Deutsche Asset & Wealth Management that also involved the Robert E. continued on page 163

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Karl Norwood Wins Two CIBOR Awards

655 WILLOW ST., MANCHESTER NH

BY JOE CLEMENTS EDFORD, NH — Karl E. Norwood, a household name in New Hampshire CRE circles, showed off his versatility last year in trading a pair of properties noteworthy enough to each win major awards recently at the New Hampshire Commercial Investment Board of Realtors’ annual ceremony feting top transactions of the prior season. A $4.2 million exchange completed in October tied for Industrial Deal of the Year in which Norwood and colleague John Hoben negotiated a sale of 655 Willow NEW HAMPSHIRE St. in Manchester for its owner, OSRAM Sylvania, the lighting manufacturer which was further being counseled by DTZ Inc. KARL E. NORWOOD Buyer Brady Sullivan was represented in-house by Director of Commercial Real Estate Charles N. Panasis for a deal it is partnering on with the Anagnost Cos.. Among other challenges, “major environmental issues” on the site had to be addressed prior to sale of the hulking 303,000-sf facility. A mix of retail and light industrial is in the cards under the new sponsors.

The second commendation Karl Norwood reJOHN H. HOBEN ceived was for Best Suburban Sale of 2015, in that case being able to attract an academic user for Chester College in Chester, NH, A private school was rounded up to acquire the four-building campus featuring 50,000 sf of classrooms, dining facilities, library and dorm rooms. That October outcome was for $1.53 million from Busch International Inc., with the organization intending to attract students from across the globe, its enrollment targeted for about 200 attendees ranging from middle through high school.

The summer 2015 trade capped a multi-faceted assignment where NAI/Norwood was called in upon the school’s demise in May 2012, then recommended two parcels and their attendant buildings on the 70-acre complex be divested separately, which they have been since, before then marketing the remaining slice. “NAI/Norwood Group was pleased to have found an educational use for the remainder of the campus,” Norwood relayed in a press release. Apparently the judges at NHCIBOR were pretty happy with the conclusion as well.

B

continued on page 123

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$291M NorthPoint Land Sale ‘Historic’

BY JOE CLEMENTS AMBRIDGE — Things are about to get much different here on the spit of terra firma where this community intersects with Boston and Somerville, their confluence which in the wayback machine was called Prison Point, a stretch largely un-

C STUART SHIFF

LAND SALES

FRANK F. PETZ

KEVIN MALLOY

improved for decades while nearby Kendall Square blew into a Mecca of commerce for global life sciences and technology companies once Boston Properties landed on its shores some 40 years or so prior. Progress has been made this millennium, however, especially on the fringe of a 42-acre swath bought in 2010 by the Canyon-Johnson Urban Fund G R E A T E R

NORTHPOINT, CAMBRIDGE MA (RENDERING)

and development partner HYM Investment.

Three residential buildings totaling nearly 700 units have been constructed there, the newest a high-rise abutting the Gilmore Bridge where Canyon-Johnson and HYM tore down an aging office building then constructed 355 units and sold it last August for $197 million, with PrudenB O S T O N

R E A L

E S T A T E

The Commercial Brokers Association (CBA) is dedicated to serving commercial real estate interests throughout Greater Boston.

Comprised of over 350 highly educated commercial brokers and affiliated professionals, CBA provides relevant educational programs, legislative advocacy and networking opportunities to improve the standards of the real estate profession and to enhance our members’ ability to serve their clients ethically, professionally and successfully.

To learn more about the benefits of CBA membership, contact us at: www.cbaboston.org or call 617.423.8700

www.cbaboston.org

tial Real Estate Investors landing that building at 20 Child St., branded as Twenty20.

Meantime, JLL was working on the remaining master-planned acreage, a campaign that culminated in what JLL Managing Director Frank F. Petz declares to be the most valuable land sale continued on page 140 B O A R D

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$104.2M Lab Trade Highlights Big Year at Transwestern RBJ

SELECTED COMMERCIAL REAL ESTATE FINANCING TRANSACTIONS ARRANGED BY:

CAPITAL ALLIANCE ADVISORS Ashworth Mortgage Corp. – Boston, MA Estreich & Company – New York, NY Participating

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Acquisition Financing $11,300,000 Retail Outlet Located in: Freeport, ME

First Mortgage

First Mortgage

830 WINTER ST., WALTHAM MA

BY JOE CLEMENTS ALTHAM — Thanks to their founding fathers, whose commercial real estate teeth were cut in an era where brokers played both sides of the leasing and sales field, the Boston office of Transwestern, aka Transwestern CHRIS SKEFFINGTON JOHN LASHAR RBJ, has always been an adapt-

W

BROKERS able operation, and that was on super-sized display in mid-summer 2015 when the Capital Markets crew led by Chris Skeffington melded with leasing pros John ROY SANDEMAN JON VARHOLAK Lashar, Steve Purpura and Jon Varholak to pull off one of suburban Boston’s largest laboratory trades ever in the $104.2 million purchase here of 830 Winter St. by King Street Properties from long-term landlord Intercontinental Real Estate Corp.

“They absolutely killed it on that one,” Skeffington reflected of Intercontinental which in 2005 had a visionary belief for what was then an embryonic life sciences inventory beyond Cambridge, the invest- ANDREW STONE ment group led by CEO Peter Palandjian acquiring 830 Winter St. from Praecius Pharmaceuticals via a partial sale/leaseback.

Skeffington credits Brighton-based Intercontinental for “making 830 Winter Street a viable competitor to the crowded Cambridge submarket” by the time his firm was retained to peddle the 182,000-sf facility to a capital constituency increasingly enamored by laboratory, especially firstclass assets occupied by solid credit tenants. Intercontinental took the asset from 35 percent filled to full occupancy in a matter of months to

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World Beats Path to Synergy CRE

BY JOE CLEMENTS OSTON — No one knew their names in these parts until Akelius US, Callahan, Columbia Property Trust and Nippon Telegraph & Telephone made their initial forays into metropolitan Boston in 2015, each spreading at least $100 million to quickly garner recognition across industry circles, especially with all four—and many more newcomers—declaring their desire goes beyond a one-off relationship.

“Boston has become incredibly popular for outside investors,” says one CRE veteran, and a growing proportion possess a foreign flair.

INVESTORS Akelius, whose voracious appetite nailed down four different apartment buildings in its bold arrival last summer, hails from Sweden, and NTT is a Japanese investor who picked up three properties, including two HFF-listed office buildings acquired from one of the most familiar figures in the Boston CRE crowd, Synergy Investments founder David Greaney, himself of Irish heritage who has become a leading Boston landlord over the past decade.

Real Capital Analytics reports $7.8 billion was spent on regional office buildings in 2015, and foreign investors have been so voracious since 2014 they today own almost one-third of the Hub skyline. Canadian

B DAVID GREANEY

MAURA MOFFATT

CHAD J. BOULAY

continued on page 142 141 TREMONT ST., BOSTON MA

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Ever-Expanding KS Partners Spends $39M on Four Deals

Trilogy Law LLC Legal Counsel.

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CONNECTER PARK, LOWELL MA

W

OBURN — KS Partners had another banner year in 2015 on the investment sales front, with the firm based here led by Kambiz Shahbazi active from beginning to end, its acquisition

INVESTORS

12 Marshall Street Boston, MA 022108

KAMBIZ SHAHBAZI

DAVID J. PERGOLA

deals starting with the February purchase of Connecter Park In Lowell at a consideration of $14.6 million, then last autumn they snagged a pair of inner suburb office buildings secured for $16.9 million in Newton and Watertown. KS Partners finBRIAN R. DOHERTY BRUCE LUSA ished out the season with the Dec. 30th closing of Norfolk Place in Dedham, that a 49,950-sf office building where $7.8 million was paid to Normandy Real Estate Partners.

“We are big believers in the Boston market and will continue to stay very active,” Shahbazi tells Real Reporter regarding his firm’s progress on the acquisitions front that continued this year in May’s $29 million purchase of Highwood Office Park in Tewksbury JENNA SKAAR from longtime holder Equus. The strategy, according to Shahbazi, is to pare certain properties, especially those farther away from the city, and do deals closer to Boston with a concentration on increased size he says creates better operational efficiencies. “I think we have done very well with what we were trying to accomplish,” he says, both in getting the three inner suburban assets and to the north now having two large office parks that he says complements Brickstone Square in Andover, the hulking 1.1-million-sf office park KS Partners acquired in Oct. 2014 for $59 million being repositioned into modern office product with a focus on technology tenants. continued on page 144

linearretail.com

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CONTACT Aubrey: Partner, Acquisitions | 781.572.4163 | aubrey@linearretail.com Rick: VP, Acquisitions | 508.527.5127 | rrostoff@linearretail.com

9,950

7,934

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Cornerstone Tops 100 in 2015 Loans

BY JOE CLEMENTS EXINGTON — As much as a Donald Trump business type might appreciate them, it is pretty certain there are no actual steel cage death matches employed in Cornerstone Realty Capital’s mortgage banking process, but repeat clients are plenty entertained by the firm’s proven approach of pitting

L

PAUL NATALIZIO

MORTGAGES

lenders against each other in order to better terms.

The shop which in 2015 had 102 closings—its second straight year averaging nearly two per week—is led by founder Paul Natalizio and Brett Pagani, with BRETT PAGANI clients including such veteran landlords as Micozzi Management, Mount Vernon Co. and True North Capital Partners..

Befitting those owners, the transactions of 2015 mostly focused on multifamily assets, a

APPLETON SQUARE APARTMENTS, METHUEN MA

popular product type among all sorts of debt conduits. Also in the roster, however, were substantial retail property loans arranged by Cornerstone and the company does nine different product types ranging from industrial and office to hotels, mixed-use and self storage.

1,800,000,000

Apartment Sold Metro Volume Boston Sold Metro Boston 14Q1

2015 Volume

by Quarter

1,350,000,000

14Q1 14Q2 14Q2 14Q3 14Q3 14Q4 14Q4 15Q1 15Q1 15Q2 15Q2 15Q3 15Q3 15Q4 15Q4

900,000,000

1,963

0,194

TOTAL VOLUME 2015 TOTAL VOLUME 2015

450,000,000

5,269

1.71

0

2014204,129,950 -'15

15Q1

15Q2

15Q3

15Q4

1,35 1,35

204,129,950 553,167,934 553,167,934 356,098,471

90 90

1,070,167,389 642,830,194 642,830,194 661,120,000

45 45

356,098,471 409,641,963 409,641,963 1,070,167,389

661,120,000 1,750,145,269 1,750,145,269 $4,124,262,851.71 $4,124,262,851.71

BLACK FRIDAY DEALS

0,000

1,80 1,80

continued on page 146

APARTMENT ACQUISITIONS Apartment Volume

8,471

7,389

“It has been a crazy pace, but we are happy to have had some very good new clients join over the past year as we continue to service our very valuable long-term relationships,” Natalizio says in recapping 2015 where his firm engaged

Ten years of data show strong seasonality when it comes to investment volume, with 18 percent of deal volume closing in December, more than twice its share of time in the year. 2015 was particularly busy in December, with 36 percent of deal volume closing in the last month.

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Davis Cos. Gets Mixed Bag in 2015 CRE Buying Spree

COLLABORATIVE

ENVIRONMENT

CONVENIENT LOCATION TOWER POINT, BOSTON MA

B

OSTON — One cannot imagine staffers at the Davis Cos. being bored ever, and that would seem the case given this past year’s broad book of business featuring a bit of everything from fast-track overhauls of 2014 and early

INVESTORS

CONTEMPORARY SPACE

JONATHAN G. DAVIS RICHARD MCCREADY

2015 purchases and an interesting mix of fresh acquisitions ranging from a 344-key Woburn hotel and two Waltham office buildings to a prime redevelopment play in Boston’s emerging South End. There was even an apartment community in Rich- QUENTIN REYNOLDS LARRY F. LENROW mond VA, part of the firm’s activities outside New England that also has Davis Cos. assets in Illinois, Pennsylvania and Washington DC. And in the midst of all that, the company led by namesake Jonathan G. Davis cashed out on its savvy Seaport District investment at Tower Point, tossing that first-class 155,000-sf office building to Rockpoint Group for a tidy $62.1 million versus the $43.4 million spent in Oct. 2013.

The Robert E. Griffin Jr. Capital Markets team now at Newmark handled both deals, the latter for Cushman & Wakefield and the same crew which brokered the sale prior to Davis Cos. owning the one-time warehouse, that of $32 million by Meritage Properties back in Oct. 2008.

Terming it “a pretty interesting year,” Davis Cos. Managing Director of Acquisitions Quentin Reynolds says the actions taken in 2015 were considered prudent on the sales side and opportunistic making multiple value-add investments including 112 Shawmut Ave. in Boston’s South End. “We love that property and see a lot of possibilities,” Reynolds says of the 70,000-sf which traded at a healthy $26.2 million in a fast-moving continued on page 148

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Caution Flag Up for Some Buyers BRIAN H. KAVOOGIAN BRYAN J. CLANCY

BY JOE CLEMENTS OSTON — Just why is anybody’s guess—and there are plenty floating around CRE investment sales circles of late—but

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INVESTORS some of the decade’s most prolific buyers cut back their acquisition vol- 51-63 FRANKLIN ST., BOSTON MA umes in 2015, particularly in the regional office Investments.

Among those who appeared to ease up— sector that still managed to amass nearly $8 billion in transacted assets, much of that coming or acknowledge doing as much—would be from capital sources new to the area as well as Campanelli, the ever-energetic Charles River numerous regulars who did continue to expand Realty Investors/National Development tandem; their platforms such as Albany Road Real Estate Harold Brown’s Hamilton Cos., Leggat McCall Partners, DivcoWest, Invesco, KS Partners, No- Properties, Marcus Partners and Synergy Invaya Real Estate Ventures, R.J. Kelly and Taurus vestments. Some observers speculate the lull is

THOMAS M. ALPERIN JOHN J. O’NEIL

a result of those investors having already scored their deals in the opportunistic period when CRE investment was on the wane following the 2008 recession which lingered well into the 2010s.

“They were all ahead of the pack, and have already made the investments and now they are dealing with the properties and that has some people on the sidelines for the moment,” observes Robert E. Griffin Jr., Capital Markets chief at Newmark and its US Head of Investments. Griffin points to CRRI/NatDev juggling dynamic redevelopment projects in Boston’s South End and Burlington, the latter being New England Executive Park continued on page 150

Atlantic Marlborough Project Sails On JOSEPH L. ZINK

DAVID DOUVADJIAN

BY JOE CLEMENTS ARLBOROUGH — Colliers International debt expert Thomas Welch recalls the vistas were beautiful, then as now, but

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INVESTORS in summer 2011, a “dead economy” and two major corporate defections 200 FOREST ST., MARLBOROUGH MA from this MetroWest metropolis cast an omi- bargain-basement price of $8.7 million, or less nous quiet at 200-230 Forest St., the 109-acre than a dozen dollars per sf for the cavernous former Hewlett Packard campus left vacant assemblage of 750,000 sf.

“It was kind of depressing to be in that H-P by that computer giant which Colliers client Atlantic Management Corp. was buying at a space back then,” Welch recounts in noting Fi-

KEVIN PHELAN

THOMAS WELCH

delity Investments had just announced it was shipping 1,100 employees to Rhode Island from a property at the same interchange, offering what seemed a staggering one-two punch to Marlborough and its real estate market. Crediting AMC’s successful legacy dating to 1972 and the lender’s foresight, Colliers was able to arrange against that ennui and in the midst of a credit crunch an $8-million acquisition loan from Gotham lender RCG Longview for the complex now known as Forest Park. The Colliers team continued on page 152

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R.J. Kelly Co. at 65 Not a Retiring Sort

Innovation Needs Open Space

100 QUANNAPOWITT PARKWAY, WAKEFIELD MA

BY JOE CLEMENTS URLINGTON — For most of its 65 years here in the hometown of founder and Chairman Richard J. Kelly, his eponymic R.J.Kelly Co. has been known for constructing millions of square feet

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of industrial and office product in such north suburban communities as Andover, Burlington, North Reading, Wakefield and Woburn. But as the company celebrates an anniversary rare in any profession, let alone the RICK GRIFFIN ever-tumultuous construction SCOTT KELLY sector where only a handful of such vintage firms remain, the contingent today whose leadership includes sons Brandon and Scott Kelly has shifted its attention to acquisitions and redevelopment pursuits, endeavors that now have the company in possession of three million sf of space. Almost one million sf of that is in its base in Burlington, and there are several thousand self- storage units across New England even after a 4,000-unit trade to begin 2016.

President and CEO Brandon Kelly predicted at the outset of this year it would be “even busier” than 2015 when the company did make two purchases of note balanced by the successful disposition of 23 Frontage Rd. in Andover to a California REIT for more than five times the price paid in July 2011. “We were very happy with the way that turned out,” he says. Many early buyers of this decade have made their money and moved on or are still retrofitting their gained assets, but Brandon Kelly continued on page 154

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Albany Road Moves on in NH

BY JOE CLEMENTS MHERST, NH — The Albany Road Real Estate Partners’ tale of 2015 was primarily its plethora of acquisitions taking place from Maine to Tennessee that put the group led by President Christopher J. Knisley above $500 millon in acquired real estate since launching the Boston firm’s platform four years ago

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INVESTORS next month via the $21 million auction purchase CHRISTOPHER J. KNISLEY of an underwater shopping plaza in this Manchester suburb. And Amherst Crossing became the firm’s first investment taken full circle in June 2015 when Slate Properties paid $24.4 million for the Hannaford Supermarket-anchored SCOTT CLOUD center listed by Cushman & Wakefield.

The reluctant owner back then to Albany Road was TD Bank, a lender so assured by the winning bidder that it provided financing to accommodate MARTA DRAGOS the acquisition of property it had foreclosed upon to foment the auction. The new landlord then implemented an asset management campaign, renewed several of the 14 existing tenants, leased up a vacant out-building and secured a 40 percent property tax reduction.

Amherst Crossing investors who include high net worth individuals and family based funds not only received 15.3 percent cash distributions over the holding period, the net IRR came in at eye-popping 28.2 percent. Nine of those backers then deferred capital gains by taking a position in a suburban office building in Raleigh, North Carolina.

The C&W team assisting on Albany Road’s sale included its versatile New Hampshire operation of Thomas Farrelly, Denis C.J. Dancoes and Sue Ann Johnson as well as the retail practice group leader Geoffrey Millerd and Justin Smith plus Robert E. Griffin Jr. , those three now all at Newmark.

Albany Road has not abandoned New Hampshire by any means, with the company in February of this year acquiring a substantial

AMHERST CROSSING, AMHERST NH

100 DOMAIN DR., EXETER NH

flex/office complex in Exeter, paying $51 million for 509,000 sf at 100-200 Domain Dr. in Exeter.

Tenants include Bauer Hockey, Garnett Hill, Liberty Mutual Insurance Co. and Timberland. That deal, as Real Reporter unveiled in its Feb. 18th edition, put the company over the top on two major milestones—cresting $500 million of acquired real estate since 2012 and putting the portfolio above five million sf, with the Exeter acquisition from Altid Enterprises of Cambridge on the upper end of Albany Road’s target range of $10 million to $50 million.

“Altid Enterprises has been a pleasure to work with throughout this transaction,” Knisley said in that Real Reporter article where he

called the firm’s principals “extremely well-respected in New England real estate circles” who were able to retenant 100 Domain Dr. in the aftermath of the 2008 recession. Knisley had a past relationship with Altid principal Ed Carye running back some 20 years and thusly, “there was a high degree of certainty between us” for getting the trade finalized.

During 2015, office deals were made in Georgia, Tennessee and North Carolina, with Albany Road picking up two Raleigh office buildings totaling 280,000 sf at a consideration of $40.7 million, those being 500 Gregson Dr and 2610 Wycliff Rd., that 174,200-sf first-class asset bought continued on page 147

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Hamilton Business A Developing Situation B HAROLD BROWN

OSTON — After spending some $500 million already this decade on metropolitan Boston CRE, Hamilton Co. intended to “keep our powder dry” during 2015, President Carl A. Valeri told Real Reporter at the outset of last sea-

INVESTORS

CARL A. VALERI

DAVID HACIN

son’s campaign, with plans instead to focus on developing four owned parcels into multifamily, and that script is largely what the firm led by 91-year-old Harold Brown followed and has carried over into this year as well.

Though wary of rising prices, Hamilton Co. could not stay completely on the sidelines in 2015, paying a healthy $31.6 million in autumn for 94 Lexington

CAPTAIN PARKER ARMS APARTMENTS, 125 WORTHEN RD., LEXINGTON MA

apartments close to where the Allston concern already owns a similar asset, the Battlegreen Apartments at 32-42 Worthen Rd. Captain Parker Arms Apartments at 125 Worthen Rd. is the latest addition. It has 11 buildings on 10.6 acres and listing

agent NAI/Hunneman Commercial Co. rounded up two dozen finalists for the property before Hamilton took the prize, a common position when the firm sets its mind to chasing an asset. continued on page 164

Home Cooking for Calare

BY JOE CLEMENTS UDSON — The industrial set in these parts need not fear separation anxiety towards Calare Properties after its expansion to central Florida in 2014, because while CEO William Manley still applauds his three-building acquisition in Tampa and St. Petersburg, the firm has retained

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INVESTORS WILLIAM MANLEY

BRYAN C. BLAKE

its focus on New England, having since the start of last year acquired at least 10 buildings from metropolitan Boston to Interstate 495.

“We have been able to get some great properties in a pretty short period,” Manley says in reflecting on 2015 and the carryover to this year in which his firm

112 BARNUM RD., DEVENS MA

most recently bought two Chelmsford buildings in early June, that $8.9 million investment providing 127,500 sf of flex/industrial space constructed in 1980 and stabilized by the prior

ownership which had paid $12.7 million for 19 and 21 Alpha Rd. in Sept. 2006.

The latter property was purchased at 100 continued on page 165

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Mount Vernon Co. Shifting Focus

BY JOE CLEMENTS RIGHTON — Launching an ambitious redevelopment here on the other side of the Allston-Brighton hyphen from where his Mount Vernon Co. created BRUCE A. PERCELAY an entirely new sustainable residential cluster along Allston’s Brainerd Road—a portion of which fetched $147 million in 2015—principal Bruce A. Percelay has had his hands full again this year gaining approvals and this summer JAY BISOGNANO launching construction of a mixed-use project that will deliver 132 residential units where Western Avenue meets Leo M. Birmingham Parkway on a 1.1-acre site MVC bought for $2.3 million in June 2015.

“It is going to redefine ROBERT B. BELLINGER

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75-87 HARVARD ST., BROOKLINE MA

Western Avenue,” Percelay declares of a project that will also have upwards of 5,100 sf of ground-floor retail in a neighborhood on a gentrification path thanks to Harvard University’s voracious development around Harvard Stadium

and up Market Street and the massive Boston Landing where the Bruins and Celtics are going to be practicing at the headquarters of developer/occupant New Balance footwear. A commutcontinued on page 159

Linear Ratchets Up Retail Platform

BY MIKE HOBAN URLINGTON — 2015 was a very big year for Linear Retail Properties, and in more ways than one. Not only did the owner/operator purchase a record number of new properties, they stepped far above their customary role buying smaller, “convenience-oriented” retail in completing

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RETAIL a $57.5 million acquisition of three centers totaling nearly 125,000 sf in June.

WILLIAM J. BECKEMAN Linear typically trades for assets in the $2 million to $15 million space, but when the opportunity to acquire the larger, stabilized portfolio materialized, the Burlington-based firm stepped up, buying AUBREY CANNUSCIO Eaglewood Shops at 175

EAGLEWOOD SHOPS, 175 TURNPIKE ST., NORTH ANDOVER MA

Turnpike St. in North Andover, Main Street Marketplace at 1030 Main St. in Waltham and 1036 Main St. in Waltham, the three plazas purchased from developer Ross Hamlin.

“I’ve been after Ross Hamlin for years to sell us his properties, and he finally decided to,” relays Aubrey Cannuscio, partner and Acquisitions continued on page 160

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CRE Sales Abound at All Levels

BY JOE CLEMENTS OSTON — The 2015 lending and investment sales season has seldom been matched on deal volume and the pedigree of assets in flux, be it Blackstone’s 222 Berkeley St./500 Boylston St. package (Eastdil) and 131 Dartmouth St., (JLL)—Back Bay towers that went for $1.3 billion and $315 million—or downtown and Seaport buildings divested by Commonwealth Ventures ALAN LEVENTHAL MIDDLE MARKETS and its respective development partners Bentall Kennedy at Fifty Franklin St. and Ares Capital for the State Street Bank headquarters at One Channel Center, first-class assets the Robert E. Griffin Jr. Capital Markets team was exclusive agents on in reaping a collective $607 million for those entities in 2015 (see story, page four top).

One casualty of all the super-sized transactions might be losing sight of how frequent Middle Market opportunities and even bouCHRISTOPHER J. LOCATELL tique transactions also were in attracting a sea of domestic and overseas capital into Boston and out to the suburbs, those sources often uniting with local investors willing to bet on continued upside. Whatever the impetus, mid-level office buildings of note changing hands in 2015 included 711 Atlantic Ave., 186 Lincoln St. and 210 South St., all abutting South Station in the historic Leather District, while across from the Boston Common, Colliers International advised the owners of 162 Boylston St. in their lega- FINANCIAL DISTRICT MIXED-USE BUILDING 150 STATE ST. SOLD IN RR half pg H:Layout 10/14/14 4:02S.PM Page 4 The property is best AUGUST 2015 FOR $2.39 MILLLION VIA A BOSTON REALTY ADVISORS cy sale 1to local player William Mosakowski.

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Newmark Grubb Takes 2015 Prize EDITOR

Joe Clements WRITER

Mike Hoban WRITER

Jay Fitzgerald PRODUCTION MANAGER Bill Samatis TECHNOLOGY Brandon Henson PHOTOGRAPHER Derek Szabo DATA DEVELOPMENT Ryan McGrath ILLUSTRATOR Will Samatis DATA ANALYST Brendan Carroll PUBLISHER & CEO Michael J. Walsh

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225 FRANKLIN ST., BOSTON MA

BY JOE CLEMENTS OSTON — In the matter of one’s talent walking out the door every night, 2015 must have been a frenzied season for commercial real estate brokerages who saw an unprecedented wave of such defections sweep across metropolitan Boston, the trend driven by a mix of merger-mania and big-pocketed nationals arriving on the scene and aggressively targeting the best and the brightest in the leasing, finance and management realms. And PERSONNEL certainly the most radical example of that activity occurred last autumn when the Cushman & Wakefield Capital Markets team founded by Robert E. Griffin Jr. sporting $40 ROBERT E. GRIFFIN JR. billion in sales volume over three decades ended a month-long tug-of-war and joined Newmark Grubb to make its shop the most powerful in New England overnight, as first revealed at therealreporter.com on Sept. 23rd.

The shift was prompted by DTZ buying out rival C&W and merging their Boston offices, opening the door for Newmark to make a run at the team while details were being completed. As highlighted by DEBRA GOULD Real Reporter and other media outlets later, Griffin not only took with him other top leaders of the Capital Markets team including Vice-Chairman Edward C. Maher Jr. and Executive Director Matthew E. Pullen plus veterans running various practice groups such as Michael Byrne on multifamily, retail ace Geoff Millerd and Academic Medical division founder Frank Nelson, but also the bulk of C&W Boston’s leasing and property management professionals. Estimates

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Saul Ewing Clients Enjoy Robust Year

BOSTON'S LEADERS IN DIGITAL CONNECTIVITY ALEXANDRIA REAL ESTATE EQUITIES BEACON CAPITAL BIOMED REALTY JAMESTOWN KBS MERITAGE PROPERTIES MITIMCO TRITOWER FINANCIAL

CONNECTOR PARK, LOWELL MA

BY JOE CLEMENTS OSTON — They used to be Dionne & Gass, a plucky boutique law firm fighting above its weight as advisors to an esteemed lineup of commercial real estate owners and operators. Then five years ago next month, the platform of Richard D. Dionne and Richard D. Gass and changed when their firm was acquired by Saul Ewing LLP, a practice focused on the East Coast which longtime Dionne & Gass partner Sally E. Michael says has been helpful in expanding their book of business and ensuring existing clients aiming to pursue RICHARD D. GASS SALLY MICHAEL markets outside New England can get one-stop coverage.

“I think everyone has benefitted,” Michael says, and Saul Ewing was no doubt enthused inheriting a number of Bay State titans, among them Harold Brown’s Hamilton Co. and KS Partners, the former a client of JAMES H. SHULMAN JOANNE ROBBINS, ESQ. hers for nearly a quarter-century and the relationship with KS Partners founder Kambiz Shahbazi dating back over a decade, Michael recounts in assessing a 2015 where her services were less in demand at Hamilton Co. whereas Shahbazi’s legal matters were more frequent than most as his team completed a variety of transactions, including multiple CRE acquisitions (see story this section).

Hamilton Co. President Carl A. Valeri acknowledges Saul Ewing has been

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continued on page 162

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Encompass: Why Boston, Why Now?

BY BRENDAN CARROLL OSTON — People are starting to think “The Hub of the Universe” may just be exactly that –and not just people living within the 495 Belt. We’ve had MIT and Harvard here for centuries and the city’s geography and positioning within New England hasn’t changed. So what is the particular set of ingredients that lead us to where we BRENDAN CARROLL are today? Boston is not the victim of rapid corporate consolidation with its “second-fiddle” to San Francisco status in technology that it was in the early 2000s. Encompass is taking a crack at the ten leading reasons, the ten dominant ingredients, that lead Boston to its position today.

1 - THE COLD WAR. Long before the confluence of modern battery life, the touchscreen, digital communications and iTunes, the US Government was by far the largest investor, researcher and purchaser of technologies worldwide. MIT, having been the Government’s largest research contractor during World War II, became super-sized from World War II until the fall of communism in 1989.

The Government spent $9.5 trillion on the development of technology in a “spare no expense” attitude to stay ahead of whatever the enemy was developing on the other side of earth. MIT remained the government’s largest contractor during this period and co-founded many joint operations, such as Draper Laboratories, Lincoln Labs and MITRE. These efforts resulted in the development of many technologies which have been heavily commercialized today, such as GPS, which may not have ever been established if forprofit were the driver right off the bat.

Were wars, and the Cold War, responsible for America’s Technology Highway?

While suburban office clusters developed around nearly all American cities in the period after World War II, the Boston cluster in the western suburbs was notably earlier than most other areas and has carried a prestigious cache not found nearly anywhere else. The reasoning can be traced to a propensity for government wartime research efforts to be located near MIT, but far enough away from campuses and dense areas to stave off distracting protests and other activities.

PHOTO: DEREK SZABO

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2 - MASS COMMERCIAL OVERBUILDING OF THE 1980S. We hope you enjoy the double-meaning here. Commercial overbuilding was both rampant (mass) as well as overwhelmingly notable in the Greater Boston area, with local banks and other lenders particularly aggressive in funding construction projects. While the aftermath was a fatally weakened Boston area banking sector and a national recession, the enormous inventory of 1980s-built space would later prove a boost to the area’s participation in the “tech boom” of 1998 to 2001. The usually expensive region had a large inventory of relatively newly built space available on terms affordable enough to stave off any serious need to relocate to a less expensive market.

How much do we miss our banking sector?

Having been a pillar of the local economy for more than two decades, the weakening and sub-

sequent near complete loss of large local banking headquarters was seen as a blow to region’s civic pride. However, heavy consolidation across the banking industry has left far fewer banks with many jobs shifted to areas with lower costs. The seven million sf of existing space developed for, and at one time occupied by, the local banking sector in urban Boston is now nearly completely used by organizations in other industries, most without the same cost-slashing missions.

3 - $4 GAS. While the 2000s surge in gas prices was not the first time in history average gas prices surged more than 100 percent in just a few years, the confluence of a few items during that time that effectively put the auto-dependent lifestyle on trial for many Americans. Many realized the total experience of car ownership had dramatically deteriorated due to rapidly escalating traffic continued on page 61

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WHY BOSTON? continued from page 60

congestion, rising auto ownership costs, and that high quality alternatives were developing.

One group most eager to adopt this car-free lifestyle proved to be recent college graduates, an increasingly important skilled labor force for whom the ability to forego an auto’s expenses has a meaningful impact on income available for other uses. One beneficiary of this trend has been Boston, for reasons later covered a walkable city, particularly when compared with its west coast technology rival, Silicon Valley.

4 - THE AUTO INDUSTRY While discussions surrounding the auto industry’s practices in the mid-1900s continue a half-century later, the auto industry, and their best friends the tire and oil industries, were not fans of live/work/play environments. Initially touting the freedom a car could provide from urban grime, the powerful and coordinated set of industries made sure the car would be a symbol of the American way of life. The industry’s near-ubiquitous success in establishing the car as the only reasonable method of transit in most American cities, and their near-miraculous failure to do so in Boston, left Boston one of the few walking cities left in the second half of the 20th century.

With current trends wildly favoring cities with substantial walkable living environments, this distinction has vaunted Boston’s competitiveness in recent years (more on transit to come).

The General Motors Streetcar Conspiracy Sometimes lauded as the auto industry’s most aggressive competitive tactic was the wide scale acquisitions of streetcars systems in the United States by General Motors and Goodyear Tire and Rubber Company. From 1950 to 1962, the two acquired a total of 95 systems throughout the country, in most cases immediately shutting down the systems and replacing routes with bus lines, services with dramatically

lower rider satisfaction characteristics. Being viewed as the leader of the trend, General Motors was the only party ever sued by in court, where they were found not guilty of conspiracy in connection with the shutdown of the Los Angeles system, but remained under review of the government.

5 - LOGAN AIRPORT. Boston’s longest-running competitive advantage remains proximity to Europe. While it remains the country’s closest major metropolis to the continent, Logan Airport is also the country’s most proximate airport to its host city’s commercial center – by far! The result is a compounded convenience for European proximity in an age of increasing global commerce. In meaningfully connecting the “Hub” to Asia for the first time, Boston now boasts flights to eight Asian cities, along with 17 in Europe. The only city in North America to have at least that many to each respective continent is … of course, New York City.

6 - THE RED LINE. Everyone loves the Red Line these days. And why not? The region’s most heavily used rapid transit line serves 273,000 passengers per day but also connects the region’s commercial cores with world famous universities, New England’s largest transit hub and nearly every type and level of skilled professional. There may be one often overlooked characteristic here, however … it moves. Board the Red Line and fifteen continued on page 62

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WHY BOSTON? continued from page 61

minutes later you’re five miles away from where you got on. The Red Line’s ability to efficiently move passengers throughout the region and provide a clear advantage over auto and other types of transport during peak times has given it clear favor in the eyes of the region’s users.

When in doubt, look for Red. Not only is our Red Line the busiest heavy rail line in its system, but Red Lines are nearly always the busiest, in US subway systems which identify their lines by color. This holds for the systems in Chicago, Washington, Atlanta, Los Angeles and others. New York’s subway does not refer to its lines by color but its busiest line – the 1, 2, 3 … appears in red on its map.

Want to cross the pond? London’s Central Line and Paris’ RER-A, yes, Hey! Where do the trains go?? The elevated section of the Red Line which crosses the Charles River over the Longfellow Bridge is a prized moment for passengers to steel away some daylight and a nice view of the Back Bay during an otherwise underground eight-mile stretch between Alewife and JFK/ Umass stations. The bridge, which was completed in 1906, was built to accommodate the planned subway but the subway remained unfunded until the 1920s, meaning that the bridge was built with tracks ending on either side into a dead-end. Construction started on the Cambridge subway in the early 1920s and heavy rail rapid transit trains began crossing the Charles River here in 1932.

7 - WWII. Few dispute the current wave of interest in greater Boston as a strategic location was first triggered by competencies in the biotech world.

So why so much interest in biotech? Probably the most lasting impact of World War II was its profound impact on American demographics. During the Great Depression and War, the American birthrate dropped from nearly 3.5 births per 1,000 people per year to about 2.1, for the years from 1931 to 1946. This slowing of the birthrate and subsequent surge, uh, the

Baby Boom era, resulted in an enormous number of people associating with a particular age group. Notably, as people who grew up during the Great Depression tended to be more frugal and modest, Baby Boomers (now 50 to 69 years old) experienced a generally more robust period of economic success and today expect more.

They also control xx% of the country’s wealth and constitute xx% of the its population, meaning both investors and politicians listen to them.

Let’s Get Rectangular While much of the current surge in biotechnology research is to improve the quality of life of baby-boomer aged people, you won’t find a lot of research aimed at helping people to live to 200. “Rectangularization” is a term that has been used which characterizes the attitude toward therapy-based research; the aim is to extend all life to a reasonable expected point and to improve the quality of that life throughout, so as to eliminate any protracted periods of decreased quality of life throughout.

8 - NEW YORK CITY. Those Bostonians who relish the “small-town” feel of their hometown likely have our neighbor to the southwest in mind. Since all things are relative, Boston may feel somewhat small due to its proximity to the city that has been the country’s largest for more than two centuries and is arguably the cultural and financial capital of the world.

Boston is actually the sixth largest consolidated metropolitan statistical area in the country and continued on page 63

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WHY BOSTON? continued from page 62

has been among the largest since the settlement of North America by Europeans, though New York is a very good neighbor to have. As America’s most migrated-to city, NYC is also the most migrated-out of, and those leaving because it is too big or too crazy, frequently look to Boston as an option. It is also a convenient day-trip for those with business from around the world who happen to be just 200 miles to the southwest.

9 - FREEWAY PROTESTS. The building of the Interstate and other highway systems in the 1950s and 60s caused many clashes between elected officials and residents whose neighborhoods were undergoing heavy demolition to make way for the new roads.

Unsurprisingly, those clashes were particularly heated in the Boston area. Then-governor Francis Sargent ultimately placed a moratorium on new highway construction within Route 128 in 1971, after Interstate 93 and the Massachusetts Turnpike extension had been fully built, but stranding numerous freeway projects that had been in various phases of planning and development. The bold move ultimately saved numerous key areas within the urban fabric of the city, and necessitated public agencies maintain commuter rail and other public transit infrastructure which could have been scuttled had Boston become the car mecca at the time it was envisioned.

OMG That Expressway Traffic!!!

While heavy traffic is common on the region’s roadways there is a particular dread of

using Interstate 93 at any point other than in the middle of the night. The problem is real – serving more than 200,000 cars daily, the freeway is region’s busiest, among the most chronically delayed in the country, and is relatively unusual in that it has fewer lanes than roads that carry comparable loads. Why is this freeway special – well, probably for the freeway you see in this picture. The never-built Southwest Expressway, stopped here at the Route 128/Interstate 95 interchange in Canton. The canceling of this freeway has effectively made I-93 do double-duty, with no relief valve in sight.

10 - The T.R. (or maybe T.B.) It could be argued that the New England Patriots’ win in 2002’s Super Bowl XXXVI enabled by their win in the “Tuck Rule Game” may have exorcised some demons and elevated the level of expectations for our other sports teams. However, the effect of the 359 postseason games played by the city’s four professional sports teams is beyond argument. With nearly all those contests featured on national television, the city has been continually and prominently displayed in front of a national audience during a particularly transformational period of the city’s appeal, including the upgrade of the waterfront area, demolition of the central artery and other things. The sports success has also caused a dramatic increase in patronage of the city’s eating and drinking establishments, helping spur expansions in that sector far more robust than seen in other sectors. Growth in food & beverage employment has nearly doubled since 2002 when compared with the prior twelve years, and the sector has now expanded by 52 percent.

Oh, and how have local teams faired in those 359 contests – we’ve won 56 percent of them; a lot better than the 34 percent we won in the 77 contests leading up to the T.R. Game.

All of the sudden – Championships!

Yes, the nine championships enjoyed by area sports teams since 2002 is the most among North American cities – more than double any other city than Los Angeles. Unique on this list is that every team having won since 2002 also won at least one championship in the 19902001 period. u

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Resurgent John McGrail Looking Near, Far for RE

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UINCY—MG2 Group is the streamlined, new-age revision of Mayo Group, the CRE company launched by Irish native John McGrail a quarter century ago this year, and under whatever flag, his has been an eventful career involving a meteoric rise as a leading commercial and residential landlord throughout Greater Boston whose progress was

PRIVATE EQUITY slowed by the 2008 recession, a dead man’s curve for many traveling the CRE trail, including property owners impacted by the resulting credit crunch. Mayo Group was also a major borrower with Anglo-Irish Bank, the Emerald Isle institution whose collapse impacted borrowers throughout the region.

Fortunately, as Real Reporter detailed last year, McGrail is among those having not merely survived the tumult but actually came back stronger, a key development occurring when CMBS lender Cantor JOHN MCGRAIL Commercial Real Estate agreed to refinance Mayo’s holdings, freeing assets from the unfavorable debt accumulated prior to the downturn. As Real Reporter unveiled back in 2013, Goedecke & Co. and principal Sean Herlihy played a JOSEPH DONOVAN major role arranging that game-changing financing first providing a loan for $32 million covering a regional apartment portfolio of 266 units, then $24 million for two Worcester buildings at 50 Franklin St. and 26 Portland St. The re-energized firm has responded positively, as evidenced in a buying spree begun in South Boston three years ago that today has enabled MG2 to make strategic purchases in Lynn and Worcester. Both are markets the firm has a history in, and presently a series of capital improvements projects for those assets is underway, but the company’s future is being bet on East Boston. The gritty, teeming back yard of Logan International Airport across Boston Harbor from downtown has investors following tenants who are suddenly embracing the thickly settled neighborhood which is dominated by three deckers and aging, trash-strewn industrial sites.

1495 HANCOCK ST., QUINCY MA

Action has been centered on the waterfront in Jeffries Point and Maverick Square, at which the MBTA Blue Line is a five-minute trip from Boston’s Financial District in one direction and to the airport one stop north. “We think East Boston is a great market as a whole when you look at the incredible proximity to downtown and what you get for your rent dollar,” says MG2 Vice President Joe Donovan whose firm’s ardor and approach has been similar to South Shore colleague Grossman Cos., that Quincy based investor having teamed up two years ago with whiz kid investor Alexander Hodera to scoop up dozens of two- and three-family properties, the strategy to implement professional management and operating efficiencies that boost income, a platform being employed by rivals across the region, albeit one Donovan warns requires a keen knowledge of a building’s “bones” especially given the area’s aging housing stock.

Having in 2015 launched a construction subsidiary to claim rights as a vertically integrated organization, MG2 went all in growing its

East Boston footprint, with 15 properties now either owned or under agreement there, and more said to be in MG2’s scope, Donovan relayed in predicting the construction aspect will enable further growth of the company portfolio.

Seven of the Eastie 15 were purchased in 2015, including the strategically located 60 Border St., a 30,000-sf industrial building acquired in January for $3.35 million from Wigglesworth Machinery Co., owner since Oct. 1966.

Wigglesworth will remain in the property, but Donovan says long range a residential conversion may be possible that could yield 100 units, pointing to a series of nearby projects of similar scope being developed by major national players such as Gerding Edlen, which is building 259 units at 6 New St., a $132 million undertaking on 3.9 acres the Oregon-based developer acquired in early 2014 through JLL for $7.2 million.

Bank of Canton financed three separate East Boston sales by MG2 in 2015, the first in mid-March when 188 Sumner St was purchased continued on page 65

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JOHN MCGRAIL continued from page 64

for $745,000 with a $756,000 mortgage, then in May $560,000 was loaned on a $600,000 buy of 151 Saratoga St. and in the final days of summer 2015, 69 Cottage St. was acquired for $540,000 backed by a $700,000 note. The Sumner Street asset is a two-family dating to 1910 on a 1,375-sf lot; 151 Saratoga St. is a three-family constructed in 1900 with 3,250 sf on a 1,900-sf parcel; and 69 Cottage St. is a four- to six-unit apartment property with 2,350 sf built in 1920 on a 1,050-sf parcel. In 2016, Bank of Canton delivered a $770,000 loan backed by 4, 6 and 8 Winthrop St. that were acquired at different times, the first 4 Winthrop St., a 3,150-sf four-family home bought for $715,000 in December; and the other two in early 2016.

Bank of Canton and Hingham Institution for Savings are among a number of lenders, mostly banks, who have relationships with MG2, with others including East Boston Savings Bank, MountainOne, Northern Bank & Trust and South Coastal Bank. Commonwealth Cooperative Bank funded last September’s $555,000 purchase of a 1,550-sf commercial property at 303 Sumner St. in East Boston with $440,000 and loaned another $1.08 million on 37-39 Lamson St. this March, that a 3,575-sf three-family constructed in 1900 on a 1,700-sf site.

Elsewhere ala Bruce Percelay and his award-winning Green District in Allston (that yielded $147 million in a sale of roughly half that property in 2015), MG2 has commited to revamping a specific part of downtown Worcester, New England’s second largest city where McGrail over the past decade has created a melange of housing, office and retail space appealing to the millennials. The five-acre GRID District, as it has been branded, features MG2 holdings of 510 residential units, 60,000 sf of retail, 300 parking spaces and mixed-use development potential of 350,000 sf.

“We are trying to create an urban village atmosphere that provides all of the (aspects) of a LIve, Work Play (environment),” Donovan explains, with Worcester’s large number of colleges and universities whose student body collectively exceeds 38,000 among the elements enticing MG2 to make such an extensive investment. MG2 is working to lease up the retail space and conducting a “rolling unit upgrade” of the residentail units. “We are very comfortable with what is happening in downtown Worcester, and we expect to be there longterm,” Donovan reports.

MG2 also sees better times ahead on Bos-

23 CENTRAL AVE., LYNN MA

ton’s North Shore in Lynn, a city ravaged by poverty over the decades but one also infused with enough federal and state funding to make it an area many feel is poised for a comeback as even more renters deem the inner suburbs and downtown Boston too pricey.

“

We are very comfortable with what is happening in downtown Worcester, and we expect to be there long-term.

”

Joseph Donovan, MG2 In virtually all of their investments, MG2 is following a pattern gaining in popularity to cluster assets near superior public transportation. There are plenty of ways to get out of Lynn, either by auto down the Lynnway or Route 107, or from a litany of public transit nodes, including buses direct to Boston and the MBTA Blue Line plus the commuter rail approximately a half-hour from North Station. “It is a natural as an alternative to paying Boston rents,” says Donovan.

The most ambitious undertaking by his firm there is an overhaul of 23 Central Ave., the socalled Flatiron Building now under “full-blown construction” to create 49 residential units and 3,500 sf of retail, that space being marketed for a restaurant use.

Transit is a key factor that brought MG2

from its former base in South Boston to downtown Quincy in the 34,000-sf office building at 1495 Hancock St. where it is now headquartered. The Red Line that connects with Braintree to the south and more importantly Boston and Cambridge in the opposite direction has given new life to the city of Presidents whose Quincy Center features a major Red Line station around which Donovan says many good things are in the offing, opining that an outside group’s failed plan to overnight transform the center with $2 billion of development was perhaps overly ambitious but not lacking in merit towards the venue’s future promise.

“We are very bullish on Quincy,” says Donovan. That is not to say they are abandoning the Hub where McGrail once owned substantial assets. Just recently, the firm plunked down $9.1 million for a 116-year-old Back Bay brownstone at 223 Marlborough St./11 Exeter St. that has 10 units totaling 12,200 sf. Hingham Institution for Savings funded that endeavor with a $9.9 million mortgage. That same lender financed an $800,000 purchase in Jamacia Plain last September with $1.08 million to buy 319 Forest Hills St. a three-family residence totaling 3,600 sf on a 5,575-sf parcel across from the Arnold Arboretum.

“The Back Bay is great, but it can be expensive,” Donovan says of the purchase there where MG2 is using the construction division to create cost savings as renovations to the building are undertaken. The asset is on the sunny side of Marlborough St. and has two entrances, both appealing to tenants, he observes. “It is u really an ideal building,” Donovan says.

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Jumbo Lives Up to Name as Expansion Continues

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UINCY — The stepping-up tranch among homegrown private equity funds could be headlined by Jumbo Capital, a firm which made incredible strides in 2015 after steadily climbing the ladder each year since being founded in 2009 with a hyper-local footprint similar to that of the incongruously named National Development. Found-

PRIVATE EQUITY ers Howard Hirsh and Jay O. Hirsh are from the clan which ran Copley Pharmaceuticals before selling that and turning their attention to commercial real estate and this past year they were joined by veteran real estate broker Brad Spencer as a principal.

Following up on a busy 2014 when the firm spent in excess of $87 million on a quartet of separate office buildings from Andover to Quincy, Jumbo Capital landed the well-regarded 150 Royall St. in Canton MARK ROTH off Route 128 in spring 2015 for a consideration of $58 million to owner/ occupant One Beacon Insurance, which had renovated the building in 2007 and consolidated regional operations in the two-story, 263,000-sf structure MARK MALATESTA that Jay Hirsh calls “the most amenitized building I have ever seen,” features including an interior courtyard with 30-foot trees, indoor walking track and 7,900sf fitness center rivaling the likes of Equinox.

“It’s an excellent building on a street with some super companies,” Jay Hirsh says, pointing to other Royall Street tenants as Dunkin’ Donuts, Boston Mutual and Reebok. Jumbo Capital was further piqued by sustainability elements, including a solar array on the 20-acre complex. “I have always been a big believer in green practices,” he says, so much the firm is eyeing whether the solar aspect can be expanded at 150 Royall St. The building is fully leased to two firms, including One Beacon filling 41,200 sf and an international construction and engineering company serving as anchor tenant. The Canton address expands a suburban portfolio that includes the Andover Research Center at 3 Riverside Dr. in Andover (91,000 sf); 100 Crosby

150 ROYALL ST., WESTWOOD MA

7/57 WELLS AVE., NEWTON MA

Dr. in Bedford (255,000 sf); and 1900 Crown Colony Dr. in Quincy (136,000 sf), all of those acquired in the 2014 season.

“

It’s an excellent building on a street with some super companies.

”

Jay Hirsh, Jumbo Capital, on 150 Royall St., Canton

Already in 2016, Jumbo Capital is proving its ability to step up its game for the third straight year, having opened the season via the purchase of a three-story office building in Rockland from Grossman Cos., then paying $62.3 million in partnership with Angelo, Gordon & Co. on a pair of first-class Newton office buildings at 7/57

and 75/85/95 Wells Ave. Real Reporter was first to unveil in January that the two firms had the listing exclusively marketed by HFF under contract with seller Normandy Real Estate Partners, with the deal then consummated in March after which Jumbo/Angelo unveiled an ambitious plan to upgard the 330,000 sf of product in anticipation of upcoming lease rollover.

“We are very excited about those buildings,” says Jay Hirsh, both for the assets and their location at Exit 45 off Route 128. “I really like that exit a lot,” he says. “There are a lot of great projects there and some excellent companies we have not had a lot of exposure to, so we feel really good about what we can (accomplish) there fairly quickly.” Having retained veteran suburban brokers Mark Roth and Matthew Malatesta from Newmark, the Jumbo/Angelo JV is already putting the word out to potential tenants, and Jay Hirsh says the response heretofore has been encouraging, with multiple showings weekly. u

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Flexible Ferris Development Dealing in New CRE Realms

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ARLBOROUGH — Ferris Development Group has been going strong in the MetroWest ever since namesake David Ferris adroitly acquired 325 Donald J. Lynch Blvd. in Marlborough and all its contents to boot during the darkest days suburban Boston’s office market has ever endured. The 77,000-sf building that today serves as his company’s headquarters

PRIVATE EQUITY had been home to an insurance company that went under and left the well-appointed property vacant for five years and available for a mere $2 million. That Aug. 2010 sale orchestrated by Scott Hughes of New Dover Associates served as a launching pad for Ferris to begin his real estate empire, a portfolio that in 2015 expanded to the heart of Route 128 while continuing to increase its holdings farther west where FDG had paid a mere $21.5 million in February 2014 for the landmark One Research Dr. campus that had fetched $55.5 million in Oct. 2005.

Totaling 285,000 sf, the DAVID M. FERRIS building on 24 acres was at 50 percent leased when FDG took over, but the firm struck gold a few months later when Sanofi/Genzyme leased 114,000 sf and then expanded to bring the building to full occupancy.

The purchase and lease that Ferris credits largely to Transwestern RBJ principal John Lashar also created enough mass for FDG to build an integrated platform with in-house leasing and management staff that enabled the firm to step up its operations last year and draw the interest of new capital and debt sources.

Having stabilized One Reserach Dr., Ferris doubled down in Westborough by purchasing 4 and 8 Technology Park Dr. through the Pergola/ Doherty Capital Markets team which was then at DTZ prior to joining CBRE/NE last summer.

Totaling 222,450 sf, Ferris paid $24.4 million in April 2015 and financed the two low-rise buildings with $15.5 million through Middlesex Savings Bank. The investment was less of a value-add play given the buildings were 98 percent leased when acquired and “in excellent condition with minimal capital improvements needed.”

Having expanded and extending one of its largest tenants prior to acquisition, Simplivity, FDG was able to add value and increase revenue “from Day One,” the firm notes in analyz-

4 AND 8 TECHNOLOGY PARK DR., WESTBOROUGH MA

ing that purchase, a holding expected to deliver returns starting this year between 10 and 12 percent, the synopsis calculates. The seller was a California employee retirement system which had held the buildings since May 1998 under Gateway Sherwood Inc. The buildings are located in Westborough Technology Park where 4 Technology Park Dr. came on line in 1991, four years after its companion asset opened for business. Amazon .com is on the tenant roster, along with other companies including Homeward Residential and Valueclick.

Making the firm’s inital foray onto Route 128 one month prior to the 2015 Westborough closing, FDG’s in-house repositioning team and construction partners “hit the ground running” during due diligence so they could begin an extensive capital improvements campaign immediately upon the closing which occurred in early March 2015, the $22.2 million deal initially detailed by Real Reporter in its Jan. 23 2015 issue. Middlesex Savings Bank was in on that purchase as well, providing $15.9 million to facilitate the acquisition and renovations. The seller is a partnership of Charles River Realty Investors and Crosspoint Associates.

Near-term lease exposure required such a rapid response, Ferris explained later, with the overhaul including base building work, new frames, windows and roofs plus improvements to the common areas and restrooms. Updated amenities and the speedy turnaround are credited for helping rents grow 10 percent already from acquisition underwriting and improve asset value by 30 percent, leading the sponsor to schedule “significant returns” for investors commencing next year.

“It has been a fantastic asset for us,” recounts Ferris, now commanding per-sf rents in the low $30’s, which he says is a good compromise for companies in a market where some product is leasing well into the $40s. “It is quality product that is relatively affordable,” he says.

But while FDG has concentrated on the office arena, and intends to hold One Research Dr. long-term, he stresses the firm is branching out into other product types, as evidenced in the purchase this year of a five-lot residential parcel in Brookline that was shovel-ready when an off-market opportunity gave the firm a chance to buy it well below its original asking price. continued on page 71

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Grander Capital Grows Portfolio from MA to VA

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n the firm’s fourth year, Grander Capital Partners has already established itself from New England to the mid-Atlantic as an investor able to get deals over the finish line, including 110 Shawmut Rd. in Canton bought for $5.9 million in the final days of 2014.

The 2015 campaign was no different as the Newton-based operation paid $12.9 million

PRIVATE EQUITY for 600 Federal St. in Andover in May and another $13.2 million last October to secure 825 Washington St. in Norwood from Guild Place Nominee TR. The latter asset is a medical office building which the sellers had paid $1.5 million for in Jan. 1984; it was acquired

by GCP Guild LLC. GCP took over 600 Federal St. from a partnership of Leggat McCall Properties and Long Wharf Real Estate JEFF CLARY Partners. It is a multi-tenanted office building totaling 115,000 sf leased to Polycom and Schneider Electrict. The buyer was already familiar with the neighborhood, having bought 300 Federal St. for $6.1 million in April 2013. In the 2015 TED NORBERG agreement, GCP used Boston Private Bank & Trust Co. for an $18.6 million mortgage backed by both 300 and 600 Federal St., with another lender having provided $6.6 million for GCP to buy 300 Federal St., that structure totaling almost KATHLEEN KUSIAK 120,000 sf.

Interestingly, GCP has a substantial portfolio in the Richmond, VA area, and in 2015 added to that with the $5.1 million purchase of a 55,000-sf office building in Forest Office Park, its sixth asset in that city. GCP is not alone targeting the Richmond area, with a market report citing numerous out-of-town buyers flocking there of late, including none other than the Davis Cos., the well-known Boston-based investor which in 2015 bought an apartment community in that city.

Already in 2016, Grander Capital has enhanced its suburban Boston presence beyond the 2015 growth, paying $6.8 million for 2300

600 FEDERAL ST., ANDOVER MA

825 WASHINGTON ST., NORWOOD MA

Crown Colony Dr. in Quincy at Crown Colony Office Park. The firm founded in Jan. 2012 by Jeff Clary and Ted Norberg is no stranger there, either, having paid $16.0 million in Dec. 2013 for 300 Crown Colony Dr., and Norberg told Real Reporter after the latest conquest that his company is even more confident in that area than before, with the last three years seeing fundamentals improve markedly, partly due to rising rents in Boston that are driving tenants south “We are drawing from both directions,” Norberg relays, explaining South Shore compa-

nies aiming to boost their profile by being closer to the urban core also creating tenant traffic.

GCP’s new Crown Colony asset has 45,000 sf on three floors leased to multiple tenants, whereas 300 Crown Colony Dr. is a five-story building with 118,150 sf. Other regional GCP holdings are in Billerica and Needham. Besides the two founding principals, Kathleen Kusiak is another partner at the firm and member of its investment committee. GCP’s platform is focused on value-add opportunities in the industrial and office sectors in large, established metropolitan centers along the East Coast. u

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Marcus Partners for 2015: Fund I Sales, Fund II Buys

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OSTON — For a spell, Marcus Partners was in a selling mood during 2015, harvesting three Atlanta buildings— its entire portfolio there—plus single assets in Connecticut, New Jersey and New York while locally cashing out on 111 Speen St. in Framingham, the colorful first-class office building adjacent to the Massachusetts Turnpike which

PRIVATE EQUITY sold in April 2015 to TA Associates Realty for $22.7 million in a deal negotiated by Eastdil Secured. That compares to $14.5 million spent on the 115,000-sf property in June 2013 on behalf of Marcus Capital Partners Fund I. “It is a great building, and we hated to see it go, but we think (the outcome) speaks for itself,” founder Paul Marcus told Real Reporter last spring, his firm having spent $1 million to gussy up the building that turned 30 under its watch. A lease-up campaign further enhanced value prior to the trade which was orchestrated by Eastdil brokers Brian BarPAUL MARCUS nett, Peter Joseph, Sarah Lagosh, James McCaffrey and Christopher Phaneuf.

Marcus does accede the fickle nature of real estate which enabled his firm to deftly make profitable choices in shakier times has now been replaced by an environment where a surge of capital is pushing prices upwards, and while Marcus Partners in 2014 launched a new fund focused on the Northeast to Washington DC that made several 2015 acquisitions, he says the climate made it ripe to let go of buildings secured by the firm’s inaugural investment vehicle.

“We felt the market was getting pretty hot, and we thought it would be the right time to lighten our load, and that is what we did,” he says. It began in March with the sale of a 73,000-sf mixed-use property in Norwalk CT acquired in June 2011 as part of a three-building deal; the other two in the West Avenue Portfolio had been divested in 2014.

In mid-year 2015, Marcus said goodbye to 6 Armstrong Rd. in Shelton CT and Eagles Landing in Stockbridge, GA, the former a 175,000-sf office building held since 2012 and the latter an 80,675-sf medical office asset purchased one year prior. The trend has continued in 2016 via a March sale of 8 King Rd. in Rockleigh, NJ, that 191,000-sf office property purchased in May 2013 and repurposed into a state-of-the-art life

111 SPEEN ST., FRAMINGHAM MA

PARK PLAZA II, 2099 GAITHER RD., ROCKVILLE MD

sciences facility that is 100 percent leased on a 15-year pact. In May, a 386,875-sf industrial building at 297 State St. in North Haven, CT was traded five years after its purchase.

On the flip side, the $250 million Marcus Real Estate Fund II was on the prowl for new deals, with closings including 130,000 sf of office space in the metro Washington D.C. market, inventory in a pair of “sister buildings” that had separate ownership, one a special servicer.

In June, Marcus Capital Partners Fund II announced it had bought 2099 Gaither Rd. in Rockville, MD, the 264,275-sf asset known as Park Plaza II close to public transit and sever-

al key highways. Dating to 2001, the building has modern architectural details including roof decks on the top two floors, a fitness center and covered parking. Marcus promoted the asset as having one of the largest available blocks of first-class space currently available in the North Rockville submarket.

Separately, the fund secured 130,000 sf at 2001 Route 46 East, aka Waterview Plaza, in Parsippany, NJ, giving Marcus some 800,000 sf in the Garden State. The firm infused $2.6 million into the property “to visually and functionally transform” the building into a boutique first-class asset. u

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MARIC CRE Sales Hit $45M as Firm Moves to Sidelines

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EEDHAM — There is something to be read from real estate investor MARIC Inc. staying on the sidelines in 2015 and thus far in 2016 while selling a handful of assets in Andover and Westwood, and the story involves principal Mark H. Rubin’s trouble finding CRE opportunities whose basis is in line with the firm’s own assessment.

PRIVATE EQUITY “We have not stopped looking, but I do think prices are very high . . . and we want to make sure we do not lower our standards just to do a deal,” he tells Real Reporter in describing the search process to “looking for a needle in a haystack” and providing a sense that the extended boom cycle could be coming to a halt. “As far as I know, the business cycle has not been repealed,” JEREMY FREID, SIOR he observes, adding, “as they say on Wall Street, you can’t fight the tape.”

On the flip side, the frothy climate did provide a positive backdrop in divesting the remainder of a six-building office park in Westwood that MARIC PETER JOSEPH acquired in 2007 just as the investment cycle then was cresting. When the recession rocked suburban Route 128 and pro forma rents did not materialize, his Needham-based firm tried to keep the assets stable while pursuing a KERRY OLSON HAWKINS possible rezoning of the park as mixed use. Then came “Exit Plan C,” one Rubin says he had not considered until a bit of math determined more value could be accreted by selling the buildings individually, feeding off a low-interest rate environment and desire among companies to own versus rent.

“It wound up being a very successful exit strategy,” Rubin recounts of a process that took almost two years to complete and yielded a result of $13.37 million total, the last sale occurring this February when 21-25 Southwest Park brought $1.9 million. Boston Realty Advisors formulated and executed the program which saw four of the six assets change hands

NEW ENGLAND BUSINESS CENTER, ANDOVER MA

in 2015 for an aggregate of $9.24 million. BRA principal Jeremy A. Freid, SIOR, championed the program with colleagues Adam Meixner, Jordan Sneider and Tyler Griffin. In early June 2015, 28-30 Southwest Park and 20 Southwest Park were sold to separate owners for the same consideration of $2.07 million each, followed by the mid-September trade of 34 Southwest Park,

“

We want to make sure we do not lower our standards just to do a deal.

”

Mark H. Rubin MARIC Inc.

that a $1.76 million exchange. The priciest of the half-dozen transactions was $3.34 million for 33-35 Southwest Park, that asset closing in December. The February trade to Scott Ravelson of $1.9 million involves an 18,000-sf structure, with BRA procuring the buyer in that agreement.

“I really applaud Mark for taking a chance and going in that direction,” Freid recounted to Real Reporter upon the final sale’s conclusion. The result seems favorable in light of the $10.1 million Westwood Cloverleaf LLC spent in March 2007, particularly after being able to keep the properties filled despite the tough environment. The assets totaled 102,000 sf, equating to an average per-sf rate of $131, with the range from a low of $108 per sf up to a healthy $164 per sf, the apex being 34 Southwest Park which has 10,775 sf.

The February Westwood sale was an all-cash transaction, but the other buyers engaged several lenders including Bank of America, Boston

Private Bank & Trust Co. Dedham Institution for Savings, First Commons Bank, New England Certified Development Corp. and Walpole Co-operative Bank. “I think everybody got something from this,” Freid says, including his client. “They did a nice job sticking to the plan, and I’m really happy how it turned out for them.” Besides BRA, MARIC principal David Gillies is credited

by Rubin for guiding the multi-faceted strategy over three calendar years.

Gillies gets even more kudos regarding MARIC’s other big trade that occurred this spring when New England Business Center was divested to an abutter for $32 million after picking it up in Dec. 2012 for $20.3 million. “David sourced that deal and convinced us it was a great opportunity, and then he was the operating partner who really was able to get everything we needed done there, and we are really grateful for his work on it . . . he deserves a ton of credit.”

Rubin is also effusive about the CBRE/NE leasing team that helped address 142,000 sf in empty space at the four-building complex and also assisted when struggling technology company Blackberry rapidly devalued and needed to rework several leases at the park, an effort the landlord was able to accommodate and make the park less dependent on that (erstwhile) big fish which does still occupy space at NEBC. The leasing campaign was led by Kerry Olson Hawkins, a CBRE/NE First VP declared by Rubin to be “the best leasing broker I have ever worked with.”

It was a true pleasure working with her,” he says, citing the broker’s coverage of metro Boston’s northern suburbs and her other professional skills. “Nobody gives a better tour than Kerry—she hits on all the right issues at just the right time and really helps (prospective tenants) understand what the property has to offer.” At continued on page 71

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MARIC CRE SALES continued from page 70

the time of its sale, NEBC was over 90 percent occupied by tenants including Old Republic Title Insurance and Vanasse & Associates.

Besides incorporating a capital improvements program at NEBC, Rubin says he believes the results were from an accurate assessment of the submarket as favorable to properties catering to small- and mid-sized companies, with much of the substantial vacancy in I-495 North found in large structures less amenable to a firm of up to 15,000 sf. “We accurately predicted that was where a lot of the leasing demand would be found, and it paid off for us,” he says. “That was a really great deal in the end, but we had to overcome some pretty serious obstacles to get it done.”

Eastdil Secured brought the program to a solid result in identifying the Andover Cos. as winning bidder for NEBC and its assemblage of 244,000 sf on 42 acres. That crew included Brian Barnett, Peter Joseph, Sarah Lagosh and James McCaffrey and Steffen Panzone. Eastdil declined comment on the assignment. The An-

SOUTHWEST PARK, WESTWOOD MA

dover Cos. reportedly acquired NEBC as an investment versus for expansion of its operations next door.

As for MARIC, Rubin would not rule finding another NEBC, but does stress his firm is remaining steadfast in not overextending its tar-

FERRIS DEVELOPMENT continued from page 67

Foundation work is already underway on that venture, which actually hearkens back to a field FDG was doing back in the late 2000s before catching the office market bug.

“We can pivot to any asset class where we see opportunities, and that is a real advantage in finding deals that provide high returns,” he says, noting many funds are restricted to a specific investment. FDG is also in the process of expanding to other markets, including the Southeast, and is garnering further revenues by offering its in-house construction crew out for third-party assignments, such as office fit out.

“We’re excited about that,” says Ferris, noting the rising number of new leases in play.

Yet another approach is to be aggressive on terms if the company determines an investment is worth the risk, as in the case of the Brookline deal where they paid all cash and in 30 days with no contingencies. “Better terms can get you some real discounts,” he says. And while his booming financial services company that services some of New England’s wealthiest families has ballooned to over $500 million in assets managed, with many of those clients buying into the real estate platform, Ferris says the backbone of his firm’s approach is to ensure a deal makes sense at the outset. “For us, it is risk first, return second,” he says. “You have to make sure the numbers work.” u

1440 Main St., Waltham MA

get pricing. “Discipline is critical,” he says. The firm has a limited geography that has dabbled in Connecticut, Rhode Island, Washington D.C. and southern Florida, though he says the preference is to be within close driving proximity to its holdings. u

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Fairlane Taking its Time After Chapel Street Sale

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EWTON — Fairlane Properties got ahead of the inner suburban renaissance with its July 2007 purchase of the Chapel Street Business Center outside Newton Corner, and in 2015 the firm was rewarded with that foresight in harvesting the 81,625-sf complex at 59-83 Chapel St. to an affiliate of KS Partners which shelled out $11.3 million in an

PRIVATE EQUITY October deal negotiated by the David J. Pergola/ Brian R. Doherty Capital Markets team then at DTZ and now at CBRE/NE. “Michael did an excellent job with the building,” Doherty said later in pointing to occupancy at 91 percent when put up for sale, partly from carving out a portion of the complex for co-working space, an increasingly popular concept Doherty terms “a very creative and pioneering concept no one else was doing when he came up with it.” Fairlane MICHAEL GRILL also worked closely with municipal officials in Newton and abutting Watertown to promote the Pleasant Street corridor close to Chapel Street which is seeing an influx of young startups and promising technology companies.

HILLARY BROWN Fairlane made another announcement this spring when it hired Cushman & Wakefield to divest a pair of Interstate 495 office buildings whose anchor tenant Setra Corp. just signed a long-term lease for all of 159 Swanson Rd., a commitment Grill recounts Fairlane had been working on “since Day One’ after buying that building and 159 Swanson Rd. for $18.3 million in April 2012. “We did what we set out to do, and now it is time to take advantage of the (value creation),” says Grill, with market watchers anticipating the 203,000-sf park could eclipse $20 million. The C&W Capital Markets team of Peter Joseph, Brian Barnett and Steffen Panzone is overseeing that process.

A natural tendency might be for the seller to roll capital accrued from Chapel Street and Swanson Road into new assets, but while Grill says he has been trolling Greater Boston for new opportunities, pricing is reaching a level where he has seen shrinkage of viable prospects, especially the sort Fairlane has come to be known

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for as the company led by Grill and Hillary Brown approaches its 20th anniversary in 2017. Targeting knowledgeable lhomegrown investors for the company’s acquisitions with a hyper-local footprint, Fairlane through the years has delivered some impressive results, pointing on its website to IRR’s of 17.4 percent and 18.9 percent on Hub office buildings sold at 15 Broad St. and 98 North Washington St., with even more dramatic results coming from 33 Broad St. (31.1 percent); 313 Washington St. in Newton (40.7 percent); and 41.1 percent when it harvested 112 Water St. in Boston in July 2003 at a consideration of

$4.2 million after a six-year hold begun in its $1.86 million purchase in June 1997.

Not having a fund to feed, Grill says he is content to service the firm’s remaining portfolio and also provide other real estate services on a third-party basis, one example being a 13,000sf lease Fairlane negotiated at the China Trade Center in Boston’s Chinatown. “We have plenty to keep us busy,” he says. The chief concern, he outlines, is a fear that the cycle may be nearing its end. “I prefer to wait until after the market has peaked,” he says. “That is when the best opportunities are out there, not when it is at the top.” u

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She notes projects such as Boston Properties’ development of a new residential tower and an office tower on top of a multi-level podium connecting North Station and the TD Garden to Causeway Street. Boston Properties is doing this development jointly with Delaware North.

The project’s first phase is a $285-million, steel-and-glass tower called Champions Row, which includes a transportation hub, a Star Market grocery store, a 20,000-square-foot sports bar that can hold up to 500 patrons, a 50,000-sf entertainment venue that could seat up to 1,000 people, a movie theater, a bowling alley and additional retail space.

Then there’s the move by Simon Property Group, owner of Copley Place, to expand the retail at Copley Place while adding a residential tower. The proposed expansion includes construction of a 52-story residential tower over the existing Neiman Marcus building, including 680,000 square feet of new residential space with 550 housing units.

Goulston & Storrs’ legal work last year also included handling the $359 million sale by Morgan Stanley and BGI of the now under-construction Seaport Square project to WS Development.

“That was a very big, very visible deal,” says Horwitz. The firm also represented DivcoWest in its nearly $300 million acquisition last year of the mammoth NorthPoint development site in East Cambridge from Canyon Partners Real Estate LLC. HYM Investment Group had been tapped as development partner in a pact negotiated by JLL that proved among the Northeast’s largest of 2015 in terms of development potential.

All in all, Horwitz says those and other deals kept her firm so busy that Goulston & Storrs had to recently add 14 new real estate attorneys to its roster. “Last year was incredibly busy,” she

says. “Our real estate practice is now bigger than all the other practices at Goulston & Storrs.”

Other firms were also prospering last year.

Robert Carney and Joshua Bowman, both of Sherin and Lodgen, say commercial activity was going full-speed for most of last year—and in all categories. “Everyone was quick to pull the

“

Boston is as hot as it has ever been. There are bidding wars.

Things are moving very fast.

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Thomas Phillips, Real Estate Chair Brown Rudnick LLP

trigger,” Carney, chair of the firm’s real estate practice, says of fast-paced deal making. “From a legal perspective, that meant a lot of coordination on deals. Deals were more complex due to more players being involved.”

In particular, the hospitality sector has been

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huge for Sherin and Lodgen. Both hotel and restaurant clients needed help with various matters. Some included nightclub transactions, such as representing Big Night Entertainment and its 32,000-sf deal to be within the new Seaport Square project.

Sherin and Lodgen was also heavily involved in Crosspoint Associates massive sale last year of its 10-building office portfolio, in Boston’s Fort Point Channel to Invesco Real Estate Advisers for over $180 million, a CBRE/NE listed portfolio whose trade was first unveiled in Jan. 2015 by Real Reporter. Sherin and Lodgen was counsel for another blockbuster 2015 trade, the New England Teamsters pension fund’s sale of 131 Dartmouth St. in Boston to TA Associates for $315 million, that another JLL assignment.

Real estate activity wasn’t just busy in Boston. The suburbs and even western Massachusetts saw strong real estate gains last year.

Sherin and Lodgen’s Bowman says the hotel industry was active last year with such deals as the Montreal-based Lixi Group’s $20.7 million acquisition of the Residence Inn by Marriott Boscontinued on page 74

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ton Andover in Andover. The Sherin and Lodgen team, led by Bowman, represented Lixi Group.

In western Massachusetts, Bowman also pointed to last year’s opening of a new 95room Hilton Garden Inn in Pittsfield, a new hotel expected to serve the gradually rebounding Berkshire County economy. Sherin Lodgen represented the developer, Prem Management LLC. “We were so busy throughout last year,” says Bowman. “There was no let up at all.” Not surprisingly, many lawyers routinely crossed paths last year on deals. Will Wilson, co-chair of the real estate practice at Greenberg Traurig LLP in Boston, explains THOMAS PHILLIPS his firm represented Invesco Advisors in its 10-building Fort Point office portfolio purchase from Crosspoint.

Indeed, Invesco was busy in other deals, too, including its purchase last spring of 226 Causeway St. for a reported $91.7 million. In ROBERT CARNEY declining to discuss specific projects, Wilson says for his firm, “it was a busy year— we had a lot of volume.”

Brown Rudnick’s Phillips says a number of his firm’s clients were going like gangbusters last year, such as Calare Properties, DAVID B. CURRIE the Hudson-based real estate investment firm whose specialty is industrial product, one of the most sought-after assets in suburban Boston these days. Among its deals, Calare last year bought a three-building portfolio in the Campanelli Business Park in Middleborough for $25.4 million. The three buildings total 273,000 sf and include industrial/flex and warehouse space. Calare also last year bought the vacant 480 Paramount St. in Wrentham, another industrial property, and then later quickly leased it out. (See related story, this issue).

On other matters, Brown Rudnick last year represented the new owners, and planned redevelopers, of Maynard’s historic Clock Tower Place, the former home of Digital Equipment Corp. Saracen Properties and Artimus Real Estate, the owners, have high hopes of reinvigorating the old mill building with renovations and new tenants.

“It’s a big, high-profile project and very exciting,” says Phillips of the Clock Tower project.

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Another high-profile project and deal last year was the sale by Florida-based Starwood Land Ventures, represented by Brown Rudnick, of the undeveloped land at the former South Weymouth Naval Air Station to LStar Management of North Carolina. As master developer, LStar is effectively planning a “whole new town” at what’s

“

Our real estate practice is now bigger than all the other practices at Goulston & Storrs.

”

Deborah S. Horwitz, Co-Chair G&S Real Estate

now called the Southfield redevelopment site in Weymouth, complete with residential, retail, office and other components, Phillips says.

Brown Rudnick has also been involved with matters related to the proposed Wynn Resort casino in Everett and MGM casino project in Springfield.

All in all, the entire Greater Boston commercial real estate market is humming like never before, says Phillips. “There’s incredible competition for profits,” he says. “It’s a great time to sell.”

David Currie, a partner in the real estate practice at Choate Hall & Stewart, says it was full-steam ahead for most real estate lawyers in 2015. “It’s one of the most active years I’ve seen – and I’ve been around since 1988,” says Currie. “It’s strong across all markets.”

And sometimes it took great creativity, flexibility and even patience to get deals done, de-

spite the hectic pace set by the market last year.

Currie points to one deal involving a property with a hotel and two retail buildings, located next to the South Shore Plaza in Braintree. The client, Bierbrier Development Inc., only wanted to buy the retail component. So the ownership trust, affiliated with Carpenter & Co., agreed to divide the overall property into separate condominium parcels, allowing Bierbrier to buy only the retail “condominium” without the hotel component.

Similar commercial-condo deals have been done in the past, but only occasionally, says Currie. “It was a kind of creative solution to get the deal done,” he says. “People need to be creative in this market.” Another creative deal forced by last year’s somewhat frenetic market was EMD Millipore’s initial, unsuccessful attempt to find existing space for a new headquarters in the area. In the end, it opted to sign a 280,000-square-foot, build-to-suit lease with the The Gutierrez Company at Burlington Summit, an office park at 400 Wheeler Rd. in Burlington. It was the biggest life-science transaction to date in Burlington, so game-changing it won the Greater Boston Real Estate Board’s Suburban Office Deal of the Year for 2015.

As for general trends last year, Currie says he is impressed with increased international investor interest in Boston. They include players from Europe, China and South America. “Companies want to be here, so investors want to be here,” he says. “Boston seems to have recently stepped up a notch in terms of interest by international investors. Foreign investors are challenging and interesting to work with.”

Bernkopf Goodman LLP’s Eric Allon called 2015 a “banner year.” Among the deals his continued on page 75

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real estate team worked on last year was Clarks Americas Inc.’s decision to move its headquarters from Newton to the old Polaroid property along Route 128 in Waltham. In a build-to-suit deal, Boston Properties is leading the redevelopment of a dilapidated Polaroid structure into a gleaming new 125,000-square-foot headquarters for Clarks, a footwear company represented by a team from Bernkopf Goodman.

Allon praised all the lawyers in that deal, on both sides of the transaction, for working long and hard hours together to make the transaction work. Indeed, Allon says real estate attorneys across the region are working together better, knowing that deals are moving fast and cooperation is key.

“Everyone is really rolling up their sleeves and getting the job done,” he says.

Robert Buckley, who specializes in land-use development at Riemer & Braunstein in Boston, says the biggest trend he has seen in recent years is how towns and municipalities are now more open to JAMES HANRAHAN mixed-use developments, rather than their past practice of preferring mostly single-use zoning for properties.

“People are getting the idea that one shoe doesn’t fit all sizes,” he says, noting new developments and DONALD G. LUSSIER redeveloped properties are now getting approvals for a mix of uses and amenities, ideally located near transit hubs. Officials are also starting to appreciate the need to couple those real estate moves with workforce training to help residents find work at newly developed or redeveloped sites, he says. In recent years, Buckley noted he has been involved in real estate legal work at a number of dynamic projects, including the Market Street project in Lynnfiled, the old Polaroid site in Waltham, Northwest Park in Burlington and Westwood Station in Westwood.

He is also involved with, or closely monitoring, major developments and redevelopments in Woburn, Marlborough and other towns. “I see this repositioning of properties continuing right through 2016,” he says.

James Hanrahan, managing partner at Bowditch & Dewey LLP, says 2015 was “remarkably robust in so many ways” for his firm and other attorneys in the commercial real estate

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sector. At Bowditch & Dewey, the firm’s bond finance, leasing and permitting groups were all busy last year, he says.

Among the deals his firm has worked on recently was the financing component of Related Beal’s push to build 239 units of affordable housing near the Zakim Bridge in Boston, an unusual move in a downtown market better known for construction of luxury residences.

Hanrahan says his firm is working for all types of clients: Corporations, banks, developers, colleges, charter schools, museums and a slew of other non-profits.

Don Lussier, a partner at Pierce Atwood LLP, says 2015 was “simply the strongest year in a long time.” “It was firing on all cylinders,” he says. “It was hard to keep pace.” The biggest trend that he saw in 2015: the incredible rush by investors to buy suburban “value add” multifamily properties that might be underperforming and later brought up to speed. The only problem: Such multifamily properties are so hard to find. “The environment is incredibly competitive,” he says. “Investors can’t find products that aren’t overbid.”

Another area that’s hot: Industrial proper-

ties. “I know a lot of people who bid on multiple deals and came away disappointed,” says Lussier. So will the momentum from 2015 carry over well into 2016? That’s the big question many commercial real estate attorneys are asking.

Buckley says people were getting nervous going into 2016 about stock market turmoil and news of China’s slowing economy, both issues that continue to spew volatility, especially in light of the dramatic Brexit vote in Great Britain.

Greenberg Traurig’s Wilson expresses comfort that The Fed has signaled it won’t be as aggressive in raising interest rates as previously anticipated, considered a big positive for the commercial real estate market. The bottom line, he observes: “Some uncertainties have lifted, but I still see caution out there.” Wilson also noted that prices have spiked in recent years and that some investors are struggling to justify buying buildings at such high price levels.

Others echo the sentiment that a measure of caution has entered the market, even though deals continue to close at a fast clip. “We all wonder how long it will last,” says Phillips. “But it keeps getting better for real estate. So we’ll see.” u

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PERSONNEL CHANGES Eastdil continues to grab notable listings, with Real Reporter unveiling their recent selection by Beacon Capital Corp. as exclusive agent at 160 Federal St., a 354,000-sf Financial District office tower the hometown ownership acquired in April 2015 from Invesco Real Estate that could trade for a whopping $210 million. Eastdil also negotiated a $305 million Cambridge deal in early 2016 for client Intercontinental Real Estate Corp.

Two professionals extending congratulations to those accomplishments and more are none other than Joseph and Phaneuf. “I really wish them all the best,” Joseph said after accepting the C&W leadership post.

NATHANIEL HEALD As in his instance, Phaneuf offered salutations to team members whose roots date back to Joseph and McCaffrey coming together at Trammel Crow in 2002.

“I’m grateful for all my years there, but this was a new opportunity that was WILLIAM MOYLAN very attractive in being able to join a successful and growing local team with a lot of talent and a great (international platform) to work with,” Phaneuf says, adding he has conversed with the new C&W crew since their arrival at International Place. “Everybody seems happy where they are at right now,” he says, himself included, Phaneuf reports, crediting Senior Managing Director Coleman Bendedict for assembling a diverse group that has risen to the upper echelons of the market this decade after primarily being known for its debt and structured finance acumen.

And while that unit again this past year easily outpaced its competition (see story, this section) with total loan proceeds about $1 billion ahead of the firm’s equity activity, HFF’s Capital Markets team again this past year hit the $1 billion milestone, among a handful of shops that can say thusly.

JLL would be another eclipsing that metric, and while Petz credits the new hires for contributing immediately to that level, he says having them on board for a full year bodes even better for 2016. JLL this summer enters its fourth year since Petz took the helm and built an operation from scratch that today is in excess of 20 people and has been enhanced greatly on the talent front, the CBRE professionals essentially giving it a nationally known retail sales group in Angelone, Heald and Moylan, one of the few areas JLL had not established itself in organically.

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“It wasn’t just changing faceplates,” Petz tells Real Reporter of that coup which certainly created shockwaves given the trio’s longevity and production on a national scale while at CBRE. “We transformed who we are and how we are regarded.” Now serving as Capital Markets Co-Leader with Angelone, Petz also stresses the colleague he previously worked with during his own stint at CBRE is hardly a one-trick pony, pointing to a

“

It wasn’t just changing faceplates — we transformed who we are and how we are regarded.

”

Frank Petz series of substantial downtown office buildings peddled during the Angelone/Moylan tenure on its Capital Markets crew, a period which extended almost two decades for Angelone.

Yet JLL was hardly done in its broker talent search, further rocking the industry in the separate hiring of Cambridge mainstays Joseph Flaherty and his team from Colliers, a force Petz maintains will help improve the market knowledge investors are seeking today from their real estate counsel. “It’s critical today,” he says. “You have to prove your case today, and this is one way of doing that.” Life sciences and technology giants have created a feeding frenzy among companies clamoring for space and thusly boosting sales demand, he notes, and the timing would seem quite prescient in the JLL team having just come out with a trio of separate Cambridge sales exclusives.

Being among two of the New England’s most enduring CRE brokerages, with roots dating back over a century, CBRE and Colliers are hardly taking the situation quietly, moving quickly to restock their talent pool. Shortly before the JLL stunner, CBRE/NE had just retained both founders of the DTZ Boston Capital Markets group—David J. Pergola and Brian R. Doherty— happenstance timing that provided the firm a pair of proven sales professionals plus Analyst Jenna Skaar, a trio working regularly with CBRE/NE First VP Bruce Lusa on several transactions DAN COLLINS Boston and the suburbs, the latter realm where the Pergola/Doherty team had negotiated several premier first-class sales, including the Adobe Software headquarters in Waltham, a $40 million consideration, USAA Realty Advisor’s 293,000-sf PETER MONTESANTO office building at 300 Apollo Dr. in Chelmsford bought

by Tritower Financial Group for $39.4 million in summer 2014; and Riverworks in Watertown, a converted mill complex traded on behalf of Farley White Interests to Spear Street Capital at a GREG TANNER consideration of $43 million.

Ironically, had they remained at DTZ, Pergola and Doherty would have been in line to head up the Capital Markets operation when their office joined the C&W office decimated by the unprecedented Griffin team defection. continued on page 77

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PERSONNEL CHANGES Given CBRE/NE’s parent company has one of the world’s largest platforms with the attendent resources to boot, plus being able to rejoin his father, David L. Pergola, again at the same shop (both previously worked at Colliers predecessor Meredith & Grew) have the younger Pergola seeming plenty pleased with the end result.

“It has been a lot of fun,” he says, and the current arrangement has already proven bountiful, DOUG ADAMIAN with CBRE/NE orchestrating several substantial sales such as 15 Broad St. in Boston’s Financial District, a 73,500-sf office building that traded for $33 million.

Colliers had previously enhanced its Capital Markets team by hiring away a ANTHONY BIETTE team from NAI/Hunneman led by Scott Dragos and Douglas Jacoby in 2013, a group whose accomplishments include the $270 million sale of an office building in Boston’s Government Center last year and a large industrial portfolio divested JANICE DUMONT for Colony Realty Partners, another 2015 result (see story industrial section). The company also lured away two Avison Young leasing professionals in spring 2015, Dan Collins and Greg Tanner, and in the wake of the Chryissicas/Paladino departure, brought in Peter Montesanto, a 30-year retail sector expert who is rebuilding the platform. Most recently at the Dartmouth Co., Montesanto has handled over one million sf of leased space involving landlords and tenants with regional and national recognition.

On the independent brokerage front, several firms there have also continued to bring in new talent over the past 18 months, including Boston Realty Advisors, which in 2015 welcomed veteran suburban broker Douglas Adamian, luxury residential expert Janice Dumont and retail veteran Whitney E. Gallivan, as well as legal counsel Taran Grigsby, whose stints include Mayo Group and the state’s Division of Capital Asset Management.

“We are thrilled that as we expand the company we have been able to attract some incredible professionals who are going to help us continue that growth,” BRA founder Jason S. Weissman tells Real Reporter in reflecting upon a year when

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BRA handled a number of significant listings and not just on the equity side of the aisle.

“We have been doing a ton of leasing,” says Weissman, including several marquee retail commitments handled by Gallivan and practice group leader Michael d’Hemecourt.

They are presently advising the owners of 604 Boylston St. on a sale of that building across from the Prudential Center as well as 282-286 Newbury St. around the corner.

Meanwhile, d’Hemecourt and Gallivan have lured several marquee tenants to the Prudential Center’s expanding retail footprint.

BENJAMIN COFFIN An alum of W/S Development and HFF Inc., Gallivan was sought “by everybody,” d’Hemecourt had said this spring in terming her arrival as full partner “a game-changer for the leasing arm” of the multi-faceted company. Weissman BRIAN FLAHERTY seconded that emotion, declaring it “goes a long way to making us one of the most prominent retail shops in the city.”

Last June’s naming of Dumont as CEO of Advisors Living, BRA’s new full-service residential branch, TUCKER HANSEN immediately brought $150 million in new listings to the agency from a market veteran known for using analytics to decipher a constantly evolving marketplace, one that as she arrived at Advisors was in the midst of a construction boom with nearly 1,900 new units in the pipeline, including Mosaic on the Riverway

in Boston’s Longwood Medical Area, a 42-unit condo project opening this year which Advisors is marketing along with several others in the city and beyond. “Janice’s ability to motivate and lead combined with her unique understanding of site demographics, branding and market requirements make her a valuable asset to the new and growing team at Advisors Living,” Weissman said when Dumont took the newly created post.

Adamian, meanwhile, was also quickly welcomed into the fold last autumn, and his arrival played a direct role in KS Partners founder Kambiz Shahbazi retaining Boston Realty Advisors as leasing agents for two buildings he had just purchased in Newton and Watertown. The broker whose skills include TED CHRYISSICAS tenant representation is teamed with BRA brokers Jeremy A. Freid, SIOR, and Adam Meixner, both experts on the Route 128 Central and inner suburban west territory.

In 2016, BRA beefed up its investment sales caPATRICK PALADINO pabilities by hiring Anthony W. Biette, his 25 years of experience also including a background in appraisal and property management plus having completed over $3.0 billion in real estate transaction volume. “This is a great hire for us,” Weissman said in a February Real Reporter.

NAI/Hunneman has also been on a hiring jag, bringing in David E. Slye and Steven Prozinski as new leaders of a venerable company dating back to 1929. The company already has a number of veteran brokerage units who are active in the continued on page 79

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but there were two standout assignments so imposing they dwarfed a number of others that by themselves would be major exchanges, among the more “moderate” outcomes Eastdil’s $110.8 million sale of 99 Summer St. in Downtown Crossing and the Renaissance Boston Waterfront Hotel in the Seaport District, both acquired by Rockpoint Group in separate listings, the first negotiated for Normandy Real Estate Partners and the hotel a consideration of $157 million which transferred a ground lease from the Massachusetts Port Authority running to Feb. 2101.

In other Eastdil transBRIAN BARNETT actions this past year, the contingent brokered a deal involving 101 Merrimac St. where Artemis Real Estate paid $37.5 million for a 50 percent stake in that North Station office building developed and now co-owned with H.N. Gorin MOLLY PADIEN-HAVENS Inc. Eastdil also advised the seller of 550 King St. in Littleton when that renovated industrial building fetched $87.7 million from Lone Star Funds for client Columbia Property Trust. The facility has over 490,000 sf on a 40-acre land site near STEFFEN PANZONE Interstate 495.

Between the Back Bay portfolio and its role helping Blackstone Group orchestrate a landmark $8 billion takeover of life sciences REIT BioMed (a deal that did not close until this year), Eastdil’s Boston office was defined in 2015 for its overly large assignments, continuing a pattern evident the prior year while harvesting another Blackstone Boston-area portfolio deal, that one in selling six first-class office assets to ventures led by Oxford Properties Trust, a 3.2-million-sf deal valued at over $2.0 billion negotiated in concert with the Robert E. Griffin Jr. Capital Markets team now at Newmark.

Lagosh does, nonetheless point to a number of middle-market exclusives outside the urban core that reflect her Capital Markets team’s ability to operate at all spectrums of the spectrum. Among the 2015 examples would be a pair of suburban buildings peddled for Inter-

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continental Real Estate to Hilco Real Estate, the larger 127,275 sf of office space at 48 Woerd Ave. in Waltham secured for $18.8 million and the other $8.85 million spent on 575 University Ave. in Norwood, an 88,375sf flex/office building that was part of Intercontiental’s Fund III investment instrument held since Dec. 2003.

“While we have done many high-quality sales in the CBD and Back Bay, we stay active beyond the downtown and out to the suburbs where we have quite a bit of (business),” Lagosh relays, and beyond the office and retail arenas.

Eastdil was broker, for example, on an industrial property sold

by Prologis as the REIT backed out of the regional market, in that case procuring Colony Capital Inc. which paid $27.5 million in Octo99 SUMMER ST., BOSTON MA ber for the 345,000-sf Beacon Capital Partners to the aforementioned structure. Fully half of Eastdil’s dozen straight equity sales last year were outside Boston and Intercontinental of Brighton which acquired Cambridge, according to Lagosh, and the firm 426,000 sf at One, Two and Ten Canal Park has continued to keep those sort of listings in for its $5.6-billion United States Reinvestment its pipeline this year, recently completing a 2015 Fund.

The local Eastdil crew also played a key adviholdover in the closing of New England Business Center in Andover on behalf of MARIC Inc., sory role in the BioMed purchase by Blackstone, with the search process uncovering an abutter with Boston and Cambridge home to three who paid in excess of $130 per sf to secure the million sf (17 buildings) of the eight million sf 244,000 sf at 5, 10, 15 and 35 New England Blackstone acquired and 40 percent of the $8 Business Center Dr. Those working that assign- billion it was valued at upon changing hands. ment included Barnett, Joseph and Panzone, the The complicated pact will be registered in 2016 same trio plus Lagosh and McCaffrey were also calculations.

On the official books for 2015, 222 Berkeley involved in the half-interest sale at 101 Merrimac St. to Artemis, with that 2015 exclusive St. and 500 Boylston St proved to be the biggest finalized this year after H.N. Gorin had first in- trade in New England according to one industry survey that shows Eastdil tops nationally among tended to dispatch a much larger piece.

Even with its share of middle-market trans- 10 leading gateway markets in the review and actions, if recent activity is any guide, it could be registering half of the 50 priciest sales tracked challenging for the Boston Eastdil crew to shake by Real Estate Alert including six of the top 10, the image of being a broker of New England’s the Back Bay towers brokered by the Boston mega-sales, as evidenced in the recent $304 team being ranked fifth across the land. continued on page 79 million trade of three Cambridge buildings from

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The real estate arm of Ontario Province’s public employee pension fund, Oxford’s North American and European portfolio covers 170 assets including a mix of hotel, industrial, multifamily, office and retail valued in excess of $37 billion. It swept into Boston via the first major Blackstone portfolio deal, partnering with J.P. Morgan on several of those holdings before turning attention last year to the Back Bay listing Eastdil took out to market that the joint venture also prevailed upon at the end.

The larger and older of the two towers is 500 Boylston St., its 1.3 million sf on 25 levels completed in 1989 followed by construction of the 22-story, 534,675-sf 222 Berkeley St. that includes 61,550 sf of ground floor retail and 1,000 on-site parking slots, the same number of spaces as 500 Boylston St. which has 89,125 sf of retail. The combined mixed-use complex takes up an entire city block near the John Hancock Tower at 200 Clarendon St. According to Oxford’s website, the investor which opened its US operations in 2010 intends to develop and manage a portfolio of $10 billion across America by 2018, a footprint focused on New York City and Washington, D.C. but also willing to consider office and retail opportunities in Boston and other leading metro markets.

The Eastdil team would seem the sort who could have additional listings worthy of Oxford’s attention in fulfilling those aims, although the

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company confidentiality mandates make them challenging to identify. Real Reporter did just unveil emerging plans by Beacon Capital Partners to sell its revitalized 160 Federal St. in Bos-

ton through the Eastdil camp, a report the brokerage company did not respond to as of press deadline on a transaction some claim could u eclipse $210 million.

sons ranging from being back in an entrepreneurial climate and enough continued from page 77 changes underway to have his new sphere from $1 million to $25 million that sees haunt deemed “the new Hunneman” plenty of action annually. The firm led by Stuart even as the firm’s legacy is also being Pratt also hired in 2015 NPV Direct alum Peter promoted. “It’s a great time to be in Evans to join the downtown leasing team bring- the business and it’s a terrific time to be at Hunneman,” Nicoletti ing a landlord’s perspective to the table RONALD PERRY LAWRENCE EPSTEIN MICHAEL MCCARTHY offered of his outlook. and working alongside the likes of Hub Canadian-bred Avison Young has tionships in the Route 128 market, combined mainstay Jeff Becker, then separately had more than its share of high-pro- with his reputation as a creative dealmaker, convinced James Nicoletti to return to file hires since arriving regionally in make him a valuable asset to our growing the brokerage industry after a five-year 2009, and this past autumn scored Boston office and will help us better serve our hiatus overseeing admissions at Boston another one in bringing Michael Mc- clients,” outlined Smith, who now oversees the College High School, Nicoletti explainCarthy over as a Senior VP who will Boston office on the Capital Markets team that ing in a Real Reporter interview on be trolling the Route 128 Central and includes his former colleague at JLL, Scott Jathe matter that he had been mulling a PETER EVANS North markets where some of subur- mieson. comeback when a colleague suggested ban Boston’s most prized office buildAvison Young had another headliner on the NAI/Hunneman had the right energy, ings are located. McCarthy previously personnel front just as the summer season was framework and reputation Nicoletti says had been at NAI/Hunneman, and heating up in the hiring of Colliers International he was hankering for in opting to return.

Avison Managing DIrector Michael G. principals Ron Perry and Lawrence Epstein plus Nicoletti recently told Real ReportSmith predicted that background will three other downtown office leasing brokers in er he is “enjoying every minute of it pay immediate dividends. “Michael’s Senior VPs Jeff Gates and Mike McElaney plus encore, Nicoletti told Real Reporter he u is “enjoying every minute of it,” rea- JAMES NICOLETTI years of experience and deep rela- Senior Associate Matt Perry.

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“We were extremely busy in all categories,” he tells Real Reporter in a recent interview where Griffin calls 2015 “one of the most amazing years we have ever experienced here and across the country.” The boom did hit a lull in the fourth quarter, he recounts, partly a result of global economic struggles and general instability making capital sources step back, but while “you had a sense it might be over,” Griffin says demand JAY WAGNER for product rebounded nicely by February. That has translated to fresh marquee trades already in 2016, among them sale of 101 Seaport Blvd., a $452-million blockbuster first unveiled by Real Reporter in March where a PAUL PENMAN German fund spent a record $1,027 per sf to secure the 440,000-sf office building from Skanska USA. Newmark has since brokered a $65 million exchange of 300 Baker Ave. in Concord where Normandy Real Estate Partners dispatched the resurgent 413,000-sf office building to Novaya Real Estate Partners, while more recently the team reaped $42.1 million for the longtime owners of 70 Franklin St. in downtown Boston when yet another Rhineland concern bested stiff competition to land an historic asset at the crossroads of Downtown Crossing and the Financial District.

339 D ST., BOSTON MA

50 STANIFORD ST., BOSTON MA

The Griffin team harvested plenty of office product regionally in 2015, including the $316.5 million sale of State Street Bank’s new headquarters at One Channel Center in the Seaport and nine-figure suburban office park closings in Andover, Burlington and Needham yielding an aggregate $412 million for separate owners, but as Griffin recounts, all CRE disciplines were represented in the annual book of business, with their multifamily group led by Executive Managing Dierctor Michael T. Byrne finishing second only to the dominant CBRE/NE duo of Simon J. Butler and Biria St. John ($1.5 billion) in a season totaling $965 million headlined by the $207 million sale of a Cambridge apartment property plus a plethora of other in-

sititutional-caliber apartment deals such as the 160-unit Windsor Woods complex in Canton bought by Zurich Alternative Asset Management for $37.5 million (see story, multifamily section).

The retail unit run by Executive Managing Director Geoff Millerd (see related stories, retail section) was also a force last year in assembling over $2 billion of closings headlined by the Demoulas Supermarket real estate portfolio that fetched $1.2 billion; a mall in southern Florida that New England Development reaped $400 million from Clarion Partners in a complicated debt-to-equity exercise; and “Main & Main” Harvard Square buildings that yielded $85 million from Equity One. Demoulas’ portfolio transacted in the wake of the legendary employee uprising and forced sale by one family clique to another required processing 56 different assets, mostly supermarket units in Massachusetts, New Hampshire and Maine. That 10-figure result is considered the largest strip-center deal ever completed regionally.

Interestingly, while the premier Newmark retail trades all have been publicized, Millerd was unable to discuss the Demoulas, Florida or Harvard Square assignments due to client confidentiality agreements. Equity One was the winning bidder on the Harvard Square assets are at 1-11 JFK Street and 24 Brattle St., best known as home to the flagship Curious George retail store. The $85 million equates to an astounding $2,070 per sf to secure the 41,050 sf on what was marketed as a potential development site.

A leasing brochure put out by the new landlord continued on page 81

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does not discuss the purchase, but promotes it as an “irreplaceable location in the center of Harvard Square” with 16,000 sf of office space and 26,000-sf of “prime street retail” serving a demographic of more than 462,000 consumers whose average household income is $98,400.

Equity One has already rebranded 1-11 JFK St. as 5 JFK St. and has named Tim Havener its leasing agent.

While Millerd could not respond to the main highlights of 2015, Griffin lauds the retail contingent for “really crushing it last FRANK NELSON year” after also hitting $2 billion in 2014. “They have taken on the biggest listings around and done an amazing job with them,” he adds of the group that includes Managing Director Justin Smith and Associate Director Paul Penman.

MICHAEL GREELEY Among the country’s priciest medical office sales of 2015—if not the apex— was also negotiated by the Griffin team, that one via its Medical-Academic Practice Group founded by Executive Managing DIrector Frank Nelson and featuring DANIELLE DEMARCO Managing DIrector Michael Greeley and Danielle DeMarco. Following what one observer describes as “a dogfight,” Deutsche Asset and Wealth Management spent an astounding $123.3 million to beat out a deep pool of rivals for 50 Staniford St., an austere 10-story building adjacent to Massachusetts General Hospital.

One Channel Center was bought by Tishman Speyer from Commonwealth Ventures and AREA Property Partners, the erstwhile Apollo Real Estate Advisors who had teamed with Commonwealth Ventures founder Richard Galvin to build the 11-story, 500,000-sf building where the financial services giant signed a 15-year lease for use of that and an adjacent 965-space parking garage included in the Tishman purchase.

In making its commitment, Tishman officials cited “flexibility and customization” as attractions to the structure that has a dual-core floor plate split into two by a vertical glass column, a design the buyer said makes for “easy sub-divis-

22 BOSTON WHARF RD., BOSTON MA

ibility and unassigned workspaces with virtual meeting capabilities.” Griffin reports there were a number of top-flight investors vying for the building in that case as well, though he declined to identify runner-ups beyond relaying that “institutional buyers were all over that one” until New York City based Tishman took home the prize, that firm already making a major stake in the Anthony’s Pier Four redevelopment nearby

226 CAUSEWAY ST., BOSTON MA

on Boston Harbor. “It’s one of the best buildings around,” Griffin declares of One Channel Center, pointing to the anchor tenant as validation of that pronouncement.

The Seaport was a familiar place for Griffin and friends in 2015, having also advised Davis Cos. on its $62.1 million trade of Tower Point, a warehouse-converted-to office product the seller had bought for $43 million less than three years prior, then undertook a capital improvements and leasing program to stabilize the asset. Later in the season, the Capital Markets crew was broker on the $225-million cashout

by Berkeley Investments of a massive Fort Point Channel assemblage. Acquired in Dec. 2004 as part of a 10-building package, the firm led by Young K. Park had been divesting pieces of that $97 million purchase before retaining C&W to take out the remaining properties, although it did not change hands until after they joined Newmark.

Four of five assets in the mix were bought by Multi-Employer Property Trust through advisor Bentall Kennedy in which all but $63.5 million was spent to purchase 22 Boston Wharf Rd., 12 and 17-31 Farnsworth St. and 11 Sleeper St. The final building, 343 Congress St., did not close until the last day of 2015. continued on page 82

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But the Griffin brokerage shop was hardly restricted to A Street and Northern Avenue, with buildings transacted this past year in Maine, Connecticut, New Hampshire and Rhode Island involving all manner of CRE, highlights including a $66 million office building sale in Portland; another office property in Manchester, NH recently named the Granite State’s top commercial trade of 2015; and Wampanoag Plaza in Rhode Island, an infill center that fetched $25 million, that a Millerd-team listing.

An interesting trend emerging this decade has been growth of the mixed-use model, and Griffin says diversity is one factor fo ensuring his lineup can handle any product type. “We have no silos here,” he says. “You really need all disciplines working closely, whether it’s your leasing experts, the managers or research people, so the Capital Markets (strategy) needs to be intersecting with each other and helping the client understand the different food groups are more aligned today than ever before because it is going to impact values.”

Dating back to their C&W days, the Griffin operation has played a role selling off pieces of the University Station mixed-use complex in Westwood which involves a diverse stripe of functions along Route 128. The Live/Work/ Play mantra is reshaping CRE both in city settings and on the suburban frontier, Griffin says, another example coming in the $133.5 million sale of TripAdvisor’s new headquarters in Needham, the cachet of which was both in the premier anchor tenant and newly constructed first-class office space, but also from an effort

1-11 JFK ST. AND 24 BRATTLE ST., CAMBRIDGE MA

WINDSOR WOODS, CANTON MA

by seller Normandy joined by local officials to allow ancillary uses in the surrounding business park while making further enhancements to in-

“

Investors are being more discerning in what they will pay.

”

Robert E. Griffin Jr., US Head of Investments Newmark

vigorate a LWP environment.

An ongoing theme that took root in 2013 and has now blossomed to unprecedented levels is the amount of foreign capital pouring

into metropolitan Boston, and Griffin says it is “like nothing we have ever seen.” The industry veteran credits Newmark Grubb’s affiliation with global brokerage giant Knight Frank for further expanding his database of prospects, one that has delivered over $40 billion to investors during three-plus decades without such assistance. “I didn’t realize just how incredibly helpful that would be, but it has been a fantastic resource for us,” Griffin says, tabbing Knight Frank to being the top shop of its ilk in both Europe and Asia.

Deutsche Bank came calling on 50 Staniford St. long before DTZ or Newmark were in the picture, and Michael Greeley says the heavyweight overseas investor needed to outmaneuver “nearly every major player focused on healthcare real estate” and did so tendering an offer eclipsing $638 per sf, in line with many firstclass office towers. The 10-story, 193,225-sf building is adjacent to Massachusetts General Hospital, a Tier-One institution which occupies three-fourths of 50 Staniford St. in a fully leased property. “The opportunity to buy a stabilized office building on the MGH campus is incredibly unique, and Deutsche Bank understood that,” says Greeley, adding, “I think they are very happy to have gotten it.”

The multifamily division had its share of input with off-shore capital last year, and Byrne says it appears that constituency is becoming more comfortable delving outside the urban Boston and Cambridge markets to explore suburban options, as evidenced in the Canton deal involving Zurich, a Scandinavian-based fund which launched its platform regionally buying into the Seaport and Financial District hotspots.

For a price of $16.4 million, Swedish-based continued on page 83

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Akelius was the winning bidder of a new apartment building in the Seaport District during its inaugural run-up buying a quartet of properties in the Hub last year, with the C&W multifamily team on the case at 339 D St., a 24-unit, 32,425-sf property whose seller was local developer Ryan Sillery.

Market watchers maintain Akelius might be oversubscribed in its Northeast holdings, creating industry buzz that they will now stay on the sidelines and focus on the large swath of units already secured, but Capital Markets chief Griffin predicts the overseas realm will continue to concentrate on Boston, a market he says is deemed preferable to many because Washington, D.C. “is having trouble getting its legs” and Gotham has an imposing cost of entry often starting in the $1 billion sphere.

“People think of Boston as more bite-sized, and we are really benefitting from our scale,”

he says, while further crediting the advent of knowledge-based centers in the new millennium for boosting the Hub’s stature. “Nobody is hotter than Boston right now,” he says. “It is number one on the list for an awful lot of investors.” By his estimates, the disruption that occurred last autumn has been more impactful in other gateway cities, estimating many in the top 10 have seen values drop by 10 to 15 percent. Not so locally, however. “We have held our own much better than a lot of places,” he says.

That does not mean Griffin has an entirely rosy picture going forward, especially over the near term where he fears the unprecedentedly negative ratings of both presidential candidates could throw the nation into a malaise until it is resolved. “I do think things are going to get choppy until we get past that,” he says. “It’s unchartered waters, and I don’t think anyone is really sure how it will play out, and it is one reason that a lot ofinvestors are being more discerning in what they will pay,” he says.

Another wild card is Brexit and its long-

T H E A N N U A L R E V I E W 83 range impact, although many observers express the mindset any turmoil will occur across the pond, and suggest that imbroglio could inspire jittery capital mindful of trouble there and in the BRICS countries to double down on their US real estate holdings. Griffin offers a similar take, repeating the view of a colleague who described the situation as “having the nicest house in a deteriorating neighborhood” and further portending the instability will keep US interest rates depressed longer than many were forecasting. “The cost of debt is very low right now and looks like it will be for a long time,” he says, enhancing the chances of buyers being able to access financing even if the climate does cool.

“

The opportunity to buy a stabilized office building on the MGH campus is incredibly unique, and Deutsche Bank understood that.

”

Michael Greeley, Managing Director Newmark

The domestic set was also chasing listings in 2015, and Tower Point buyer Rockpoint Group scored another Newmark exclusive buying the 75-101 Federal St. office complex from Pearlmark for an impressive $326.5 million. Developed by local firm H.N. Gorin Inc, the 812,000-sf of first-class space changed hands in mid-July. Texas-based Invesco Real Estate took home the prize of 226 Causeway St., a 192,900-sf building in North Station which it paid $91.6 million for to Spear Street Capital, yet another windfall for that San Francisco investment company led by John Grassi. Robert Griffin, Maher and Pullen were involved in both of those sales and played similar roles when Clarion Partners spent $48.8 million in May 2015 on 100 Franklin St., the 124,000-sf home of Synergy Investments, C&W’s client as owner of the historic building that fetched $374 per sf versus the $272 per sf ($33.5 million) Synergy spent in Oct. 8th.

The same Capital Markets juggernaut was all over suburban Boston as well in 2015, with highlights featuring the trio of assets over $100 million each, those being TripAdvisor’s new Needham headquarters mentioned earlier, plus 53 South St. in Burlington where a lengthy pro75-101 FEDERAL ST., BOSTON MA

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cess culminated in the $119.8 million acquisition by Cole Office & Industrial REIT from the Gutierrez Co., developers of the 280,550-sf headquarters of Green Mountain Coffee, makers of the Keurig beverage systems.

The Andover assignment was for Minuteman Park, a sprawling 94-acre office complex totaling 950,000 sf that yielded $160 million this past September from Spear Street Capital, the 226 Causeway St. sellers, with Newmark representing partners Brickstone Properties and JPMorgan Asset Management.

In a more modest suburban transaction, Newmark was agent for advised Deutsche A&W in a $26 million trade of 1 and 2 Federal St. in Billerica to U.S. Realty Advisors of New York in March 2015, which was backed by a $19.6 million mortgage from Santander Bank arranged by the C&W debt and structured finance team and its manager, Jay Wagner. U.S. Realty Advisors was also the buyer of TripAdvisor’s Needham building from Normandy Real Estate.

The Billerica assignment exemplifies the Griffin team’s willingness to move beyond the mega-sales and practice in the middle markets and lower tranches to serve clients of all sizes. Deutsche under its former name RREEF had bought the Billerica properties as part of a large regional portfolio in 2005, and Pullen says the sponsor had kept the Federal Street buildings in good condition and also signed a lone tenant

LEGACY FOUNDER continued from page 24

in Lakewood, NJ in 2013) approached him with a 35,000-sf single-tenant building occupied by Siemens in Blue Bell, PA under a triple-net lease, and Price closed on the asset in September (at a 7.5 cap rate) for $5.5 million.

“What happened was that my investors had some cash back (from the sales) and they wanted to re-invest,” says Price. “I couldn’t find anything in this area, and I typically won’t take the risk out of state unless it’s a very clean deal, but this was a triple-net, credit deal with a great return, so I felt that this was a good place for these people to put their money on a fixed-return basis.”

Price was scheduled for a foot surgery in November, one that he knew would sideline him for at least three months, so he decided to put his feet up for a while—both literally and figuratively. But that plan soon went awry when yet another sale opportunity presented itself, this time a building at 99 West Cedar St. in Beacon

ONE FIRST AVE., PEABODY MA

for the 157,000-sf asset. “The improvements, combined with the long-term occupancy commitment by PAREXEL International Corp. makes these assets an excellent complement to U.S. Realty Advisors’ portfolio,” Pullen remarked of that result.

U.S. Realty Advisors was the seller on another suburban deal completed last years by Newmark where NorthBridge CRE Advisors paid $37.5 million for 68-78 Elm St. and 5 Parkwood Dr. in Hopkinton, a pair of net-leased office buildings totaling 198,325 sf fully leased

to Perkin Elmer. Associate Director Samantha N. Hallowell joined Griffin, Maher and Pullen on that assignment.

Griffin maintains the suburban realm may be a better place to find yield, but ironically reports many capital sources are balking at going outside Boston’s inner suburban ring due to the rising uncertainty about where the cycle is right now. “It’s too bad, because I think you are going to find some very good opportunities available out there,” he says. “This could be the ideal time to be looking.” u

Hill that he owned in partnership with Eastport Real Estate Services, Inc. Price and his partners had been working on the deal with tenant The Advent School for some time, and the $3.8 million transaction for the two-story 5,444 sf struc-

61-63 Wareham St. for $6.5 million, which he purchased in partnership with one of the building’s existing tenants. Located within walking distance of Ink Block and Leggat McCall Properties’ 710-unit residential project, Price says he is excited about the building’s potential. “We have several great options with this property,” he relays. “We can keep nurturing it as an office building, continue to improve it and ride the rents up – because the rents are way below market – but a conversion to residential might also make some sense.”

The seasoned veteran and Wayland resident has also made the adjustment to the role of seller in this hot market, as he also traded a 24,000-sf office building in Colchester, VT for $5.23 million (after a five -year hold) to close out Q1, and this spring divested the Lakewood warehouse. As if he weren’t busy enough, Price is also a member of the faculty of Boston University’s Metropolitan College where he teaches a Real Estate Market Analysis course. Resting that foot may have to wait until the market cools. u

“

The light went on and I recognized that it might be time to be on the selling side.

”

Michael L. Price, President Legacy RE

ture finally closed in early February of this year.

The opening frames of 2016 have been very busy for Price, who also closed on an off-market deal for a 30,000-sf office/retail building in the South End at 44-46 Plympton St. and

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case the brokers interacting with former Marcus & Millichap colleagues Robert M. Horvath and Todd Tremblay, they on the sales side of the ledger whereas Drinkwater and Richard brought in the buyer, SPC Acquisitions LLC. Reflecting the quality of the properties, all of the CVS deals had capitalization rates in the 5 percent sphere. The lowest was 5.2 percent on a late season sale of the 48 Portland Rd. (Route One), Kennebunk, ME exchange in late 2015 which fetched $10.0 million on the strength of being in a popular seaside community and near a large grocery anchored shopping center, plus the pharmacy giant’s 19-year term and a half-dozen five-year renewal options on a double-net lease arrangement.

“Five percent increases that begin in the first option period and continue every five years thereafter create an excellent opportunity for long-tem income growth,” Richard explains of that 13,225-sf building that dates to 2008, with the buyer apparently agreeing in shelling out $760 per sf. The CVS sits across Route One from an 85,000-sf Hannaford Brothers shopping plaza.

Drinkwater and Richard were advising the seller in that instance where colleague Shlomo Manne of the firm’s Manhattan office procured the buyer, to no one’s shock a private investor completing a 1031 tax-deferred exchange. The broker of record in Maine participating in the deal is Adrian Harris of Harris Real Estate, Appraisal and Auction Services.

Other CVS Pharmacy stores harvested through Drinkwater and Richard last year were in Salisbury and Ware. In the former case the 13,225-sf unit at 2 Lafayette Rd. (Route One) was divested for $7.42 million (5.8 percent cap rate) to Columbia CV Salisbury I LLC and Columbia CV Salisbury II LLC of New Jersey. Salisbury Ventures LLC was the seller, its manager Scott Mitchell. The 1.5-acre parcel last changed hands for $1.45 million in Feb. 2008. Drinkwater and Richard represented the buyers while Horvath and Tremblay were agents for the seller, an affiliate of New Hampshire-based Tropic Star Development.

Drinkwater and Richard advised the seller of the Ware CVS deal that occurred in May 2015 for a price of $7.79 million and 5.4 percent cap rate on the pharmacy at 104 West St. It has 18 years left of a 25-year triple-net lease of 13,075 sf on 6.7 acres. The free-standing building was bought by H.J.N. Hotels Corp. of Westbury, NY, with CPI Ware LLC the Marcus & Millichap client, its manager being Peter O. Hanson. That

CVS PHARMARCY, 104 WEST ST., WARE MA

group had paid $7.15 million in Dec. 2013 for the asset that came on line in 2008.

Proving they can work both sides of the pharmacy industry rivalry, Drinkwater and Richard were also agents for the sellers of Walgreens pharmacies in 2015, the larger deal a $7.6 million trade of the store at 202 Broad St. in Glens Falls, NY, plus a Groton, CT, deal at 441 Long Hill Rd. bought for $5.45 million, a 6.0 percent cap rate versus 5.7 for the Empire State

ALDI FOOD MARKET, 539 SMITH ST., PROVIDENCE RI

Walgreens.

The brokers got out of the Northeast in their 2015 travels, completing a major exchange advising the seller of two Ohio retail centers at 5231 Detroit Rd. in Sheffield Village and 2201 Kresge Dr. in Amherst that yielded an impressive $27.7 million for their client, amounting to a 7.6 percent cap rate. Known collectively as the Giant Eagle Portfolio, it encompasses 193,625 sf of space that came on line in the late 1980s.

According to Drinkwater and Richard, 2016 is proving to be another solid season, and they have delved into another specialty area of selling net-leased industrial product, with this spring the pair delivering $41.8 million for a 303,000-sf FedEx Ground facility in Louisville KY. The newly constructed property commenced a 15-year lease at closing, relays Richard, who further outlines a need to nurse the project along when record storms battering Louisville disrupted construction. “To keep the buyer and lender as comfortable as possible, we made site visits and provided critical real-time updates,” recounts Richard, whose team advised the buyer while Stan Johnson Co. was broker for the seller. Aaron Johnson served as broker of record in Kentucky.

The property is located on 45 acres inside the Blankenbaker Station Business Park near the juncture of Interstates 64 and 265. The Marcus & Millichap client has tapped Drinkwater and Richard before for similar listings, and according to Drinkwater, “our business model is based upon collaboration and long-term relationships that grow out of exceptional services including consistent, timely communication, especially during out-of-the-ordinary circumstances” such as the fickle Kentucky weather. u

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companies it should have been part of their game plan for many years, but (now) it’s being driven by interest rates. I also think that the lenders are doing a much better job of promoting the SBA 504 program, which is geared towards small businesses buying real estate, and it’s clearly (creating) much higher demand.”

Holmes adds that the owner-occupiers are typically buying within a five- to seven-mile radius of their previous locations, so the DEAN BLACKEY trend is not necessarily an indicator of suburban migration from the city seeking pricing relief. On the investment sales side, however, the heated demand in the city is having a dramatic impact on the suburbs.

“From an investment standJOHN EYSENBACH point, all of the growth and activity in Boston is forcing investors to look to the suburbs where they can get a better return,” says Holmes.

R.W. Holmes cobbled together a number of owner-user transactions in 2015, beginning with the $5.3 CRAIG JOHNSTON million sale of a 43,000-sf multi-tenanted flex building at 227-233 South St. in Hopkinton. Digital display and control instrumentation manufacturer Precision Digital Corp. purchased and renovated the facility and now occupies 21,000 sf of the building’s total space. Executive VP John Eysenbach represented the seller, investor MAR S. Maple Realty Trust, and Senior VP Craig S. Johnston procured the buyer.

Eysenbach also represented Van Lumber in the $5.0 million sale of the 81,000 sf warehouse/ office building at 27 South Maple St. in Bell-

125 DEPOT ST., BELLINGHAM MA

ingham to food distributor Allstate Trading. Van Lumber remains as a tenant in the building while Allstate Trading installed freezer and cooler space for their own distribution purposes. Joel Miller of Perishable Management Services represented Allstate Trading in the deal. Johnston also represented private investor Franchi Merchant Street LLP in the $2.9 million acquisition of the 30,300

“

If you can find a property to sell and it’s priced properly, it will definitely sell.

”

Bret O’Brien, President Greater Boston Commercial Properties

sf 6 Merchant St. in Sharon, a multi-tenanted flex/industrial building sold by Michael Price and Legacy Real Estate Ventures via Avison Young, a team including Michael G. Smith, Scott Jamieson, Brandon Dickason and William Sullivan.

R.W. Holmes is also off to a roaring start in 2016, with Garry Holmes and Dean Blackey representing Vision Realty Dedham LLC in the $6.4 million sale of a 22,388-sf medical office building at 910 Washington St. in Dedham to Dedham MOB LLC (an entity controlled by New Bedford-based Whelan Associates); Holmes and Blackey also negotiated the $2.7 million February

21 STRATHMORE RD., NATICK, SET RECORD PRICING IN THE NATICK BUSINESS PARK OF $251 PER SF VIA A SALE BROKERED BY NEW DOVER ASSOCIATES.

trade of an 18,000-sf office/manufacturing building at 55 Border St., Newton, with Holmes representing the seller, Border Realty Trust and Blackey repping the buyer, Quarter Realty Trust. South of town, Eysenbach represented Chelsea-based fuel distributor Dennis R. Burke, Inc. in the $4.5 million buy of 555 Constitution Dr. in Taunton from New England Ice Cream, which will lease back the facility until their new 65,000-sf headquarters in Norton is completed. JLL brokers Tony Coskren and Rick Schuhwerk represented New England Ice Cream in the transaction.

Scott R. Hughes, president of Framingham-based New Dover Associates also reports that owner-occupiers are driving a good deal of his firm’s business. Hughes brokered the trades of a number of properties to end users, including three of his five sales in the Natick Business Park in 2015 and into the first quarter of 2016. “Natick Business Park (comprised of 26 buildings) attracts an eclectic group of owner occupant buyers and tenants,” says Hughes. In March 2015, private investors Kaufman/Nir, LLC purchased a 16,900-sf office building at 27 Strathmore Rd. in the park in a sale/leaseback deal with the Natick Innovation Center for $2.2 million, and in September, Yellow Brick, LLC (managed by Steven M. Turner) sold a 14,656-sf office/R&D building at 6 Mercer Rd. to user Museum of World War II, Inc. for $2.75 million.

Hughes ventured out to Marlborough in October to broker another sale for Turner and Yellow Brick when the investor acquired a 50,000sf office building and adjacent land site for $4.7 million at 630 and 686 Forest St. Hughes then returned to the Natick Business Park in December to broker a deal with another Turner entity, Red Brick Development, LLC, which acquired a two story, office/R&D building totaling 45,649 sf at 16 Tech Cir. paying $4.55 million backed by a $4.42 million East Boston Savings Bank loan..

In the first quarter of 2016, Hughes closed two additional owner-occupier deals at the park, 2-4 Mercer Rd. and 21 Strathmore Rd. Yusef Haj-Darwish and Paul Vallera, operators of Norcontinued on page 87

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wood Urgent Care, purchased 2-4 Mercer Rd. for $3.9 million from an entity of Nivek Investments, and plan to open a similar medical office facility after renovating the 17,875-sf building. And Chinese tech firm Sunshine Technologies acquired 21 Strathmore Rd., a 15,504-sf office/R & D building– also for $3.9 million – from Boston-based investor Genesis Management Group, and the $251 per-sf price set a record for the park.

“We do both investor JONATHAN BLACKER and owner-occupier sales, but the ones that are pushing the envelope in terms of prices are these smaller buildings,” says Hughes.

“There’s a strong retail draw in the area, so that’s why you’ve got a lot of owner-occupants paying top dollar JOHN F. CREMMEN for these under-20,000-sf buildings. They really want to be in that location.”

Phil Burgess, President of Malden-based Burgess Properties, relays that the markets just north of Boston are dominated by user acquisitions. “It’s just the MEGHAN DENENBERG nature of the beast out here, the buildings in the Malden, Everett, and Chelsea markets are not really investment-grade properties,” explains the inner-suburban veteran. “It’s an owner-occupant market. If you look around, that’s about 80 perRICHARD MCKINNON cent of it. People’s businesses are in the buildings (they own).” While Burgess brokered a number of owner-user sales, the single largest transaction completed in 2015 was the $14.2 million sale of 22 acres in Everett’s RiverGreen Business Park that Berkeley Investments traded to the Jefferson Apartment Group. Berkeley initially planned to build single-story industrial properties but ran into zoning issues. “So we went back to square one and the city (approved it) for residential and we quickly put it under agreement to Jefferson Apartments,” recounts Burgess.

Burgess Properties brokered $38 million in total sales transactions in 2015, with a number of owner-occupant purchases. “2015 was a great year and this year is probably going to

27 SOUTH MAPLE ST., BELLINGHAM MA

150 EASTERN AVE., CHELSEA MA

be even better,” the founding principal predicts. a piece of property to build a large private comOther 2015 deals included the $7.0 million sale plex, we have a four-acre site in Boston that we of the 100,000-sf manufacturing building at 35 will (shortly) put on the market, and we have two Green St. in Malden by Asahi America to big projects in Cambridge that hopefulHoff’s Bakery in March; the $4.0 million ly will be finalized this year,” Denensale of the 60,000 sf air freight building berg reports. To help with the increased at 150 Eastern Ave. in Chelsea by Probusiness, his firm in February brought logis to O’Brien Realty Trust; the $2.55 aboard 30-year veteran Richard McKinmillion sale by Red Brick Development non (formerly of the Grossman Cos.) as to 100 Pleasant Street LLC (managed his new vice president and added Jake

by Mai Luo of Weston); and the $2.2 Wagner in December, bringing the total million sale of the 26,000-sf flex build- DAVID STUBBLEBINE of full-time brokers at the firm to seven. ing at 25 Commercial St. in Medford to They join a firm celebrating 25 Storage Bunker by Liebman LP. In 2016, years in business this year whose Burgess has already closed on the sale core staff include Vice President Paul by the owner of the 43,000-sf Boston Stanislas, Chief Operating Office MeSteel and Manufacturing building at gan Denenberg, Vice President Paul 490 Eastern Ave. in Malden to the BanStanislas and his global practice, plus ner Storage Group for $4.2 million; and Teronda Ellis. She along with Meghan brokered a $3.1 million sale by StoneDenenberg will mark 15 years at the ham-based Brickpoint Partners of a JAMES STUBBLEBINE company in 2017 providing key opera53,000-sf air-freight warehouse facility tional and planning services. at 8-24 Griffin Way in Chelsea to the Included among the firm’s notable Cape Cod Dairy Group. transactions in 2015 was the sale of a Neil Denenberg, founder, president 24-unit apartment complex at 445 Wiland principal broker of Denenberg Relard St. in Quincy that Sudbury-based alty Advisors, also enjoyed a spectacuGebsco Realty Corp. acquired for lar 2015 for his firm. “We had a ban$7.8 million from Willard Associates ner year in 2015 – our best year ever of Quincy, with Denenberg serving as – but this year will be even bigger, a MICAH STUBBLEBINE the lead broker. The market veteran also engineered the sale of a pair of huge year with many large sales (potentially totaling in the $50-million to $100 mil- brick office buildings totaling 32,350 sf at 100lion range),” Denenberg declares. The optimism 124 Crescent Ave. in Needham that Crescent comes from multiple fronts. “We’ve put together continued on page 91

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of these (loans), but we experienced quite a bit in the way of payoffs last year. We still increased our outstandings, but it’s a relatively small percentage from what we’ve done in the past.”

Eastern closed over $500 million in commercial real estate deals last year, a 10- to 15 percent increase over 2014. Similar scenarios were painted by a majority of lenders surveyed, who uniformly reported an uptick in business offset by larger than expected payoffs. Webster Bank Senior VP Claudia Piper conveys GREG REIMERS that the Connecticut-based bank increased business by about 15 percent over the $200 million in production achieved during 2014, but says the level of payoffs was greater than they could have anticipated.

“For us, the difference PETER L. GOEDECKE was that we had some significant payouts that were primed to take advantage of the market—probably years before they had originally expected to sell the property—that were unexpected from the original structuring of the deals, and that was MICHAEL R. LINDGREN true within our whole footprint,” explains Piper. “We had loan growth overall, but we really had to work to make up for the payouts.

People took advantage of a really heated sales market.”

In addition to the banks doling out premature payNICHOLAS K. MOISE offs, many of the core assets in the Boston market were purchased by pension funds and foreign investors—whom industry observers note are often cash buyers—thus bypassing the lending market. Despite those factors, 2015 was still JULIA ANNE SLOM a solid year for CRE lenders, most spoken to relayed. Peter L. Goedecke, managing member at Goedecke & Co., reports that his firm did $1.4 billion in business, after registering just shy of a $1.0 billion in transactions in 2014.

Almost half a billion dollars of last year’s total was

EASTERN BANK AND JP MORGAN JOINED FORCES IN 2015 TO LOAN $46.8 MILLION FOR CONSTRUCTION OF A MIXED-USE PROJECT AT 600 HARRISON AVE. IN BOSTON’S SOUTH END (RENDERING ABOVE) BY NEW BOSTON DEVELOPMENT CORP. FEATURING 160 RESIDENTIAL UNITS AND 3,600 SF OF RETAIL.

bank debt, and 75 to 80 percent of that was for value-add properties, he estimates. “We did a lot of transactions with properties that were not stabilized, where the business plan was to fix and lease them up and sell them, and I wish they were going into permanent loans now—and maybe they will for some of the buyers,” says Goedecke.

“

We had loan growth overall, but we really had to work to make up for the payouts.

”

Claudia Piper Webster Bank Senior VP

Goedecke calculates that acquisitions constituted 45 percent of his firm’s dollar volume last year, a higher than average share. Refinancings accounted for 38 percent, with the remainder of the loans (17 percent) directed towards construction deals. “The acquisition cycle was very strong last year and is showing every sign of continuing this year,” he opines. “There aren’t a lot of places in the economy where people can get yield with some safety, and real estate still offers that in relation to most asset classes.”

Moise reports Eastern Bank saw a 65- to 35 split between term and construction financing in 2015, with approximately 25 to 30 percent deployed to both multifamily and office product, 15 percent to retail, with self-storage, hospitality and industrial receiving the remainder of the bank’s business. Eastern’s deals included

partnering with JP Morgan to provide a $46.8 million construction loan to New Atlantic Development Corp. for 600 Harrison Ave., the South End mixed-use project comprised of 160 apartments and 3,600 sf of retail; providing $17.4 million in refinancing for the Kensington Investment Cos. headquarters at 347 Congress St. in Boston’s Fort Point Channel; and $10 million in refinancing for H Mart, the Asian grocery store and restaurant located in Burlington, MA. Moise is anticipating a slowdown in business this year, but adds “we’re just trying to be conservative (in our estimates). We’re still expecting a couple hundred million in payoffs this year, but it’s a function of the market. It’s not that we or (any other lenders) are doing anything wrong, it’s just that a lot of investors are taking money off the table and selling at record prices.”

Piper conveys that Webster Bank had a fairly even split between construction, acquisition and refi lending, with most of the deals involving assets inside Route 128, particularly in the Boston/Cambridge market and the inner suburbs, especially for multifamily. Webster emphasized strengthening relationships with existing customers rather than pursuing a wide net strategy in 2015, and that blueprint reaped rewards.

“Our focus last year was working with sponsors that we either have relationships with or that we know, and we really tried to work on those,” explains Piper. “Because there was so much activity, you really had to pick your battles and handicap a deal, and our method really increased our hit ratio, which went up significantly last year.”

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mortgage for One Cabot Rd., a 309,000-sf office building located adjacent to the Wellington Circle MBTA station in Medford that the firm is renovating. Webster also provided Davis with $16.8 million in financing towards acquiring the 94,500-sf VHB headquarters at 101 Walnut St. in Watertown for $23.0 million. And the fortified relationships with select sponsors allowed Webster to finance product types outside of their usual comfort zone, such as the $30.0 million acquisition and renovation loan provided to Davis for the Boston/Woburn Marriott. “We felt comfortable going after deals (with those sponsors) even though they were non-traditional assets or had complicated structures,” Piper affirms.

Brookline Savings Bank was also the beneficiary of another Davis Cos. buying spree in 2015, with the institution providing a seven-year, $40.5 million acquisition loan towards the $52.5 million purchase of a pair of Class A office buildings located at 1025 and 1075 Main St. in Waltham.

“We had a great year last year, very busy, and it’s starting off this year in the same fashion,” relays senior VP Darryl J. Fess, whose bank originated over $500.0 million in CRE loans in 2015.

The deals were essentially split between refi and acquisition, with some construction loans in the mix. There were a number of office deals (mostly B quality space) and the bank also financed a couple of non-branded hotels in Rhode Island.

Brookline also provided $20.5 million in construction/permanent mortgage financing for a joint venture between Grossman Cos. and Waypoint Cos. to construct 80 apartment units (with ground floor retail) at 61-83 Braintree St. in Allston, as well as monies for some multifamily refinancing. “The market is very competitive right now, so we’re seeing a lot of requests for interest-only, and we’re doing our best to keep that in check,” reports Fess. “There’s a lot of banks and credit unions out there that we’re competing against, and those are our primary competitors, because with Fannie and Freddie, their rates are probably a little bit higher than we would end up doing.”

Gerry Nadeau, Executive VP and senior lender at Rockland Trust Co., recounts that his bank had another solid year, originating $312 million in CRE loans across all asset classes in 2015, highlighted by financing deals involving an unlikely product type—hotels. “Hotel activity, both for us and the marketplace, was very active last year,” says Nadeau. “What was interesting was that most of it was the repositioning of assets— with (borrowers) doing significant upgrades and/ or flag conversions. And there was some new

WEBSTER BANK LOANED $44.9 MILLION IN JANUARY 2015 USED TO UPGRADE A FIRST-CLASS 309,000-SF OFFICE BUILDING AT ONE CABOT RD. IN MEDFORD THAT THE DAVIS COS. PURCHASED FROM ARES MANAGEMENT FOR $53 MILLION, A DEAL NEGOTIATED BY JLL. A DAVIS COS. REDESIGN OF THE 27-YEAR-OLD PROPERTY HAS JUST BEEN COMPLETED.

out-of-ground construction, with more extended hotels being favored.Three of our top ten deals by size last year were hotels that were rebuilding, repositioning, or re-flagging an existing facility.”

“

Our business is growing and we’ve worked with clients on some great projects with plans to do more in the city.

”

Greg R. Reimers JP Morgan Northeast Regional Manager

But hotels were just a thin slice of the overall pie for Rockland Trust, which also originated a $27 million loan for Sam Park & Co. to develop The Point, a 540,000-sf mixed-use project located along Interstate 495 in Littleton; $15.2 million in acquisition financing (towards the $20.6 million total) for Brickman Associates’ purchase of 186 Lincoln St. in Boston’s Leather District; and $12 million in refinancing to Roche Brothers Supermarkets for the 338 Washington St. location in Westwood. Rockland Trust continued its expansion in urban markets, doubling their space at Arch Street in Boston as well as in the G-Tech Building in Providence “in order to attract enough candidates to fill all of our positions,” says Nadeau.

South of the Massachusetts border, Westerly, RI-based Washington Trust’s Senior VP Julia

Anne Slom reports that CRE closings increased by approximately 12 percent over the bank’s 2014 output, again topping the $300 million mark. “But it was the same as 2014, we were doing a tremendous amount of business but we felt like we were running in place because of all the payoffs,” says Slom. “We had good growth in the portfolio, with the bulk of our business being either construction or acquisition and not that much refi business.”

Similar to 2014, Washington Trust spread the majority of its lending across Rhode Island, Massachusetts and Connecticut, but financed projects in other states such as New Jersey and Pennsylvania for select customers with which they had existing relationships. Among the 2015 highlights were the $25.0 million refinancing the 17-building, mixed-use Village at South County Commons located in South Kingstown, RI for SCC Investments and Green Tree Realty;$20.7 million in acquisition financing to Linear Retail Properties towards the $34.2 million price tag for Eaglewood Shops, a 77,558-sf shopping center located at 175 Turnpike St. in North Andover; and $21.2 million loaned to The Real Group II, LLC, for the refinancing of eight separate Class A and Class B industrial and flex office buildings located in Windsor, CT. Washington Trust also provided financing for a number of parking lots, including the $12.3 million refinancing of three Boston area lots in Jamaica Plain, the North End and Medford for LAZ Boston Commuter Lots.

The success Washington Trust has found with financing projects outside of New England has the bank contemplating expansion. “We continued on page 90

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are thinking a lot about our real estate group and how we can thoughtfully expand,” says Slom. “So there’s definite support for following existing clients farther afield.”

Cambridge Savings Bank leaders found their 2015 success ($530 million in CRE loans, a double-digit percentage increase over 2014) much closer to home, with 90 percent of its business Inside I-495, but the bank had a refrain similar to others in also being hampered by early payouts. “Those loans that you put on the books in 2011-2013—acquisition/rehab/construction— a lot of them were paying off,” loan officer Michael Lindgren tells Real Reporter. “But overall it was a very good year for us in terms of production and earnings (a record), and for maintaining reasonable margins on our loans.”

WELLS FARGO BANK LOANED $102.7 MILLION IN PERMANENT FINANCING FOR 125 AND 150 CAMBRIDGEPARK DR. IN CAMBRIDGE TO CBRE/GLOBAL IN JAN. 2015, BARELY TWO MONTHS AFTER THE BORROWER’S NOV. 2014 PURCHASE OF THE TWO FIRST-CLASS OFFICE BUILDINGS FOR A CONSIDERATION OF $163 MILLION.

“

The acquisition cycle was very strong last year and is showing every sign of continuing this year.

”

Peter L. Goedecke Goedecke & Co. Managing Member Lindgren says CSB divided business equally between construction, acquisition and permanent (5- to 10-year) loans, and were very diverse in terms of product type, financing a wide spectrum of assets, including senior housing, ground-up construction, office and retail, as well as some condominiums in the Back Bay and a number of multifamily deals (including one- to eight-unit rehabs prevalent in the core markets).The lender had a number of notable multifamily construction deals, providing $37.2 million in construction financing to Quincy Mutual Fire Insurance Company and Gate Residential Properties for the first phase of West of Chestnut, a 169 unit luxury apartment complex in Quincy Center; $18.5 million to Wood Partners to build 88 rental units at 37 Washington St. in Melrose; and a $35 million construction loan to San Diego-based Fairfield Residential to build 225 luxury apartments in Marlborough.

“We continue to compete on rate, primarily because we tend to be relatively conservative in terms of loan-to-value, loan-to-cost, and knowing we’re not going to be the lowest cost provider, we tend to offer much more creative structuring and certainty of execution,” says Lindgren.

JPMorgan Chase Bank is increasingly making

WASHINGTON TRUST HELPED LINEAR RETAIL PROPERTIES STEP UP ITS GAME VIA A $20.7 MILLION DELIVERED TOWARDS THE $34.2 MILLION PRICE TAG FOR EAGLEWOOD SHOPS, A 77,558-SF SHOPPING CENTER AT 175 TURNPIKE ST. IN NORTH ANDOVER.

its presence felt in Boston, as evidenced by the $68.2 million mortgage provided to Jamestown for the Davenport at 25 First St. in Cambridge, (which Jamestown acquired in November of 2014), and $50 million to Extra Space Properties to refinance assets in Quincy and Danvers. “We are expanding our footprint in priority markets, like Boston, by increasing our real estate lending activities with select clients,” says Greg Reimers, Managing Director and Northeast Regional Manager of Real Estate Banking at J.P. Morgan.

“Our commercial real estate business is growing and we’ve worked with clients on some great projects with plans to do more in the city.”

In addition to the large deals, JPMorgan Chase has been making an impact in the small to mid-size loan business, providing loans totaling $18.5 million to refinance the Herb Chambers auto dealership in Westborough; $4.5 million in refinancing to Greenway Court LLC, (managed by Mark Pearlstein) for a 12-unit apartment complex at 10-12 Greenway Ct. in Brookline; and a $12.6 million mortgage for a trio of multifamily apart-

ment buildings in Cambridge for Resource Capital Group. “Across the country we see strong lending competition which is no different in Boston,” says Reimers. “The city has a number of mid-size regional banks that have an appetite for commercial real estate – and they’re good lenders.”

JPMorgan Chase was joined by other “Big Banks” operating in the region, among them Wells Fargo, whose deals included $102.75 million in permanent financing for 125 and 150 Cambridgepark Dr. provided CBRE Global Investors (which purchased the assets in November 2014 for $163 million), as well as $106 million in acquisition financing to the Rockpoint Group to purchase the Renaissance Boston Waterfront Hotel. Bank of America was also active in large and small financings, from a $63.4 million loan to an affiliate of WS Development to develop 11 Seaport Blvd. and a $35 million refi loan to RK Centers for North River Plaza in Pembroke and a $1.8 million refinancing to ADGA Realty LLC for a pair of convenience stores in Canton and Holyoke. continued on page 91

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Road Realty II (managed by Louis and Cynthia Wolfson) acquired from M&R Realty Trust and Robert Savignano of Needham for $4.25 million; as well as a land parcel in Salem (355-373 Highland Ave.) that was sold to Cinemaworld of Florida for $2.0 million to develop an entertainment complex. Senior VP John F. Cremmen also brokered a number of trades, including the $3.6 million sale of a former Enterprise Rent-ACar site at 248 Dorchester Ave. in South Boston to be redeveloped into a six-stoSCOTT HUGHES ry, 33-unit apartment building by Evergreen Property Group; and the former M. A. Peacard Co. sheet metal building at 1250 Massachusetts Ave. in Boston sold to the Dorchester Brewing Company for $3.3 million.

Industrial specialists BRET O’BRIEN The Stubblebine Company/CORFAC International also had their “best year ever” in 2015, and 2016 looks better than last year, conveys David Stubblebine, the firm’s president. “No one wants to get cocky here, because we’re been through our down times, and we know the music will stop playing at some point, but right now it’s playing loudly and we want to make hay while the sun shines.”

Stubblebine’s largest transaction in 2015 was the $12.2 million sale of 10 Creek Brook Dr. in Haverhill, a 108,689-sf climate-controlled industrial building Marwick Associates dealt to user C-F Cold Storage. James Stubblebine and David Stubblebine represented the buyer in the transaction, while Mark Reardon and Jason Levendusky of CBRE New England advised the seller. “We had a long-term relationship with the

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Life companies appeared to be less robust in the market in 2015, but still provided financing for a number of large dollar volume, stabilized assets as well as some smaller deals. New York Life Insurance Co. provided $600 million in financing for the Demoulas family to re-acquire the Market Basket real estate portfolio, a $1.2 billion deal negotiated by the retail unit of Robert E. Griffin Jr.’s Capital Markets team. Northwestern Life supplied the Watertown Gables LLC (managed by Gables Group) with $72 million to

227-233 SOUTH ST., HOPKINTON MA

tenant and we were looking for them already, so when the property became available we were able to get it to the right guy, and he jumped all over it,” says David Stubblebine. Other notable transactions for the firm included the $3.1 million sale of the 56,000-sf industrial building located at 20 Commercial Dr. in Dracut to 303

Broadway Nominee Trust from the LB Investment Group LLC (with Micah Stubblebine representing both parties); and the $2,075,000 sale of 170 Lincoln St. in Lowell to Patriot Care, LLC. Bret O’Brien, President of Greater Boston Commercial Properties, reports that unlike many of the independents, the majority of his transactions were with private investors. “There were some user-owner deals, but more private investors looking to buy properties for the income stream,” he says, while further reporting that most deals were in the 7 percent capitalization rate range. Indicative of that trend was the $3.9 million trade of a 57,750-sf flex building locat-

ed at 661 Pleasant St. in Norwood. O’Brien procured the buyer, Dingley Dell Estates, LLC who acquired the property – which was 95 percent leased at the time of the sale to eight tenants – from an affiliate of the Brookline-based Mackin Group.

Other notable closings in 2015 included the $2.6 million sale of an 87,000-sf manufacturing building at 125 Depot St. in Bellingham from R&T Realty Associates to Bellingham Investments, Inc. The buyer is an affiliate of Ace Torwell, a group intending to occupy the building whose purchase was enabled by UniBank for Savings financing of TERONDA ELLIS $2.58 million. GBCP is also off to a strong start in 2016, with the firm representing an affiliate of Marlborough-based RMA Management in the $5.5 million sale of a 57,000sf mixed use (retail/office) property located at 57 E. PAUL STANISLAS Main in Westborough to Astero Management LLC. “2015 was a great year for us,” says O’Brien. “It was and still is just a question of finding the product. If you can find a property to sell and it’s priced properly, it will definitely sell. The market is very, very strong right now so it’s a great time to be selling.” u

construct 300 residential units and 37,000 sf of retail at 202-204 Arsenal St. in Watertown; Sun Life Assurance Co. of Canada provided $37.7 million to Forest City Enterprises that landlord used in refinancing their life science facility at 88 Sidney St. in Cambridge; and Allianz Life Insurance Co. of North America provided a $75 million refi loan to MIT Investment Management Co. for 700 Main St. in Cambridge.

Regional banks like Citizens, Peoples United, and TD Bank also figured into Greater Boston CRE lending mix this past year, with TD being especially active. The Maine-based bank refinanced a trio of self-storage assets for Ex-

tra Space Properties in Dedham, Ashland and Kingston for $63 million and provided a $35 million refinancing for National Development for 150 Presidential Way in Woburn, as well as a slew of smaller deals involving a variety of property types. And East Boston Savings also had a stellar year in 2015, registering a significant number of transactions, including the $19 million refinance of a mixed use (grocery-anchored retail/medical office) property in Jamaica Plain for Jackson Square LP; and $14.7 in financing for 26 West Broadway, a mixed-use (31 apartments, ground floor retail) project in South Boston for Evergreen Property Group. u

“

Whether it’s on the leasing or sales side, there’s just great activity out there.

”

Garry Holmes, President R.W. Holmes

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by approximately 50 basis points in May, which slowed demand somewhat. But since the loan production caps only apply to market rate apartment loans, Fannie and Freddie found ways to make other capital available to fund affordable housing, small balance loans and manufactured housing that did not count against the cap.

“The big news of 2015 was that Fannie and Freddie were running hot on their volume limits early in the year,” reports Hayley Suminski, Mortgage Banking VP for Hunt Mortgage Group.

“So the big trick (for the JOHN KELLY agencies) was trying to figure what could be excluded from that cap by meeting criteria that met certain affordability thresholds. And they were able to send the message that they were still in business and still had room to lend for the rest of 2015.”

HAYLEY SUMINSKI And lend they did, to the tune of nearly $90 billion. Both agencies hit their $30 billion ceiling, and for the first time, Freddie Mac became the nation’s multifamily lending leader with $47.3 billion in loans, up 67 percent from the $28.3 billion in 2014. Fannie Mae registered $42.3 billion in volume, a 46 percent increase from the $28.9 billion mark set in 2014.

As mentioned, key to the increased volume was originating loans to affordable and workforce housing properties that didn’t count towards the agencies’ caps—including the affordable portions of mixed-income housing. “In Boston— being a high-cost market with a limited supply of moderate and middle-income housing—there was a big push to finance that type of housing,” explains Suminski. “So when a deal was deemed workforce housing, that would be prioritized with the available money that Fannie and Freddie had to work with. And all of a sudden the capital started adjusting towards that type of housing.”

Hunt Mortgage, which primarily works Fannie, Freddie and FHA (HUD) deals, originated $2.5 billion of multifamily loans in 2015 via a combination of agency and proprietary business, with about $500 million originating in the Northeast region. Suminski arranged a number of financings in Greater Boston, mostly utilizing Freddie’s Small Balance Loan (SBL) program designed for deals under $5 million.

JOHN KELLY AND SAM DYLAG OF CBRE/NE’S STRUCTURED FINANCE GROUP SECURED $48 MILLION IN ACQUISITION FUNDING IN JUNE 2015 FOR THE PURCHASE OF 330 UNITS AT 505-509 PLANTATION ST. IN WORCESTER.

Following the $2.3 million refinancing of Market Street Apartments in Cambridge—a 16-unit affordable apartment community comprised entirely of three-bedroom units—using the Freddie Mac CME program, she accessed

“

Some of the growth is simply that the multifamily market has just exploded.

”

Walker & Dunlop Managing Director Andrew Gnazzo on a year when his firm originated over 700 multifamily loans

the agency’s SBL program to provide a $2.6 million acquisition loan for the Gardner Commons, a 60-unit complex located in Gardner; a $3.0 million refinancing of the Chelsea Street Apartments in East Boston; and opened 2016 delivering on a $4 million, 10-Year (three years I/O) refinancing of Maverick Landing, a Class A multifamily property with retail, also located in East Boston. The interest rate for that fixedrate note was 4.1 percent.

Arbor Commercial Mortgage also had great success with the Freddie Mac SBL program (which they helped to develop), becoming

2016’s top lender for the product, which was unveiled in late 2014. Using that program, Arbor originated Massachusetts loans in Lowell (18 Belmont St., 18 units, $1.3 million in acquisition financing) and Quincy (45 Prospect Hill St. Apartments, six units, $1.4 million refi), as well as a trio of loans in Connecticut, including a $1.5 million refi in Danbury, and acquisitions in East Hartford ($1.9 million) and Hartford ($3.1 million).

Arbor also accessed Fannie Mae’s Delegated Underwriting and Servicing (DUS) platform in providing financing for New England multifamily properties, including a pair of sub-$1.0 million loans in Hyannis and Fitchburg as well as five in Connecticut. The latter bunch included $10.3 million towards the acquisition of Brookstone Court Apartments, a 160-unit multifamily property located in West Hartford, and $3.6 million in refinancing for Broadview Terrace Apartments in Hartford.

“The real role of Fannie and Freddie is to inflate when there’s a lack of liquidity and to somewhat deflate when there’s lots of liquidity,” outlines Arbor Vice President John Edwards.

“And by imposing the caps, the thought was that it would allow other sources of capital to come into the market and flourish, but what they quickly realized was that there was not sufficient capital in the market to cover all of the multifamily needs.”

ADVER TISING INFO: ADS@THEREALREPOR TER.COM

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You can develop these beautiful Class A assets with no problem, as foreign investors will just plow in,” Edwards continues. “You don’t need Fannie or Freddie for that. But for B and C assets, you need a stable source of financing.”

Although Edwards declined to give specific numbers, he says Arbor had a “record year” and was named a Top Ten Fannie Mae lender for the ninth consecutive year (with the firm registering its highest ever yearly loan volume with that agency). Approximately 75 percent of the business was refinancing, with the remaining 25 percent acquisitions, and much of the activity coming from repeat customers.

Walker & Dunlop, anDEREK COULOMBE other agency-focused lender with a national scope, experienced “our best year ever by a wide margin,” conveys managing director Andrew Gnazzo. “Overall we did $17.8 billion and we ended up with huge CASIMIR GROBLEWSKI numbers across the board.

But we had the biggest year we’ve ever done with the agencies—$11.9 billion—including over $5 billion each with Fannie and Freddie, and it’s the first time we’ve ever done that much volume.”

DESPINA HATZIPETROU W&D achieved those numbers by originating 700 loans last year, which Gnazzo attributes to the firm’s efficiency in processing deals, though he also concedes that “some of the growth is simply that the multifamily market has TIM O’DONNELL just exploded. I mean, it’s a great asset class that everyone wants to be in, but the values have increased so much in the past three to four years that even if we did the same number of transactions, each transaction is for a much larger number.”

Walker & Dunlop aarranged financing for nearly a half-billion in deals in the Boston metro area during 2015, accessing a combination of sources including Fannie, Freddie and FHA as well as bank and life company monies.Fannie provided funding for a quartet of significant Bay

ARBOR COMMERCIAL AIDED ST REALTY TRUST IN ITS $1.4 MILLION REFINANCING OF SIX QUINCY APARTMENTS AT 45 PROSPECT HILL ST., A PROJECT THE BORROWER HAD OWNED SINCE PAYING $520,000 IN OCT. 2004

State acquisitions, including $94.2 million to Chicago-based Mesirow Financial to purchase 328-unit Batch Yard in Everett; $25.3 million to True North Capital Partners for Richmond Vista at Wakefield, a 114-unit Class A luxury apartment community; and to Bell Partners Inc. to buy two garden-style apartment communities—the

“

The banks got very aggressive in 2015, and in a lot of situations they provided deals even better than your typical agency deal.

”

CBRE/NE First VP John Kelly

164-unit Applebriar Apartments in Marlborough for $27.5 million and the 266-unit Jefferson at Salem Station in Salem for $50.2 million.

The firm also secured Freddie Mac funding for a plethora of sizable refinancings, including Eleven West in South Boston, comprised of 50 residential units and 8,000 sf of retail; and a pair of senior living facilities in Bluebird Estates in East Longmeadow ($22.0 million) and Quail Run Estates Agawam ($18.8 million). W&D professionals also provided a half-dozen FHA loans to refinance smaller properties, and a $35 million note with Guardian Life Insurance

to refinance the 206-unit Watertown Mews in Watertown, MA. “The reality is that even when the agencies increased pricing, for certain deals, they were still the best deal out there. It was almost as if they couldn’t increase (rates) high enough to slow down the tide,” asserts Gnazzo. “But that said, they did significantly fewer high-end, lower-leveraged transactions. Most of that business got taken by the life insurance companies. They were very aggressive and we were losing deals to them by 50 to 60 basis points.”

But life companies weren’t the only competition for Fannie and Freddie, particularly in the Greater Boston market, where banks re-asserted themselves this past year. “The banks got very aggressive in 2015, and in a lot of situations they provided deals even better than your typical agency deal,” affirms John Kelly, First VP of CBRE/NE’s lending arm. “We’re seeing a lot of bank business priced inside your typical agency business here, particularly late last year and into the beginning of this year.”

Nationally, CBRE was involved in $45 billion worth of multifamily transactions, funds which Kelly said were split equally between the firm’s investment sales platform and debt and structured finance. “(Locally) we had a phenomenal year, we did a lot of everything – agency, bank, life companies, for both stabilized cash flowing assets as well as ground up construction deals.

We also started to see a lot more condo deals continued on page 94

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popping up as well. The condo metrics have been dynamite for both developers and end users.”

Among the agency acquisition financings were the $48 million from Fannie Mae for Audubon Plantation Ridge, a 330unit apartment property in Worcester (75 percent LTV), and a $39.0 million Freddie MICHAEL CHASE Mac loan (65 percent LTV) for 240 units at Alta Legacy Farms in Hopkinton. Kelly and financial analyst Sam Dylag also provided $24.5 million in refinancing for the 204-Unit Rolling Green in Amherst via a FHA/HUD 223 (f) loan. The pair also JOHN EDWARDS provided a number of bank loans, including $36 million in acquisition financing for the Taurus Investments/ PhilMor Real Estate JV to acquire the 204-unit Town Homes of Beverly through Santander Bank; $27.75 million from HSBC Bank SAM DYLAG USA for the 180-unit Jefferson at Admiral Hill complex in Chelsea; and $7.5 million to purchase the 55-unit Spring Street Apartments in West Roxbury. CBRE/NE also

JEFFERSON AT SALEM STATION, SALEM MA

provided construction financing on a number of regional projects, including a $14 million construction-to-permanent loan to build the 53-unit

“

Where banks really have an advantage over agencies and life companies is in ease of use for borrowers.

”

Michael Chase, Vice President NorthMarq Capital

Liberty Place in Quincy.

Tim O’Donnell, principal at Fantini & Gorga, observes that while Fannie and Freddie had a

HUNT MORTGAGE GROUP REFINANCED A TRIO OF EAST BOSTON MULTIFAMILY PROPERTIES WITH A 10YEAR LOAN PROVIDED THROUGH FREDDIE MAC’S SMALL BALANCE PROGRAM, A POPULAR PRODUCT IN THE MARKET THESE DAYS. HMG VICE PRESIDENT HAYLEY SUMINSKI GOT THE OWNERS OF 37, 45 AND 47 CHELSEA ST. $3.0 MILLION AFTER OUTDUELING SEVERAL COMPETING LENDERS EAGER TO GRAB A STAKE IN THE RAPIDLY IMPROVING NEIGHBORHOOD. BORROWERS RICHARD T. GARAFFO AND PAUL D. MARKS, PRINCIPALS OF CHELSEA DEVELOPMENT PARTNERS I, NOW HAVE A 4.1 PERCENT RATE ON THE LOAN WHICH COVERS A DOZEN APARTMENTS.

good year nationally, they were less active locally, “because they had far more competition— particularly from the banks. They focused on doing smaller balance loans— under $10 million, frequently under $5 million—and they had a lot of bank competition for those loans. The small, medium and large banks are a very significant factor in this region, and most of the loans that they do are 5 to 7 years, out to 10 years. So they go head-to-head with the agencies, but don’t do as much of the very long term loans.”

O’Donnell reports that Fantini & Gorga had “a very good” year, with a lot of refinancing activity, an increasing amount of multifamily construction requiring debt and equity, as well as acquisition funding. The firm did a “very small” amount of agency business, a lot of bank business and some FHA loans, he says.Derek Coulombe, managing director at Fantini & Gorga, and analyst Despina Hatzipetrou arranged a $17.6 million construction loan for the development of the 34-unit Symphony Court Condominiums in Boston with a regional bank, and Casimir Groblewski, O’Donnell and Hatzipetrou arranged a $13.4 million construction loan through a regional bank for the development of 32 apartments and 4,340-sf of ground floor retail space at 900 Beacon St. Managing Director Mark Whelan arranged $28.3 million in permanent financing with Fantini & Gorga’s correspondent MAP Lender, Eastern Mortgage Capital, using a 35-year, fixedrate, FHA mortgage under the 223(f) program on Exeter Mill Apartments, a 161-unit multifamily property in Exeter, NH. Michael Chase, vice president at NorthMarq Capital, is another industry observer who feels the banks have a competitive edge. “Where banks really have an advantage over agencies and life companies is in ease of use for borrowers,” opines Chase. “They can come in and they don’t have these non-negotiable docs that Fannie and Freddie put in front of you, and they continued on page 95

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SALVATORE LUPOLI continued from page 26

each component will be 70 percent leased by the spring of 2017.

Lupoli also followed up last year’s opening of the $15.5-million, 30,000-sf Andover Medical Center by acquiring an adjacent site to build an additional 40,000-sf facility. Construction is well underway and is expected to be completed

by December 2016. The facility is 100 percent pre-leased, with Lawrence General Hospital (which also occupies an entire floor of the first building) as the anchor tenant.

“The whole vision behind the project was that I wanted to bring quality healthcare – out of Boston – to the area, because there was a huge need,” recounts Lupoli. “I spent an extra $50 per square foot (over the protestations of his architects) because I wanted something unique that looked like Boston hospitals. So Lawrence General Hospital came to us and they (pre-leased) 10,000 sf, and before I knew it they were up to 30,000 sf, so the building was completely occupied before I even stuck a shovel in the ground.”

Lupoli has several other developments in the pipeline, including additional expansion on the Riverwalk campus, made possible by the acquisition of Buildings C and D in the four-structure Wood Mill abutting the Riverwalk development, which he acquired for $38 million in March 2015. As Real Reporter outlined at the time, Lupoli had strived for several years to complete the loop, and did so thanks to $31.3 million in agency funding provided by Arbor Commercial Mortgage arranged by Sean Herlihy of Goedecke & Co. which was piqued by a 203-unit apartment complex in Building D.

MULTIFAMILY DEBT continued from page 94

don’t have the reporting requirements. In some cases, they might have to do some recourse or some guarantees, but we’re finding that more and more clients are willing to stand behind their deal for that ease of use.”

NorthMarq accessed the full spectrum of multifamily capital sources in 2015, from agencies and life companies to large and small banks, and did $5.7 billion in multifamily nationally (not including mixed-use properties which may have had a multifamily component). Local highlights included the $54.3 million refinancing of a five-building, 217-unit portfolio of apartments in the Fenway neighborhood of Boston on Hemenway Street and Symphony Road through a life company; the $9.5 million refinancing of the

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The firm has now broken ground on 56 market rate apartments, with further development to follow.

Lupoli is also redeveloping an 18,000-sf shopping plaza in Salem, NH that is anchored by a Sal’s Pizza. Following demolition of the

95-year old building which currently houses the restaurant, as well as an adjacent building, three new buildings will be constructed.

In yet another interesting venture north of Boston, Lupoli also recently permitted a 15acre site in Andover/Tewksbury at the junction of Dascomb Road and Interstate 93, at which he plans to build 580,000 sf of retail and office space. Thompson Real Estate was involved in that effort, and Lupoli says he is eager to get that moving. “We see this project as a mixeduse development that will be very much like Legacy Place in Dedham or MarketStreet Lynnfield,” says Lupoli. “It will be a marketplace with about 100,000- to 125,000 sf of retail, a boutique hotel, corporate headquarters, and we’re already being asked by medical providers in Boston looking to come.” u

136-unit Jenkins & Madbury Apartments (with 14,000-sf of retail) in Durham, NH, through Fannie Mae; a $4.5 million FHA refi of the 165unit Holyoke Hill Apartments in Holyoke; and a $3.9 million refi of the 60-unit WBC Estates in Manchester, NH. Although Fannie and Freddie had banner years, HUD is undergoing some growing—or to be more accurate—transition pains. HUD originated $9.5 billion in multifamily loans, but as Berkadia Vice President Gemma Geldmacher maintains that while “it was a difficult year for HUD in 2015, but I think most of the lenders are trying to put that behind them because of what is coming up in 2016.” Berkadia is the nation’s largest HUD lender.

HUD is undergoing what the agency calls its Multifamily for Tomorrow (MFT) Transformation, a program that will fundamentally “change the

way we work from a 1970’s operating model to a 21st-century model that applies industry best practices…” according to their website.

“I honestly think you’re going to see a revival of the HUD product, because they’re really trying to make it more competitive and I think between the transformation and some of the new changes, they’re really removing a lot of the obstacles while keeping it at the best pricing in the market,” opines Geldmacher. Berkadia originated 91 HUD loans totaling nearly $1.1 billion during fiscal year 2015, including a $10.5 million HUD loan modification for 232unit Apple Village Apartments in Beverly. Berkadia was also the second largest Freddie Mac Program Plus lender and the third largest Fannie Mae DUS lender for multifamily loans in 2015, including a $148.6 refinancing of the 696-unit Garden Crest Apartments in Waltham. u

“

Most of my projects have a job creation component . . . because that’s what I like to create.

”

Salvatore N. Lupoli Developer/restaurteur

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of the heap, including a number of construction financing requests.

“It is no surprise there was a lot of that last year—multifamily has been a very active market for some time, and we have been able to capture some good market share,” says Cassum, one 2015 example being $41.8 million to Campanelli and Thorndike Development for construction of 188 units in Norton.

Managing Director Greg LaBine and Analyst Patrick McAneny negotiated the Norton loan at 274 East Main Street where $25 million in construction financing was paired with $16.8 million of mezzanine CHRIS COUTTS debt, the latter delivered

by Cornerstone Real Estate Advisers whereas First Niagara Bank was lender on the construction loan. Due for completion this year, the complex will have a clubhouse, fitness center, game room, outdoor patio TAYLOR SHEPARD and playground set amidst a tree-lined neighborhood the developers designed to mimic the feel of a Back Bay neighborhood.

Besides “stellar” track records, LaBine explains the borrowers were already familiar with the development partnership given First Niagara/Cornerstone had joined forces in 2014 through HFF to loan $60 million on a 262-unit project in Norwood known as Upland Woods.

Between the two transactions, HFF raised 85 percent and 90 percent combined non-recourse financing, and in so doing, LaBine says “the borrower was able to keep 100 percent of the upside in the deal, while having the comfort that, once stabilized, there would be a way to pay off all of the construction debt with a permanent first mortgage,” outlines LaBine.

The lending community was stirred both by market fundamentals and the joint venture bringing together an experienced developer and manager of commercial space and the Thorndike background in residential development.

Those two skill sets combined made for a good story,” says LaBine, adding lower rents in suburban versus urban was another comfort point for the lending community given it expands the tenant pool.

Much like his colleagues, LaBine was hardly a one-trick pony in financing activity last year,

CHARLES RIVER PLAZA NORTH, BOSTON MA

CAMPANELLI AND THORNDIKE’S MULTIFAMILY PROJECT AT 274 EAST MAIN ST., NORTON MA (RENDERING)

having also led the effort to secure $74.2 million in floating-rate financing on 830 Winter St. in Waltham, that a 182,000-sf first-class laboratory facility bought in July 2015 for $104.2 million by King Street Properties and an affiliate of Carlyle Realty Parnters, with Wells Fargo stepping up in that instance.

In a four-pronged assignment last year, HFF and LaBine arranged over $50 million in financing for Linchris Hotel Corporation in four separate transactions during a two-month timeframe for Linchris Hotel Corp. The properties financed are: the Holiday Inn Express Springfield in Springfield, Vermont; the Holiday Inn Express Poughkeepsie in Poughkeepsie, New York; the Howard Johnson Hialeah Gardens in Hialeah Gardens, Florida; and the Wyndham hotel in Andover, Massachusetts.

All of the loans were fixed-rate with the

exception of the Hialeah Gardens property. The 293-room Wyndham at 123 River Rd. in Andover is being converted to a Doubletree Hotel.

LCP Andover Hospitality, which paid $14 million for the property in April 2015 borrowed $16.8 million from East Boston Savings Bank through the HFF initiative. The team was led by LaBine and McAneny, and the Boston group was also supported by HFF Associate Director Scott Wadler and Analyst Maxx Carney on the Florida transaction.

“These deals had quite a lot of variety. Two were refinances, while the other two were acquisitions that involved significant capital improvements and rebranding of the flags,” explains LaBine, further conveying one involved a leasehold mortgage where the land was held in a common law TIC dating back to 1966. The continued on page 97

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lenders included two CMBS lenders, a hedge fund and a bank. There was however one common theme that unified these deals, he offered: “In all cases, Linchris’ track record of providing the highest level of service to their customers while operating their hotels to an exceptional profit margin was the compelling feature that made these transactions a success,” LaBine says of the homegrown operation that is based in Hanover.

GREG LABINE “We were ecstatic with the funding that HFF was able to procure,” Linchris CFO Glenn Gistis said after the conclusion, adding, “They succeeded beyond our expectations.”

LaBine and McAneny handled a major urban fiBRETT PAULSRUD nancing as well last year, assisting Synergy Investments in providing first mortgage financing on 185 Dartmouth St., the erstwhile 441 Stuart St. located in the heart of Boston’s Back Bay. Loan proceeds of $55 million secured from JONATHAN SCHNEIDER HSBC Bank is being used to pay off existing debt on the building and provide capital to complete Synergy’s business plan and return equity upon stabilization. According to LaBine, HSBC Bank “provided a flexible financing alternative for this transaction,” with pricing reduction over time as the 11-story, 165,000sf building meets certain objectives. “Synergy’s track record of success, the high quality rehabilitation of the property and the tremendous location of the asset made this an attractive opportunity for HSBC,” LaBine outlines.

Another urban refinancing on a mega-scale was provided in 2015 on an assignment Cassum oversaw, that $345 million of first mortgage financing and mezzanine debt for Charles River Plaza North, a 355,000-sf office/research building adjacent to and long-term leased by Massachusetts General Hospital. HFF worked on behalf of Davis Cos. and Marcus Partners Inc., developers and owners of the property who received $245 million in fixed-rate debt from UBS and a $100 million mezzanine loan with TIAA-CREF. HFF also arranged the 2007 loan that was refinanced under the latest ar-

1025 AND 1075 MAIN ST., WALTHAM MA

ranagement.

Charles River Plaza North at 185 Cambridge St. is part of the larger 630,000-sf Charles River Plaza mixed-use complex the partnership completed in 2005 that features a CVS, Schepens Eye Institute and Whole Foods Supermarket.

“We are extremely proud to be involved with such a world-class project that represents Boston’s strong presence in the field of medical research,” says Cassum, whose firm also arranged construction financing for Charles River Plaza back in 2003.

HFF in 2015 separately assisted Davis Cos. when the Hub-based firm led by namesake Jonathan G. Davis bought a pair of office buildings in Waltham at 1025 and 1075 Main St. totaling 303,000 sf that were acquired for $52.5 million.

Brookline Bank and First Niagara Bank teamed up to loan to the buyer $40.5 million in a seven-year note arranged by LaBine and Brett Paulsrud. The HFF Capital Markets team brokering the sale was Senior Managing Director Coleman Benedict and Director Benjamin Sayles.

Overall, Cassum says 2015 proved a season disaffected by interest rate concerns where nearly all forms of financing was available. “We have one of the most liquid markets in the country,” he says. “We have a strong number of local and regional banks and then you combine that with all the national banks who want to be here plus the life companies, and that provides a lot of options for borrowers.”

One conduit that has shown varying signs of recovery is CMBS financing, but risk retention and a skittish stock market have skewed much of their competitive advantage, says Cassum, adding, “I think it is going to be a disappointing year for CMBS. The market is pretty choppy right now for them.” Another trend espied last year was that HFF saw three times as much interest for fixed-rate loans versus floating rate, and the firm continues to build relationships with international debt sources, a platform Cassum has a direct role in which has him traveling constantly to Europe, the Pacific Rim and even the Middle East.

HFF assisted a Gotham developer in getting a major Middle East loan last year, and while that group has not yet committed to Boston, Cassum maintains that “for the right project, I think they would be interested in coming here.”

Plying the global debt markets, Eastdil Secured participated in a $300 million recapitalization of 75 State St. at the behest of owner Brookfield Office Properties as the erstwhile owner of nearby Exchange Place at 53 State St. (sold in 2011 to UBS Investments for $610 million) carved out a 49 percent ownership stake to an Australian fund advised by US-based Principal Life Insurance Co. Dating to 1987, the opulent LEED Platinium tower has 770,725 sf of office space, 25,000 sf of retail and a parking garage housing 685 continued on page 98

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parking spaces. Tenants there include CDM Smith, law firm Hemenway & Barnes, LPL Financial and Santander Bank. Occupancy was 98 percent at the time Eastdil was engaged to find a minority partner.

Melbourne-based AustralianSuper is the fund taking down 49 percent of the 31-story building, with its Boston commitment the largest to date in a campaign to buy into offshore CRE that has already brought the pension fund’s resources to Honolulu and London. The entity which has over $81 billion under management acts on behalf of two million members.

The recapitalization at 75 State St. was a full-out effort by the debt and equity placement teams at Eastdil Secured, the contingent including Brian Barnett, Peter Joseph, Sarah Lagosh, James McCaffrey, Molly Padien-Havens and Steffen Panzone from the Capital Market team.

Lagosh took the lead there along with Jeffrey Scott, while AustralianSuper was counseled by James Halliwell and Daniel Thornton of Principal Global Investors.

Besides retaining majority ownership, Brookfield will continue to provide leasing and management services at 75 State St. Eastdil was also engaged by Oxford Properties Group and JPMorgan to finance their 2015 acquistion of 222 Berkeley St. and 500 Boylston St. in Boston’s Back Bay, a deal also orchestrated by Eastdil (see story, lead editorial page). For the debt program, Eastdil was able to secure a 50 percent LTV of $648.4 million on the towers which collectively total 1.2 million sf. Eastdil debt ace James Cristofori was on that assignment, as were Nick Seidenberg and Ken Ziebelman. Eastdil principals declined to comment on any of their debt or equity endeavors as a matter of company policy.

Cristofori, meanwhile, received new support for the Boston debt operation with the August arrival of Carlos Febres-Mazzei and Alex Bradley from CBRE/NE. Prior to departure, they had worked on two major transactions at a firm where they had been for several years, financing a 30-story luxury mixed-use tower for Samuels & Associates in which $300 million was arranged in debt and equity, including $179.6 million in construction funding for the venture known as Pierce Boston.

CBRE/NE worked on that loan for Fenway Ventures Point Properties LLC where JPMorgan Chase Bank financed the construction piece.

The two also helped on the CBRE/NE assignment when Anchor Line Partners bought 200 Smith St. in Waltham, in August, loaning $83.5

CHARLES RIVER PLAZA NORTH, BOSTON MA

million for that 326,000-sf facility whose June $39.5 million purchase was brokered on the sales side by CBRE/NE. The lender was a Luxembourg debt provider, with other members of the CBRE/NE team there and for Pierce Boston including Chris Coutts, Kyle Juszczyszyn and Taylor Shepard.

“

When a deal was deemed workforce housing, that would be prioritized with the available money that Fannie and Freddie had to work with.

”

Hayley Suminski Hunt Mortgage

Speaking of the CBRE/NE debt division, they were also active across many product lines last year, with John C. Kelly helping multifamily borrowers (see story, page six) while Juszczyszyn, Coutts and Shepard have backgrounds in nearly every other CRE discipline.

In one spring 2015 assignment, the Debt & Structured Finance crew helped Brickman Real Estate secure $15.5 million from Rockland Trust Co. in its $20.6 million purchase of 186 Lincoln St. in Boston’s Leather District. Sale of the 68,525-sf office building on behalf of Morris & Morse Co. was brokered by the CBRE/NE Cap-

ital Markets team, that group including Chris Angelone, Jessica Dowd, Bruce Lusa and John Meador, with the debt arranged by Juszczyszyn, Bradley, Coutts, Febres-Mazzei and Shepard.

In a late-season acquisition financing effort, Juszczyszyn, Coutts and Shepard helped Calare Properties buy a trio of 100-percent leased industrial buildings in Middleborough from Campanelli, the borrower paying $15.07 million for 139 Campanelli Dr. and 19 Leona Dr. and $10.3 million on 16 Leona Dr. There was $6.7 million arranged from Blue Hills Bank for that 80,000-sf flex/industrial building occupied

by IDEX Health & Science, whereas the same lender delivered $9.8 million backed by the remaining two assets, 19 Leona Dr. a 108,000 sf structure dating to 1998, its tenant a Berkshire Hathaway company, Sager Electronics, and 139 Campanelli Dr. occupied by Stop & Shop Supermarket Co. It contains 85,000 sf.

“Blue Hills Bank was able to provide competitive financing terms for both loans and close in 30 days from a signed application,” recounts Coutts. CBRE/NE was on the job later in 2015 helping old friend Samuels & Associates find a joint venture partner and first mortgage financing for its mixed-use Launch at the Hingham Shipyard on the South Shore. The Juszczyszyn/ Coutts/Shepard trio attracted JV partners Principal Real Estate Investors and got MetLife to pony up $43.9 million in debt for 18 Shipyard Dr. continued on page 99

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`“We are pleased to have assisted Samuels & Associates, Legacy Capital Partners and their affiliates in sourcing . … this joint venture, (creating) an ideal partnership combining premier local expertise with an exceptional institutional platform,” Juszczyszyn said later, adding, “After running a competitive marketing process for the permanent financing, we identified MetLife as the lender, which was able to provide highly competitive financing terms and rate lock ahead of the scheduled closing date.”

The Launch at Hingham Shipyard is a 245,000-sf waterfront destination mixed-use center that is currently 95 percent leased. Samuels & Associates built the Launch in 2009 as a part of a master plan for Hingham Shipyard.

Comprised of shopping, dining, entertainment and luxury living, the Shipyard currently includes a 235-unit apartment complex and a 150-unit for-sale townhome development, with more housing units planned for the near future.

For the JLL Debt & Structured Finance team led by Heather Brown and Jonathan Schneider, 2015 in some respects was a tale of two cities in helping two borrowers finance major office buildings in Hartford, and doing the same in downtown Boston. “We did a fair amount of that,” Brown tells Real Reporter in putting the year’s loan proceeds delivered in the $1.6 billion range covering approximately two dozen commitments. The Hartford loans were on behalf of Paradigm Properties and its 38-story CityPlace I complex bought through the JLL Capital Markets division led by Christopher Angelone and Frank F. Petz, whereas Constitution Plaza was secured by DHM, that complex another JLL exclusive listing.

“We had a wide variety of collateral types

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and stages of financing,” says Brown, with borrowers including Anchor LIne Partners on a Waltham venture and DivcoWest. As with other shops, fixed-rate loans were popular for JLL clients, she says, some five-year terms but others taking seven- and 10-year terms with rates in the 4 percent range. “That’s pretty appealing” for a long-term borrower, observes Brown.

JLL also found the banking community most competitive in the realm. “It wasn’t even close,” says Schneider. “We did more with the banks than any other type of lender.” Of the $1.6 billion, upwards of $200 million were CMBS lenders, he says. “That isn’t a small dollar amount, but it was mostly in a couple of large transactions earlier in the year,” explains Schneider, adding, “After June, it got a lot trickier” and he is among those concerned whether macro forc-

es will set back what had been an encouraging rebound to begin 2015.

Other financings of note for JLL in 2015 included the office/data storage building at 230 Congress St. in Boston, another property that sold through the Capital Markets division for $77 million in late September. Buyer Northwoods Investors then borrowed $53 million from Midwood National Life Insurance Co..

Across the river in Cambridge, Beacon Capital Partners sourced JLL to find a lender at 2-12 Canal Park, a three-building assemblage the hometown company went on to sell this spring, a $304 million consideration from Intercontinental Real Estate Corp.

Prior to that divestment, Beacon Capital borrowed $75.2 million from Bank of America u via the JLL debt contingent.

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those of a fringe market until a city-led campaign targeting technology companies paid off, overnight pushing rents past those in the venerable Financial District and drawing a Who’s Who of investors ranging from the Davis Cos., DivcoWest and Spear Street Capital to Related Beal, Synergy Investments and TIAA-CREF, all early birds who have reaped handsome returns in harvesting their holdings to a new wave of capital, with several Seaport District deals completed in 2015 that crested $100 million.

No one less than Tishman Speyer stepped in last autumn and paid an impressive $316.5 million to acquire One Channel Center from a partnership of Commonwealth Ventures and AREA Property Partners, that deal also negotiated by the Newmark Capital Markets team under the Cushman & Wakefield flag RICHARD GALVIN where the contingent had worked until last September (see story this issue).

Tishman was already enthralled by the Seaport, having acquired the prized Anthony’s Pier Four development site in spring 2015 in partnership with Chinese LEE NEIBART equity, that deal estimated at $500 million. Perched right on Boston Harbor, the attraction there was easy to see, but with One Channel Center landlocked, its tenant was the thing drawing interest as headquarters to financial services kingpin State Street on a long-term commitment. The trade also included a nine-story, 980-stall garage next door at 116 West First St. Richard Galvin is founder of Commonwealth Ventures, while Lee Neibart is CEO of AREA. The developers had paid $10 million in 2012 for the garage site and purchased the parcel that would house One Channel Center from Beacon Capital Partners in 2007. “They did an incredible job, and that shows from the tremendous interest we got,” Griffin said of his clients after the buildings closed the first week in December, that deal initially relayed at therealreporter.com last October. The 11-story, 500,000-sf One Channel Center opened a year ago and houses nearly 3,000 employees.

Right next door, 10-20 Channel Center fetched an even $100 million when Beacon Capital Partners divested that 251,400-sf building now owned by a partnership of Callahan Capital and Ivanhoe Cambridge. Closer to the

THOMSON FINANCIAL PORTFOLIO, BOSTON MA

waterfront, Crosspoint Associates was rewarded on its foresight as a pioneering Seaport District believer, with a CBRE/NE-listed assemblage of 425,000 sf in four buildings bought by Invesco Real Estate Advisors kicking off 2015 with a bang. Invesco, the Texas firm with an inveterate—and profitable—yen for Boston CRE over the past decade spent another $91.7 million on 226 Causeway St. in North Station, that equating to a healthy $475 per sf for the 250,000-sf

“

We have moved from being mainly in the middle markets to the large deal space, and we are now comfortable working in both areas.

”

Frank F. Petz, JLL asset. The Griffin team was of course on that assignment, whereas 10-20 Channel Center was included in a portfolio of assets bought from Beacon by Chicago-based Callahan and Ivanhoe Cambridge, the investment arm of a Quebec-based pension fund.

Interestingly, Beacon had owned 10-20 Channel Center until Commonwealth Ventures paid $21.5 million in spring 2007 and leased it as office space, then sold it back to Beacon in 2013 at a consideration of $62 million.

Also in the Seaport, Rockpoint Group had an eclectic taste whetted in its $157 million purchase of the Renaissance Boston Waterfront

Hotel at 606 Congress St., that deal orchestrated by Eastdil Secured giving Rockpoint a 471room inn and 20,000 sf of meeting space next to the Boston Convention & Exhibition Center (see story hotel section). The acquisition was done in conjunction with hospitality sector specialists Highgate and Hotel Asset Value Enhancement as part of an ongoing partnership where those two groups will assume asset management duties at Renaissance Boston. Marriott International continues to fly the Renaissance flag at a property its new stewards have announced will undergo a capital renovation evaluation to deliver greater performance.

A homegrown firm that has sponsored a dozen commingled funds and other investment vehicles since being founded in 1994 by Keith Gelb and William Walton, Rockpoint doled out another $62 million on Tower Point, a warehouse converted to first class office space also in the Seaport, just doors down from Channel Center. Its seller was Davis Cos., who had paid Meritage Properties $43.3 million in autumn 2013 for the six-story, 155,000-sf building with the Griffin team negotiating that sale plus the 2015 swap, and even Meritage’s purchase way back in Oct. 2008 when Tower Point yielded a mere $32 million.

“Meritage did a great job bringing it up to the next level, and the Davis Cos. was able to complete their vision,” Griffin told Real Reporter after the most recent deal. Upgrades were made to mechanicals and common areas while a leasing campaign led by David Martel then of C&W brought Tower Point from 74 percent to full occupancy by the time Rockpoint arrived at the doorstep of 27-43 Wormwood St. Citizens Bank funded Rockpoint with a loan of $41.2 million. continued on page 101

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Eastdil and Rockpoint met yet again across Fort Point Channel at 99 Summer St. where Cornerstone Real Estate Advisers engaged the brokerage firm as exclusive agent for that red-roofed office tower totaling 270,000 sf. Rockpoint emerged winning bidder there via a $132 million offer for a building the seller had purchased in Aug. 2013 for $110.8 million, that following a 10-year hold by Normandy Real Estate Partners ($68.2 million in July 2003). The Eastdil team on the latest exchange there was comprised of Brian Barnett, Peter Joseph, Sarah Lagosh and James McCaffrey. RockPETER PALANDJIAN point in early March of this year took out a $68 million mortgage on 99 Summer St. with MetLife.

Beacon Capital Partners in April 2015 paid $125 million to Taurus Investments for 160 Federal St., a 24-story, 351,000-sf MICHAEL KEYES building now being put up for sale through Eastdil Secured at pricing rumored to be in the $210-million sphere, an assignment therealreporter.com unveiled last month which had industry estimates far below that target price, one that PATTY PYTLIK would certainly provide a solid return for Beacon Capital given its going-in basis which one observer does argue would be justifiable. “They have completely changed the image there,” that source says of 160 Federal St., even creating retail from an unused groundfloor space and bringing occupancy above 90 percent at rates in line with a rising market.

Although Eastdil has declined comment on the listing, sources maintain the exclusive is being led by Lagosh and McCaffrey.

For Commonwealth Ventures, the Channel Center deal was only half of the story in 2015 as the Connecticut firm separately traded its 50 Post Office Square tower in the Financial District to LaSalle Investment Mangement at a price of $285 million. Exclusive broker there? The Griffin team, delivering Commonwealth Ventures over $600 million in just two transactions.

In LaSalle’s Hub purchase, CV Ventures LLC was paired in the Financial District project with Bentall Kennedy on the property formerly known

FIFTY POST OFFICE SQUARE, BOSTON MA

as 185 Franklin St. Owned and occupied by Verizon, which signed a lease after CV Ventures/ Bentall tied the building up in 2008 at a price of $192 million, the big coup occurred when Brown Brothers Harriman filled 410,000 sf, that pact negotiated by Griffin’s colleagues on C&W’s downtown team and CBRE/NE being a 15-year commitment that brought some 2,100 financial sector employees to the building.

Griffin points to the $35-million modernization of a tired, dark office structure dating to 1947 into “cool core space” as key to garnering deep institutional interest in the listing, with new entrances added, the lobby rebuilt and 100 parking spaces incorporated into the building. Icing on the cake came in 2013 with the award-winning Brown Brothers lease brokered by the C&W crew of William Anderson, Gilbert Dailey, Debra Gould and David Martel (all now at Newmark) advising the tenant with CBRE/NE brokers Andrew Hoar, David Fitzgerald, Tim Lyne

and Ogden White agents for the landlord. Brown Brothers leases floors 12 to 18 into 2028.

Eastdil and the Griffin juggernaut are not the only brokerages to post multiple deals $100 million and above last year, as JLL moved into another gear during 2015, not only being among the top winners in the season’s talent grab among rival firms (see story, lead editorial page) but making its fourth year in operation under the lead of Frank F. Petz a transformational season when the contingent tendered at least eight deals over nine figures, the highlight being 131 Dartmouth St. in the Back Bay which TA Realty snagged for $315 million in a late December closing. The 371,000sf tower was harvested for the New England Teamsters & Trucking Industry Pension Fund.

JLL did a bit of double dipping across town at 745 Atlantic Ave., first bringing Oxford Property Group to the table when Beacon Capital opted to sell the 11-story, 175,000-sf mid-rise in continued on page 102

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the Leather District and engaged the brokerage shop which was also leasing agent there to find a taker, the buyer being the investment vehicle for an Ontario public employees fund that has taken Boston by storm over the past two years, first buying six office buildings from Blackstone Real Estate Partners in 2014 at a price tag of $2.1 billion and in 2015 inking the biggest single-asset trade in the Hub when the same seller through Eastdil put WILLIAM ANDERSON those on the block, that a $1.3 billion exchange (see story, lead editorial page).

Upon getting Oxford to take over 745 Atlantic Ave., the same JLL professionals were hired to carve out a 55 percent majority position by that owner, a group that GILBERT DAILEY tends to favor a minority stake. That came via an Israeli-based capital source that spent an estimated $95 million for that interest.

The JLL operation also closed on one of the biggest land sales in metropolitan Boston history, not DEBRA GOULD based on the land size of NorthPoint in East Cambridge (45 acres) but in terms of the $291 million DivcoWest put up to acquire the master-planned mixed-use site that is projected to house upwards of five million sf of laboratory, DAVID MARTEL office, residential and retail space in one of the country’s hottest communities from a development perspective.

“It is extremely rare” to see raw land receive such a consideration, Petz acknowledged to Real Reporter in an article first divulging the wellknown west coast firm led by Stuart Shiff had stepped to the fore and made one his firm’s biggest gambits on the Boston and Cambridge scene where it has achieved superior returns anticipating the impressive rebound seen this decade.

Shiff was on the other side of a JLL-listed nine-figure disposition, that one in Waltham yielding DivcoWest $102 million on multiple office buildings known collectively as Prospect Hill Executive Office Park that the firm had

745 ATLANTIC AVE., BOSTON MA

bought at the top of the market in 2007 for $100 million. While perhaps not quite the windfall DivcoWest is known for achieving in its Bay State endeavors, observers point out that many suburban assets were lost to their lenders in the 2008 recession or sold at a deep discount, with Petz crediting the client’s willingness to invest in the assets for making a difference.

“

A key selling aspect of this transaction was the quality of (100 Cambridge St.) that MassDevelopment created in its redevelopment.

”

Douglas Jacoby, Colliers Prospect Hill is a three-building, 480,000sf office park at 100, 200 and 300 Fifth Ave. featuring one six-story building and a pair of seven-story structures that date to the early 1980s. Anchor Line Partners reportedly intends to expand the park by 130,000 sf. The firm led

by Andrew J. Maher and Brian R. Chaisson has become known for its high-profile endeavors, in 2014 buying Cross Point in Lowell for $100 million and in mid-2015 picking up another Waltham asset, 200 Smith St., that a former US Postal Service facility totaling 327,000 sf acquired for $39.5 million.

The JLL brokers did not stop their nine-fig-

ure spree on Route 128, however, with the team uniting with its Connecticut operation to yield $113 million for CityPlace 1, a 38-story office tower in downtown Hartford bought by Paradigm Properties of Boston.

The JLL Capital Markets profile of 2015 “definitely” made substantial strides in its position, Petz says in discussing the super-sized exclusives of various ilk. “We have moved from being mainly in the middle markets to the large deal space, and we are now comfortable working in both areas,” he says, adding, “And there is more to come—we are going to have a very busy fall.”

The 131 Dartmouth St. assignment emerged as one of the Northeast’s top single-asset sales of 2015 and would have competed for biggest in New England save for the $1.3 billion Back Bay sale of two office towers to Oxford Properties and JPMorgan by Blackstone via Eastdil and was a hair below One Channel Center’s result. Constructed in 2003, the mid-rise has 318,600 sf of rentable office product and 52,425 of retail in an 11-story frame near the John Hancock Tower.

“People love the location,” Petz relays in noting close proximity to the MBTA Orange Line as well as Copley Place and the Prudential Center. There are also a range of tenant amenities in place, including a fitness center and 24/7 security. Another lure was the tenant base headlined

by Bain & Co. and its 115,000-sf headquarters.

The average lease term of 131 Dartmouth St. denizens is seven years and the lease rate averages $47.32 per sf versus an average of $61.21 per sf in just-released numbers from Encompass Real Estate Strategy. continued on page 103

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The 131 Dartmouth St. exclusive was run by Petz and Angelone plus Managing Director Jessica Hughes and Senior VP’s Robert Borden and Matthew Sherry.

HFF has already demonstrated its ability to handle super-sized exclusives, having done the largest single-asset trade of 2014 advising Cornerstone and the Fallon Co. on their $1.12 billion sale of the Vertex Pharmaceuticals headquarters at Fan Pier as well as several nine-figure results, and in 2015, the firm accomplished that feat three times, one a Seaport District portfolio sale and the others an Everett apartment building (see story, multifamily section) and the kingpin being $152 million in helping Broadway Real Estate Partners cash out at 116 Huntington Ave. in the Back Bay. Constructed in 1991, the ornate 15-story office building designed by CBT Architects totals 275,000 sf of efficient first-class office space with “unmatched views” of the Back Bay, Charles River, Seaport and South End, Senior Managing Director Coleman Benedict relayed in announcing that Jan. 2015 closing in which Columbia Property Trust made an all-cash purchase of a building that one observer called “hotly contested” by multiple bidders. “Columbia is going to do very well with this asset,” opined Benedict, joined by Director Benjamin Sayles and Analyst Patrick McAneny in negotiating the

100 CAMBRIDGE ST., BOSTON MA

agreement that is structured as a ground lease.

A publicly traded REIT, Columbia made 116 Huntington Ave. its first-ever purchase in the Hub, with one market watcher familiar with the firm maintaining “they’d like to do more” regionally. The operation based in New York City has 38 office properties and one hotel in its quiver, those holdings encompassing 55 buildings and 16.3

“

Columbia is going to do very well with this asset.

”

Coleman Benedict, HFF on 116 Huntington Ave., Boston MA

million sf in 15 US markets after shifting from a suburban focus in 2011 to concentrate on urban assets in leading gateway cities such as Atlanta, Dallas, San Francisco and Washington D.C. HFF procured the buyer on top of representing Broadway, with that firm also engaging Soundport Capital as an advisor on the deal. Broadway had held 116 Huntington Ave. since paying $77.3 million in Nov. 2004. The same three HFF professionals on that assignment also wrapped up in early 2015 DivcoWest’s three-building portfolio sale in the Seaport District in which Bentall Kennedy and Multi-Employer Properties Trust contin-

ued their surge on that market by landing office buildings at 300 A St. plus 313 and 330 Congress St. in Fort Point Channel, a package totaling 221,000 sf that yielded $105.6 million.

“MEPT and Bentall Kennedy have acquired irreplaceable assets in a (district) that is marked by massive tenant in-migration and strong barriers to entry,” Benedict said following that outcome involving one-time warehouses converted to high-quality creative spaces and open floor plans set against brick walls and timber columns bearing an essence of old-world Boston.

The other big Seaport portfolio sale of the 2015 season involving Crosspoint’s holdings harvested through CBRE/NE, a 428,000-sf package in four buildings that was guided by brokers ChristopherAngelone, WIlliam Moylan and Nathaniel Heald advising the seller and procuring the buyer. The $183.5 million deal in which Crosspoint retained a minority interest involves 11-15 and 49-51 Farnsworth St., 19-37 Stillings St. and 12-56 Thomson Pl. Since Invesco bought its majority stake in the portfolio and appointed Crosspoint as manager of the assets, the ownership has unveiled a capital improvements program and recently secured an Energy Star rating at 11 Farnsworth St. Yet another landmark sale in Boston last year was handled by Colliers International, the $280 million trade of 100 Cambridge St. at Government Center negotiated for MassDevelopment continued on page 104

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in the sale to Intercontinental Real Estate Corp.

The 22-story, 599,150-sf tower at the foot of Beacon Hill is a former state office building that fell into disrepair and sick-building syndrome in the 1990s before MassDevelopment undertook an ambitious repurposing that split the structure between several government agencies and a roster of private, third-party tenants who paid top-market rates for prime view space.

Colliers was retained ANDREW HOAR when MassDevelopment opted to monetize the asset in 2014, setting off a lengthy process that kicked into last year when a large berth of prospects including overseas capital pushed pricing to stratospheric levels. In the end, homegrown DAVID FITZGERALD Intercontinental Real Estate Corp. outdueled other prospects to win the day, with that Brighton-based firm increasing its local profile substantially in the acquisition. The firm reaffirmed its place in the investment pipeline by paying anothTIM LYNE er $310 million this spring for three Cambridge office buildings purchased from Beacon Capital.

On 100 Cambridge St., Intercontinental was represented in-house by Director of Acquisitions Michael Keyes and Associate DiOGDEN WHITE rector of Acquisitions Patty Pytlik. Peter Palandjian is Chairman and CEO of the second-generation family owned firm that dates to 1959 and is now in its 20th year as an SEC-registered investment advisor.

Colliers principals Scott Dragos and Douglas Jacoby oversaw the process that is considered that firm’s largest-ever capital markets sale, with others involved including Anthony Hayes, Michael McLaughlin, Timothy Mulhall and Assistant Lyndsey Ferreira.

Suitors were attracted by 100 Cambridge St.’s view space and location in an improving neighborhood, Jacoby said after the sale in which he also credits the firm’s downtown office and retail leasing teams for providing mar-

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ket guidance to bidders. Besides a validation of the location, Jacoby also credited the sponsorship, relaying that “a key selling aspect of this transaction was the quality of the property that MassDevelopment created in its redevelopment of this well-known property.”

Formerly known as the Leverett Saltonstall Building, the structure that came on line in 1965 was gut-renovated in 2004 as a LEED Silver certified building and also featured adding 34,550 sf of retail, a 75-unit residential condominium complex in a five-story building at the base of 100 Cambridge St. State agencies lease floors two- through 12, with that pact in place until 2052.

Among landords, the big winner of 2015 would have to be Commonwealth Ventures, with Galvin’s operation swinging for the fences on two complex redevelopment plays and coming out with dramatic outcomes that helped revitalize the then-struggling Financial District with a seeming relic of days gone by converted to a bustling first-class anchor across from Post Office Square Park. In the Seaport, CV was able to entice State Street Bank to consolidate multiple Boston offices into one massive headquarters that served as the anchor to revitalizing what for decades had been a dusty, underutilized section of the city now slated as the future home of General Electric Corp. u

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potential closures “are making investors are a little nervous,” but net-leased product serving banks, casual dining and even fast food restaurants are still trading and he adds there is also a weakening of the ‘Dollar Store’ market, “because there’s a flood of them in the marketplace and there’s an oversupply for the demand right now, so they haven’t fared well.”

Even with the apparent leveling off in pricing, Horvath and Tremblay still DENNIS KELLEHER posted their second most successful year in 2015, trailing only the record results achieved in 2014.

One of the team’s largest deals was the $18.7 million sale of a standalone Stop & Shop supermarket located at 932 North Montello St. JOHN PENTORE in Brockton, for which Horvath and Tremblay exclusively represented both the seller, Bierbrier Development, and the buyer, American Realty Capital Properties (ARCP). Stop & Shop signed the original 20-year double net lease in May of MICHAEL ALVAREZ 2002, which includes 10 five-year options, plus there are scheduled rental escalations every five years throughout the base term of the lease and option periods.

Horvath and Tremblay also negotiated a number of Walgreens pharmacy sales, including a store in Beverly that MAR Realty LLC purchased for $8.8 million from Westward Apple Orchards LP at a 5.46 percent cap rate. The store is tethered to a 25-year lease that commenced in 2012 and includes five-year extension options; Private investor Bernard Berkman purchased a newly constructed store in Taunton that closed at a price of $8.7 million from seller, Arista Winthrop Street, LLC, at a 5.34 percent cap rate, with the team representing both buyer and seller.

Walgreens signed a 20-year lease in August of 2013 that confidently includes (55) one year options; Carl II LLC, managed by Christopher Capozzolli of Wilmington, purchased a store from an affiliate managed by Newmark Grubb’s own Ted Chryssicas for $6 million while he was still under the Colliers International umbrella; and there were additional Walgreens sales as

DIGITAL FEDERAL CREDIT UNION, 15 GREENLEAF WAY, BURLINGTON MA

deals closed in Plaistow, NH ($6.8 million) and Coventry, CT ($6.3 million).

But 2015 was not all pharmacies and grocery stores. In one of the pair’s largest deals of 2015, Horvath and Tremblay brokered the $19.5 million sale of a hotel – Homewood Suites in Glastonbury, CT. There were also a number of bank branch trades, including the sale of a TD Bank branch in Quincy for $7.1 million and a

“

From a peak standpoint, I think we’ve already been there and we’re starting to feel a little more normalization and a correction on certain asset classes.

”

Robert Horvath, EVP Horvath & Tremblay

Digital Federal Credit Union in Burlington for $3.2 million. That all-cash transaction at 15 Greenleaf Way was made by investor Bernard G. Berkman who supposedly acquired the asset at a cap rate of just 5.3 percent in the purchase from Network Drive Lot 10 LLC, that entity managed by the Nordblom Co. Besides being netleased for 15 years in 2013 by a well-regarded credit tenant, Horvath says the modern construction of the 4,500-sf building and proximity to the Burlington Mall created “an intense” response among bidders battling for the prospect.

Restaurants, including Wendy’s, KFC/Taco

Bell, Friendlies, and Dunkin’ Donuts were other big sellers in 2015, as were discount stores such as Dollar General and Dollar Tree. And much as in its new platform headquarted at Lynnfield Marketplace is presently doing, partly aided by its own trading desk, the Horvath/Tremblay juggernaut handled 2015 deals from Maine to the southern US, including Florida and Texas. There are ultimate plans to open a Florida office, Horvath says, and the number of company brokers is also expected to increase. “We are non-stop busy right now,” he says.

Besides the bread-and-butter net lease action on retail and the like, Horvath & Tremblay also has an active multifamily practice led by Vice President Dennis Kelleher with Senior Associate John Pentore and Associate Michael Alvarez on the team juggling several current deals after a completing a number of others already advising sellers of assets which include a sizeable clientele in metropolitan Boston. One advantage of having that discipline in-house, according to Horvath, is that listings can create a feeder system of people cashing out on the multifamily realm who are looking for a passive investment, the very sort net-leased properties are promoted as by market professionals. In the case of the new Lynnfield group, Horvath says a sizeable percentage of buyers being advised on a given purchase have been introduced through the multifamily division delivering a client wanting to complete the back end of a 1031 exchange.

“That has worked very well so far,” Horvath says, adding, “it fulfills a real need,” with brokers saying they are often stymied trying to list a property due to that Catch 22—the owner’s question of where to deploy sales proceeds safely and limited in tax burden. u

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Butler and St. John have topped $1 billion in two of the past three years sandwiched around a “mere” $865 million in 2014 in a season where their nearest rival was still more than $500 million under their tally. As of this past month, following the $73.5 million sale of a Malden apartmetn complex, the team was at $850 million and seemingly on pace for another 10-figure result in turning their sights on $20 billion.

The veteran brokers are hardly doing that, Butler says, with the $10 billion threshold also off their radar screen as it quietly snuck up on them, the pair not even realizing the accomplishment was at hand until reassessing their results later in the year. “It was just a very busy year, and we were primarily focused on plugging away on our existing (business),” Butler explains, who still cannot peg exactly which transaction put them over PETER MERRIGAN the top. “I haven’t a clue,” he says, adding the chief satisfaction from the milestone would be its reflection on consistent results for CBRE/NE clients.

At this point into 2016, the figure has risen to $11.5 billion and running neck-and-neck with last year’s chart-topper. Once again, however, Butler says that is not the focus. “We’re just trying to get deals done,” he says.

As suggested in the pricier resutls, Class A apartments were a big part of the CBRE/NE activity in 2015, with the $50.2 million trade of 309 units in Portland, ME, the sole Class B deal of at least $50 million. Many are new construction, as in the cases of the three nine-figure results headlined in the 255-unit West Square Apartments deal in Boston’s Seaport District acquired by Swedish-based Akelius US for $152.5 million last autumn from a partnership of Lincoln Property Co. and UBS (see story, Hundred Million Dollar Sales, this issue).

The next biggest was also in the Seaport where Equity Residential doled out $130.2 million to pioneering residential developer Gerding Edlen of Seattle, for 315 on A, a 202-apartment tower that was among the first new residential plays in that emerging neighborhood, and CBRE/NE’s client was paid a healthy $644,926 per unit for exacting that vision. That proved to be the highest per-apartment number achieved in the 35 closings, with West Square Apartments second to that at $598,039 per unit.

Butler and St. John were hardly finished with

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CITY SQUARE APARTMENTS, WORCESTER MA (RENDERING)

Gerding Edlen in 2015: they were engaged by that firm to divest other holdings in California and Washington State, including a San Francisco building totaling 107 units that brought in $106 million from Stockbridge Capital—that sale producing an astounding $990,654 average per apartment. Both sides were brought together by CBRE/NE for another swap of $50.2 million—$162,621 per unit—in Redondo Beach, CA, involving 105 first-class apartments, and in Seattle, Butler and St. John deemed Cal Fox the winning bidder on a 118-unit sale that came in at an even $42.0 million.

Back on its home turf, CBRE/NE completed 26 multifamily sales in Massachusetts, with the remaining four involving Rhode Island assets, one of those a land site in Cumberland that can yield 200 units and traded at $2.5 million. The Class B 180-Shorewood Apartments in North Providence brought $18.8 million, while the other two in that state were both first-class list-

ings in which 234 South Kingston apartments at Harbor Village delivered $40.0 million to Invesco from Los Angeles-based JRK, an apartment buyer ramping up its New England footprint over the past three years. Separately, Geraghty Associates paid CBRE/NE client Fidelco/SBER $31.7 million for 251 apartments in West Warwick at Royal Mills.

Of the Massachusetts listings, 14 were firstclass product, four are Class B, one is of Class C caliber and CBRE/NE consummated seven land sales, activity Butler attributes to higher optimism and demand for housing regionally (see story on land sales this issue).

The Massachusetts action featured deals inside and outside Route 128, the former including a $73.5 million purchase in Brookline’s Coolidge Corner of 115 units at 1443 Beacon St. by Chestnut Hill Realty; another $70.6 million dealt on the Arlington 360 complex in that continued on page 107

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T H E A N N U A L R E V I E W 107 240 units acquired from FairBUTLER, ST. JOHN field Residential.

Also of note in 2015 was continued from page 106 the $47.7 million purchase of namesake community involving 204 units in Beverly last Sep164 apartments; and $63.0 tember by a partnership of million in Cambridge at The AxPhilMor Real Estate and Tauiom, that 115-unit project trade rus Investments from Home at 159 First St. amounting to Properties. The Townhomes at $547,826 per apartment paid Beverly is a value-add Class B

by REIT AIMCO to Urban Spaces venture which the buyers fiand the Michaels Organization. nanced with a $36 million loan Greystar shelled out $43.0 milfrom Santander Bank. Home lion on the 161-unit Jefferson Properties had paid $36.4 milat Admirals Hill in Chelsea to lion for the 12.5-acre complex a partnership of Berkshire and in Feb. 2007.

GE, while one of the land sites Townhomes at Beverly is a CBRE/NE processed was in property at 201 Broughton St. Cambridge at 88 Cambridgedating to 1972. Taurus princiPark Dr. where Hanover Co. paid pal Peter Merrigan said after a healthy $11.2 million to buy the purchase the JV would a four-acre parking lot that can make “significant capital improduce 254 apartments in the provements” to the commuemerging Alewife District close nity, while PhilMor’s Phillip to where the seller earlier this Bakulchuk said the infusion year harvested a new apartment would also incorporate “firstbuilding for a record $215 milclass amenities” such as a clublion, that sale handled via JLL. house and fitness center. Taurus The 88 CambridgePark Dr. and PhilMor, whose leadership parcel price equates to $44,291 includes self-storage expert per approved apartment. The Morgan Hanlon, had previousfigure on a Natick land site toly bought apartment projects taling one acre was even higher TEN FAXON, QUINCY MA together in Chelmsford and at $62,962 per unit ($3.4 milLowell. lion) paid by Stonegate Group CBRE/NE’s ability at hanfor 54 units. A relative bargain dling “No Job too Big” is cerof $12,857 per apartment ($4.5 tainly recognized, but the commillion) was spent in Worcester pany takes pride in its more on 350 approved units known modest endeavors as well, as City Square Apartments, in 2015 on a price basis the Mack Cali Realty Corp. the buysmallest being $1.42 million for er of 2.5 acres there from Leg100 Plank St. in Bedford where gat McCall Properties. The first VINCO Properties harvested a phase of the residential compofour-acre parcel able to pronent broke ground this summer duce 44 units to Greylock. For under Mack Cali affiliate Roseexisting product, Lahey Health land. It is called 145 Front @ sold investor Paul Herrick a City Square.

24-unit apartment building in An existing Worcester apartCITY SQUARE APARTMENTS, WORCESTER MA (RENDERING) Beverly at 80 Herrick St. for ment community known as Plantation Ridge yielded $66.7 million for TGM million when Greystar won a competition for $2.5 million—$106,250 per unit. A 55-unit Class C apartment building on Spring Street in Associates from Audubon Co., which got 330 200 downtown units in the city center.

Rounding out deals topping $50 million Boston’s Roxbury neighborhood fetched $9.4 first-class apartments in return, while another CBRE/NE suburban deal of note came when a were Alta Legacy Farms in Hopkinton ($59.5 million when Ivan Yee secured the asset from partnership of Bell Partners added Jefferson at million for 240 units) bought by Taymil Partners John Geraghty.

In central Massachustts,, 207 Class B units Salem Station to a growing multifamily port- and Praedium from Wood Partners; Bell Wheelfolio, paying Blackrock $77.2 million for 266 er Hill in Marlborough ($58.7 million for 274 at Park Village West in Westborough changed apartments. A Quincy luxury apartment building units) in a swap from Bell Partners to CBRE hands in a $13.4 million CBRE/NE listing on developed by Intercontinental Real Estate Corp. Global Investors; and TGM’s’s $50.3 million behalf of Boston Land Co. and its replacement, u of Brighton traded at a consideration of $65 spent on Addison at Andover Place in Lawrence, Stonegate Group. ®

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stint at Cushman & Wakefield as part of the Robert E. Griffin Jr. team. “We are very happy right where we are,” explains Butler, with the platform charging towards another championship after posting $675 million at the midway point of 2016.

Fortunately for those unattached to the Butler/St. John machine, there is plenty of activity in the searing New England multifamily market to go around, and skads of young talent whose production suggests that whenever the top of the ticket does move on—or even if they do not—the sector will continue to be a lucrative business line for multiple firms.

Indeed, one need look BRENDAN SHIELDS no further than to the Griffin team itself, which as everybody knows moved last September from C&W to Newmark, and among the 70 or so leasing, management and sales professionals making the switch was Michael Byrne, described by Griffin as “the third leg of the stool” when Butler and St. John ran the C&W shop and who now is leading the multifamily practice group at Newmark.

The namesake of a team that knows a thing or two about “Winning!” lauds Byrne for his experience and results, which feature many Tier One deals headlined by the priciest apartment building trade of 2015, O’Connor Capital Partners’ pioneering Atmark apartments in Cambridge’s Alewife district, with the newly constructed 428 units reaping $207.7

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million—a record at the time for its ilk—and some $485,000 per unit. Griffin notes it was no fluke, as the multifamily crew that includes Thomas Greeley and Casey Griffin delivered $132 million in selling 132 apartments at The Arlington in Boston’s Back Bay, equating to a record $1 million per unit, while across the river in Cambridge, The Wyeth apartments yielded $39 million when Byrne and friends attracted Zurich Alternative Asset Management to the opportunity providing that overseas fund manager 62 apartments at 120-124 Rindge Ave. and 45 Yerxa Rd. from client Broder Properties.

Along with the standard one- and two-bedroom layouts, The Wyeth also offers three- and even four-unit apartments, those averaging 1,714 sf versus 740 sf for the single-bedroom apartments. The $630,000 per unit was a record-setter for Cambridge, according to Newmark.

In yet another Cambridge sale of note, Alexandria Real Estate Equities harvested 270 Third St., an eight-story, 91-unit apartment building that is part of its Alexandria Center mixed-use complex. The $43 million sale price reflects $17.5 million buyer AIMCO will need to pay to complete the project which is squeezed onto a 17,450-sf parcel, with the deal actually closing six months prior to completion.

Griffin’s take on the performance? “Mike has done an excellent job selecting the team and getJASON S. WEISSMAN ting them ready to handle any assignment, including the largest that come along . . . and the results really speak for themselves,” he says, adding, “We have taken it to the next level, and they are a big reason why.”

The firm finished second regionally in dollar volume on multifamily sales during 2015, trailing only CBRE/NE. Yet another promising multifamily camp can be found at JLL where the Capital Markets team organized four years ago by Frank F. Petz and now co-led with Christopher Angelone has enjoyed steady expansion of that platform that actually eclipsed the Atmark record this spring divesting another Alewife newcomer, a 398unit building developed by the Hanover Co. that fetched $215 million. Senior VPs Michael Coyne and Travis D’Amato joined by Vice President Brendan Shields comprise the practice group that now has a North Station apartment building on the block also flirting with the $200 million sphere.

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tum and a ton of units in the pipeline.” Current listings including 285 Bellingham apartments expected to draw institutional funds and private capital groups, with Jefferson at Bellingham described as a value-add play some estimates have reaping upwards of $60 million for JLL’s client. JLL’s North Station entry is called The Victor Apartments, a high-rise constructed by Denver-based Simpson Housing featuring 286 units of luxury apartments whose swankiness can be measured in one-bedroom rents hitting $3,000 per month and two-bedrooms for $5,200. “It’s a fantastic property,” says D’Amato, who declined to discuss pricing targets for 110 Beverly St., a building that includes 17,000 sf of ground floor retail.

RICHARD ROBINSON Meanwhile. Teachers Insurance and Annuity Association took home $90.3 million in February via the sale of the Residences at Rivers Edge in Medford, a 222-unit complex on 3.6 acres near the Wellington MBTA Orange Line Station.

BRENDAN REILLY Exclusive agent there, JLL procured John Hancock Life Insurance Co. as the winning bidder, while in yet another early 2016 trade, the crew completed a Taunton sale of $7.8 million for 58 units at 120 Dean St. The client there was Equity Residential, the national REIT having bought that asset in a major portfolio sale several years prior. Already, JLL is at the $500-million mark following a 2015 where they accreted over $500 million for their clients via 14 closings.

Among the major 2015 conquests for JLL was Vinnin Square in Salem, a 148-unit apartment building listed for TGM Associates, the Empire State investor who reaped $36 million from the 11-acre property acquired in Sept.

2007 for $33.5 million. The buyer was Taymil Partners of Framingham, first unveiled as winning suitor in the Sept. 18th Real Reporter for a deal that closed three days later and was financed by $27 million provided by People’s United Bank. The five-year loan included two years of interest-only payments. Founded in 2002 by Steven Astrove, Taymil has amassed 2,000 units, with holdings in every New England state save Vermont.

Coyne and D’Amato also pitched in when JLL was hired to market a pair of downtown

20 ARCHER AND DONAHUE BUILDINGS, 20 DERNE ST. AND 41 TEMPLE ST., BOSTON MA

VINNIN SQUARE, SALEM MA

buildings for Suffolk University, joining Petz and Managing Director Jessica Hughes in a fast-moving process that reaped $43.5 million from JDMD Owner LLC, the same New Yorkbased group that acquired Suffolk’s Fenton Building the year before, another JLL exclusive.

The latest conquest involves 20 Derne St. and 41 Temple St., aka the Archer and Donahue buildings. All three will likely be converted to a residential use for the structures that total 174,750 sf located steps from the Massachusetts State House.

The buyers borrowed $31.3 million from AllianceBernstein LP that was arranged by the JLL debt and structured finance group run locally

by Heather Brown and Jonathan Schneider and also involving Managing Directors Aaron Appel and Dustin Stolly.

For Petz, all the activity amounts to something substantial. “We have made great progress in a short amount of time,” Petz says of the multifamily plank, adding of CBRE/NE, “We are going toe-to-toe with them on the biggest deals out there.”

HFF Boston has also stepped up its game on

the multifamily front in recent years, evidenced in prior sales of a 326-unit Saugus apartment community that brought $94 million for client AvalonBay Investments from JRK Property Holdings of Los Angeles in 2014 plus an astounding $87.5 million for two small land sites in the Back Bay, one built out as multifamily and another a mix of hotel and residential.

In early 2015, the HFF multifamily team processed a $50.1 million trade of 1440 Beacon St. in Brookline Village from a partnership of Nordblom Co. and Westbrook Partners that sold to an affiliate of Visconsi Cos., an entity said to have a family relationship with local development titan Steve Samuels., the 136-unit building situated a few trolley stops away from his towering Fenway CRE cluster. The brokers in that instance were Senior Managing Director Coleman Benedict and Directors Mark Campbell and Director Benjamin Sayles plus Real Estate Analyst Jackie Meagher.

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and being in the original LWP neighborhood, the bustling Coolidge Corner. HFF’s debt group helped on the deal by arranging $21.2 million in financing from New York Life Real Estate, with Managing Director Greg LaBine leading that task which provided a 15-year term. Rents advertised in excess of $2,700 monthly for a one-bedroom unit will help its new ownership pay down that note.

Samuels will provide asset and property management CHRISTOPHER SOWER services at 1440 Beacon St. Having retained Arbor Commercial Mortgage veteran Hal Reinauer in 2014, the HFF contingent in May 2015 further beefed up its multifamily capabilities by bringing Christopher Phaneuf over from rival JENNIFER PRICE Eastdil Secured, one of his roles being to work on the multifamily line with Campbell. Phaneuf was on board when HFF assisted Post Road Residential of Connecticut in its $145 million trade of The Batch Yard. That former home of BENJAMIN KARP a candy factory converted to 327 units of market-rate housing was acquired by Mesirow Financial of Chicago.

Interestingly, the Mesirow Financial Real Estate Value Fund II hooked up with HFF’s multifamily team MAGGIE COLLINS this April in buying Alta Stone Place in Melrose from a venture of CBRE Global Investors and Wood Partners. That 212unit apartment property located near the Oak Grove MBTA Orange Line station traded for $80 million. Occupancy was at 81 percent at the time of the four-building property’s sale. Located at 1000 Stone Place, the asset is being renamed Jack Flats.

“We have had some really nice successes,” concurs Phaneuf, who estimates HFF regionally processed 2,000 units for a total of $1.5 billion, that figure including financings, sales and arranging joint venture equity. Having its roots as a pioneer in the debt industry is “extremely valuable” in assisting clients, maintains Phaneuf,

THE ARLINGTON, BOSTON MA

whose prior firm is also well-established in that regard. Nationally, HFF was ranked the second largest multifamily broker by Real Estate Alert in 2015 with over 150 industry professionals experienced in virtually every product type from garden apartments, condominiums and high-rise assets to affordable, heatlh-related and student housing. “It’s all under one roof, which is what people are looking for today,” Phaneuf says.

“

Our growth has been skyrocketing.

”

Travis D’Amato Marcus & Millichap also boasts a lineup of seasoned talent in its New England multifamily ranks under the auspices of Institutional Property Advisors. There are actually two groups, one the market-leading Connecticut duo of Victor W. Nolletti and Steve B. Witten, and the other based in Boston where IPA two years ago acquired the regional operations of Apartment Realty Advisors whose members have a platform covering virtually everywhere else in New England. Team members include Jennifer Athas, Matthew Pierce, Brendan Reilly and Richard Robinson.

Their IPA operation in 2015 brokered $200

million covering some 2,500 units, Athas reports in a recent interview where she recounts the activity cut across nearly all situations from a number of impressive land sales all the way up to existing construction, the latter including a major apartment complex in Portsmouth, NH, that IPA had the exclusive on as agents for TGM Associates, the same national investor that retained JLL as broker for Vinnin Square.

IPA’s Granite State listing was of Beechstone, a sprawling 73-acre community off Route One near Water Country bought by Forest Properties for a healthy $51 million. There is 430,000 sf of rentable space in 71 buildings at 45 Beechstone, low-rise structures erected between in three phases from 1973 to 1986.

Forest Properties is an experienced owner and operator headquartered in Cambridge and run by founder Jeffrey A. Liebert. Attractions there besides being an established complex with a steady occupancy rate include solid demographics and an unemployment rate well below the national average. Athas, Robinson and Philip Lamere were on that assignment.

“It is quality real estate,” Athas conveys, a notion underscored in the former and current ownerships attracted to the asset. Acquired at 98 percent occupancy in summer 2007, Beechstone underwent a value-add program the following year implementing upgraded eat-in kitchens with black Whirlpool appliances, contemporary cabinets and modern lighting while continued on page 111

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also improving the extensive landscaped grounds. Based in New York City, TGM had quickly appeared on the New England scene in the mid-2000s as part of a national footprint covering 28 states now estimated at some 13,000 apartments, 240 in tony Andover where Addison at Andover yielded $50.3 million in its purchase from Fairfield Residential. That outcome was delivered by—big surprise—CBRE/NE, and they also aided TGM in its 2015 sale of Plantation Ridge in Worcester to Audobon Co., that community bringing RIVER’S EDGE, MEDFORD MA $65.7 million for 330 firstclass apartments (see story, multifamily section.) based there for decades before its owners last Bennett. Kudos were also extended to project architect HDS Architecture, project engineer Because of the hale economy and limited year moved to a new building in the same city.

Thibeault first began his gambit with a $1.1 Rick Salvo and regulatory expert Richard Nylen. inventory, Athas says New Hampshire has been “One of our strengths is we are able to do more successful attracting capital than other million purchase of 324 Vale St. in November tertiary markets such as Rhode Island, with the 2000 and picked up seven more totaling 1.4 so much of the redevelopment work—from site acquisition and finance to even demOcean State actually suffering a far different acres in July 2000 for $650,000. olition and remediation—in house,” jobs picture when the 2008 recession created Another $1.42 million was spent on Thibeault explains, enabling the firm double-digit unemployment, among the highest another five parcels assembled as to pursue “challenging sites that othin the US. Much of the fallout has subsided, she 300-312 Everett Ave., 61-65 Fifth St. ers will not touch.” says, and Rhode Island owners are “expecting and Locust Street in April 2005. “It IPA’s South Shore listing involved Massachusetts pricing” but not receiving it, one took an incredible amount of foresight 25 acres scaled down from anothstruggle being a localized sense of the turning and work to do what he did,” marvels er developer’s proposal (the earlier tide which has yet to reach the shores of outside Athas regarding the client. “It is not one met with opposition over size) capital. “They just aren’t there yet,” Athas out- easy or for the faint of heart to put EVAN GRIFFITH to 396 units, with AvalonBay paying lines while offering a few hard facts that might that together, but he did an amazing $13.2 million. “They are going like make yield-driven money consider crossing the job and he deserves a lot of credit . gangbusters on it,” Athas says resouthern border, including double-digit apart- . . It was great to see him rewarded garding the can-do buyer’s construcment rents quarter-over-quarter. “That is huge,” for what his vision and he has (accomplished).” tion program, their pace reflecting an she says.

Chelsea Lofts, the Fairfield Resieagerness to get units into the rental Besides stabilized product, IPA was also on stream. “People are extremely hungry the case trading a pair of coveted inner subur- dential venture, will have 692 apartfor land sites,” she says. “It is incredban land sites, one in Chelsea and the other in ments and 8,500 sf encompassing ible how popular they are, especially Quincy where new construction is already un- two city blocks within a quick walk to JOHN SLYMAN inside Route 128.” derway by mega-developers Fairfield Residential a new Silver Line station accessible to Fortunately for IPA clients, one of in the former instance and AvalonBay the latter, downtown Boston. Noting in a press the quartet comprising the current with those sites together amounting to nearly release his firm has reclaimed some 40 Boston team—Reilly—is an expert $64 million in total value. The lion’s share went acres total between Chelsea and Evin the land department, an arena to a savvy local businessman, William Thibeault, erett over the years, Thibeault praises that can go cold overnight as it did who saw gold in several underutilized—at times the IPA brokerage for accreting maxiafter the 2008 recession. Nowadays, contaminated— industrial buildings off Route mum value from the site and Fairfield however, the reaction to Boston’s One where the Tobin Bridge begins, and over the Residential for seeing the agreement booming, diversified economy is rising course of a peripatetic economic decade quietly through, offering other recognition to MATTHEW PERRY cobbled 8.2 acres worth, creating a formidable Fairfield representatives Kevin Maley and Greg demand for multifamily, opening the door for parcel before landing the linchpin which provid- Pinkalla as well as Team Thibeault consisting prospectors willing to shovel their way into the ed street frontage, that being longtime home of real estate director Della Thibeault, attorney mix. “Brendan has so many contacts for land, it of Chelsea clock, the enduring timepiece maker Anthony Rossi and in-house counsel Richard continued on page 112

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is incredible,” says Athas, calling her colleague’s 2015 performance “outstanding” and predicting the fundamentals will keep pricing strong, especially as the larger infill sites are taken off the inventory.

In addition to the IPA teams, Marcus & Millichap has a stable of other brokers who handle multifamily regionally, and those professionals handled several deals of note statewide in 2015, including a 39-unit portfolio in Lynn that sold last August to Chase Apartments LLC from client Chase Property CARL CHRISTIE Development LLC and that entity’s manager, Bonnie Strasnick. Units at 8-12, 14-25 and 39 Chase St. traded for $2.18 million versus the $2.13 million they fetched in March 2005. All four buildings were fully occupied at the DANILE MCGEE time of the sale, relays Senior Investment Specialist Evan D. Griffith, who advised the seller, with Chase Apartments LLCs self-represented. Its manager is Andreas A. Tsitos, a local investor who borrowed $1.7 million from Beverly Bank to fund the deal.

“As cap rates compress in the core areas, buyers are casting a wider net into different submarkets so they can achieve a higher return,” Griffith observed after the exchange, adding conditions are such in Lynn that “the buyer will be able to increase returns immediately by pushing the rents to conservative market rates.”

Griffith closed out the third quarter last year with a $3.7 million Newton assignment, in that case joining forces with Matthew Perry of Town Property Group in representing the seller of 14 Cottage Court to Allston-based Micozzi Man-

2073 RIVERDALE ST., WEST SPRINGFIELD MA

270 THIRD ST., CAMBRIDGE MA

agement, its managers Giancarlo and Marcello Micozzi active investors throught metropolitan Boston who turned to Greysone Servicing Corp. to fund their purchase with a $2.03 million mortgage. Griffith and Perry also procured the buyers.

Sorella Court LLC is managed by Rhonda C. Stisi and Rita M. Velex. Their family had owned the building located on 15,000 sf since paying $43,000 nearly four decades ago in Oct. 1976.

They were credited by the brokers for upkeep of the building that dates to 1976 and offers a mix of one- and two-bedroom units plus covered parking. “Not often does a building of this quality and size become available in Newton,” Griffith recounted later, with the listing creating “a feeding frenzy” among suitors. “The location combined with the long-term potential made this property extremely appealing to local apartment building operators,” adds Griffith, while Perry reported that “the buyer was very pleased to add this generational asset” to their growing portfolio.

In yet another late summer closing, Marcus & Millichap broker John Slyman was agent for the seller of Bob’s Court in West Springfield

where 69 units brought $4.1 million. The building at 2073 Riverdale St. is a brick structure dating to 1972 which is made up of one-bedroom, one-bath apartments, plus features onsite laundry, maintenance area and rental office on the 1.7-acre parcel.

Bob’s Court was also fully leased at the time of its purchase by Anthony Cardaropoli, manager of the Riverdale Street Realty Trust who received $3.2 million in financing from TD Bank.

Bob’s Court traded at a capitalization rate of 7.4 percent, and Slyman says value-add there can be had in raising rents and also separating the electricity metering, with the landlord currently paying that utility.

Marcus & Millichap was advising Chidiac LLC, whose manager is Sylvia Chehade. Her family had held the property since paying $1.7 mllion in Feb. 1990.

At NAI/Hunneman Commercial Co., the team of Carl Christie and Daniel McGee had an impressive 19 multifamily sales consummated in 2015, among the more notable ones being Seven Captain Parker Arms in Lexington, an 11-building asset that traded for $31.6 million in September, plus 119 College Ave. in Somerville bought by an affiliate of Dr. Gerald Chan for $13.3 million in August, that property near Tufts University sporting 41 units. A mixed-use Brookline building with apartments fetched $4.72 million in August and a similar asset in Cambridge’s Central Square went for $8.7 million, the late-season closing involving 23 apartments at 137 Columbia St. and 220 Prospect St. Joining Christie and McGee on the NAI/ Hunneman assignments were Assistant VP Gina Barroso and principal Robert Tito Sr. on the Brookline, Lexington and Somerville listcontinued on page 113

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ings. Principal David N. Ross took part in the Lexington exclusive. In other major 2015 outcomes, 109 units in four Lynn properties sold for an even $11 million, while Christie and McGee were in on the Akelius sweepstakes, helping that Swedish investor purchase 32 first class apartments in Brighton near Boston College for $13.6 million—$427,281 per unit—as the buyer went on an introductory spending spree of metro Boston apartments this past summer, landing four separate assets, one of them 31 and 35 South St. NAI/Hunneman’s client in that regard was J&W South Street LLC of Winchester, which had paid $7.8 million in March 2011 for the low-rise buildings ROBERT TITO SR. that had been upgraded by its prior ownership, Mount Vernon Co. J&W is based at the headquarters of commercial construction giant John Moriarty Associates.

Other beneficiaries of the Akelius action were CBRE/NE, which brokered GINA BARROSO a $152.5 million sale of West Square at 320 D St. in South Boston, that firstclass complex with 252 units developed by Lincoln Property Co. on the site of an old industrial building, the same back story nearby at 339 Main St. which the HENRY LIEBER investor spent $16.4 million on two dozen units that came on line in 2014, that sale handled by JLL. Boston Realty Advisors negotiated the fourth commitment, 461 Massachusetts Ave., a 17-room lodging house which sold for 6.3 million, its team consisting of BRA principal Jason S. Weissman and the firm’s multifamily practice group.

The Lynn portfolio at 40-60 Lewis St. and 11-17 Beach Rd. equates to over $101,000 per unit, a healthy outcome for that North Shore city, according to Christie, whose firm is active in that region as well as Boston and other surrounding suburbs. Although the inner suburbs are still coveted by multifamily investors, capital is beginning to explore alternatives in search of yield, he says.

“It was a good year just about everywhere,” he says. “We sold a ton of buildings.” The Captain Parker Arms endeavor was an all-out effort by the

RICHMOND VISTA APARTMENTS, 105-109 HOPKINS ST., WAKEFIELD MA

firm, with others pitching in being Henry Lieber and Senior VP Lawrence Goldstein plus Gina Barroso. They were certainly needed in conducting some 40 tours and juggling over two dozen finalists before the Hamilton Co. swooped in “with better pricing and better terms,” Ross recounted to Real Reporter after the sale was completed last autumn. “The property showed itself really well, and our group was able to (identify) further value and help people recognize the upside in this opportunity,” Goldstein said in that article regard-

“

People are extremely hungry for land sites.

”

Jennifer Athas ing an 11-building community Avalon bought for a mere $10 million in June 2011.

Hamilton Co. President Carl A. Valeri explained to Real Reporter that his firm these days is more intent on development versus acquisitions, but “could not refuse” the opportunity to buy a second asset in upscale Lexington, one he says Avalon “did a great job taking from a B-minus property to B-plus” and setting up his hands-on company to improve cash flow even further. The property at 125 Worthen Rd. is close to 32-42 Worthen Rd., aka the Battle Green Apartments bought by Hamiltion Co. in June 2011 for a mere $10 million.

Overall, Christie and McGee were involved in the sale of 557 apartments and related property for a total consideration of $114.9 million

during 2015, with the Capital Markets team overall processing $324 million in financings and sales for the year.

Boston Realty Advisors continues to make great strides with its multifamily platform, and that is reflected in over $243 million of transaction volume in 2015 covering 762 residential units, and founder Jason Weissman says multifamily is again a major element in his firm’s 2016 lineup that has $80 million of deals under agreement and another $100 million in the pipeline. “The firm is stronger than ever,” he tells Real Reporter, and just proved that this past week in the $6.2 million closing of 73 Moutn Vernon St., a nine-unit Beacon Hill apartment building and latest exclusive for the locally based company. “That was a terrific outcome,” says Weissman. “We are very happy for our client.” It was also another example of the firm’s willingness to co-broker a deal, with the buyer sourced by a residential professional.

In 2015, BRA wrapped up a $147 million disposition of three Allston apartment buildings on behalf of Mount Vernon Cos. at its renowned Green District apartments, and was involved in a suburban trade where BRA joined forces with JLL to market a newly constructed 114-unit Wakefield apartment community developed by the Richmond Co. of Wilmington. The buyer there was familiar face True North Capital Partners whose $24.8 million purchase was out of the norm for a company usually focused on value-add opportunities versus institutional quality product.

Besides Weissman, the BRA team on that deal included Christopher Sower, Jennifer Price and Benjamin Karp with Coyne, D’Amato and Shields on the JLL side. continued on page 108

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14 COTTAGE CT., NEWTON MA

before completing a hands-on upgrade which led to the Akelius interest.

Another Brighton site at 1322 Commonwealth Ave. promoted as a prime candidate for multifamily by BRA yielded $2.9 million last summer. The seller was Gulf Oil and buyer Diamond Sincori LLC, its purchase producing a 19,850-sf hilltop parcel between Chestnut Hill Avenue and Mount Hood Road on the Brookline border. “The site’s location is ideal, being directly on public transportation and equidistant be-

tween Boston College and Boston University,” Weissman outlined after that closing.

Speaking of Boston University, that was BRA’s client in a Kenmore Square listing of 601 Newbury St., a free-standing 22,675-sf office building also seen as a possible apartment or condominium conversion. The $8.25 million was shelled out by another familiar face, the aforementioned WIlliam Thibeault, whose platform in recent years has expanded into Boston. u

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The BRA brokers were also involved in a Weymouth multifamily sale this past summer when 44 units at the Derby Arms Apartments yielded $5.9 million, or almost $35,000 per unit in an exchange by seller Riverside Properties and the new owners, Newport Realty. Featuring 20 one-bedroom and 24 two-bedroom apartments, Derby Arms Apartments received substantial interest and multiple offers, according to the brokers who cite attractions as being the transit-oriented nature of the asset and opportunity to add value upgrading the Class B property at 30 Derby St. right off Route18.

Weissman, Sower, Price and Collins took on an even bigger chore that kicked into the opening week of 2016 when Akelius paid $63.1 million for 190 units in four inner suburban buildings, two in Brighton and two in Somerville. The client was True North Capital Partners, a savvy Concord-based group active in the multifamily arena this decade with a focus on value-add opportunities. That was the situation when True North principals Jeffrey Bruce and Mat Glauninger plunked down $38.3 million for 89 units at 4-8-12 Elko St. in Brighton Center and 101 units at 123 and 136-138 Highland Ave. in Somerville between Oct. 2013 and May 2014

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al-properties market. This past November, Amazon purchased 77 acres in the SouthCoast Life Science & Technology Park for $3.7 million from the Fall River Redevelopment Authority, where it is constructing a $36-million, 1.1-million-sf distribution facility. The highly touted project is expected to create 500 full-time jobs. NAI Hunneman represented the Fall River Redevelopment Authority while Commercial Real Estate Solutions advised Amazon.

But that wasn’t the only move regionally in 2015 by the huge online retailer, as Amazon also signed a lease for 96,000 sf in Everett and is still in the market for roughly 250,000 sf of additional space, according to industry sources.

Not that all of 2015’s deals were driven by e-commerce companies, STEVE WOODWORTH however. Last April, Martignetti Cos., the giant liquors distributor, spent $11.5 million to purchase 115 acres in the Myles Standish Industrial Park in Taunton where the firm is constructing a $100-million, state-of-the art, 680,000-sf headquarters and distribution facility. The site will eventually employ 800 workers and have the flexibility to expand by an additional 1.3 million sf.

Sellers Taunton Development/MassDevelopment Corp., were represented by NAI Hunneman, while CBRE/NE advised the buyer.

The demand for industrial properties by e-commerce firms, like Amazon, and more old-style companies like Martignetti, have combined to create a robust, dynamic market for industrial properties in general in eastern Massachusetts, market observers detail.

Last year, the region experienced a “significant tightening” within the property class, with the vacancy rate for all industrial properties falling to 12.8 percent, well below the pre-recession levels of 17 to 19 percent in the Greater Boston area, which has 182.1 million sf of inventory, according to JLL research. Indeed, industrial properties held their own during the recession, hovering in the 17-percent vacancy rate range in 2008 and 2009, before starting to decline in 2010 and 2011.

Asking rents for distribution centers and warehouses have responded in kind, hitting an average of $6.21 per sf in 2015, up 8.3 percent from the year prior. Asking prices are still a little below the pre-recession peak of $6.27 per sf average in 2008, but many industry officials say they expect rent prices to exceed that level in 2016.

ONE FIRST AVE., PEABODY MA

In response to the tight market, there is now 1.7 million sf of new construction under way in communities such as Bellingham, Norton and Taunton, although JLL reports 75 percent of that new space has already been pre-leased. As as result, new construction is not expected to provide nearly enough supply to meet growing demand – and so many industry officials expect the current strong fundamentals to remain roughly the same in 2016, barring a nationwide economic downturn.

“

There’s pretty fierce competition for properties out there.

”

Jeffrey Theobald, principal Novaya Real Estate Ventures

NAI Hunneman Executive VP Cathy Minnerly, who with colleague Ovar Osvold specializes in the South Shore industrial market, notes how attractive properties have become for large investors and buyers this decade. Of the 30 regional sales of 80,000 sf and up last year, 27 of them involved major players, says Minnerly, who advised TDC on the Martignetti sale along with Osvold.

“To me, it says there’s a lot of money out there,” Minnerly says of the ramped-up activity.

“It’s amazing how much money was transferred last year. It was a sort of frenzy. And there’s still more deals out there to be had.”

As example of the strong investment-sales market, Minnerly listed the following deals from last year:

• 338,000 sf at 675 Canton St. in Norwood went for $27.5 million. The property was purchased by JCC 675 Canton St. LLC and the seller was Prologis. JCC is an affiliate of the James Campbell Co. • 433,000 sf at 100 Meadow Rd. in Boston sold for $23.4 million. The buyer was 100 BBP LLC and the seller was LSREF 2 Clover Prop 13.

• 238,900 sf at 275 John Hancock Rd. in Taunton sold for $20 million. The buyer was Abu Dhabi Investment Authority/PSP Investments and the seller was Exeter Property Group.

Minnerly also reviewed some of last year’s user sales, a large conduit of transactions: • 328,104 sf at 300 Constitution Dr. in Taunton was sold for $20.3 million. The buyer was the Boston Globe and the seller was Chambers Street Properties.

• 200,000 sf at 100 Meadow Rd. in Boston went for $9.25 million. The buyer MS Walker while the seller was Hudson Advisors • 166,400 sf at 47 Maple St. in Mansfield was sold for $3 million. The buyer was Future Foam and the seller was Stone Brown Papers Inc. In particular, the 275 John Hancock Rd. deal last year is instructive about how much has changed over the years, observes Minnerly.

Built early last decade, the property in the Myles Standish Industrial Park was sold in 2004 for $64.50 per sf and then traded again in 2007 for $67 per sf. Five years later, it sold for $70 per sf and then last year it fetched $83.70 per sf. That comes to a 30 percent increase in value since it was built, Minnerly calculates.

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to between $70- $75 per sf in 2015.

Colliers International Senior VP Douglas Jacoby, an active broker in the industrial realm, says rising rents and prices for industrial properties have created “fierce competition” among buyers. The industry veteran notes last year’s sale of a five-property portfolio by Colony Realty Partners to Albany Road Real Estate for $27.4 million orchestrated by the Colliers team that included principal Scott Dragos, Anthony Hayes and Timothy Mulhall. Dominated by warehouse space with a mix of flex and manufacturing space, the 400,000 sf is JAMES ALDEN located in Auburn, Billerica, Hopkinton and Tewksbury.

Even though the buildings ranged from 25 to 40 years old and scattered about the suburbs, Jacoby reports a strong response almost from the outset.

“We had a large number of PETER CARBONE III (potential) buyers for that package—and there were a number of frustrated buyers who didn’t get it,” he says.

Colony Realty also came through on its $27.5 million purchase of 675 Canton St. in Norwood as detailed above. The 338,000-sf facilSCOTT R. TULLY ity was sold by Prologis in a deal where Colony was advising the buyer, an affiliate of the James Campbell Co. investment fund. The facility itself was 40 years old, but is just off Route 128, a much desirable location these days for industrial JEFFREY THEOBALD properties, Jacoby reports.

A pair of veteran real estate professionals who teamed up last year to form Fulcrum Real Estate Advisors also won a deal in the inner suburbs where Savills-Studley broker Steve Woodworth was advising the sellers of 60 Stergis Way in Dedham where Routes One and 128 converge. The longtime owners who also ran a landscaping company there cashed out via a lease to John Deere Co., improving its value enough to offer the 20,000-sf industrial building to an eager acquisitions community. Putprush later explained the appeal was multifold, including hav-

675 CANTON ST., NORWOOD MA

60 STERGIS WAY, DEDHAM MA

ing coveted outside storage and a credit tenant, but also for future development potential thanks to being in a new zoning district that could allow higher-and-better uses, most notably retail.

The $2.2-million Stergis Way agreement was first detailed by Real Reporter in August.

Another 2015 deal involving Prologis was its disposition of two properties totaling 250,000 sf at 12 and 100 Campanelli Parkway in Stoughton for $10.6 million to Stat Industrial, a real estate investment trust. “That was another hotly contested sale,” says Jacoby. Prologis has been steadily paring down its Massachusetts holdings over the past two years, in 2014 hiring Eastdil Secured to divest 19 properties totaling 1.7 million sf in one fell swoop, that trading at a consideration of $113 million. The series of sales reflects a strategy by Prologis to eschew the regional market.

In Wilmington, Novaya Real Estate Ventures bought 326 Ballardvale St., a 293,000-sf package of three buildings, from RREEF America REIT III for $24.5 million. That came out to about $83 per sf.

The buildings were fully leased to solid tenants that include C&S Wholesalers and National Grid.

“A slew of people wanted that deal,” says Jacoby, noting the Ballardvale properties were once again located on prime land near Route 128. The low supply of warehouse space, in par-

ticular, is forcing many buyers to rethink what type of properties they can realistically get now in the Greater Boston market. They may want “pure warehouse,” but they may have to settle for flex properties if they want to expand their industrial holdings in the region, says Jacoby.

As for Novaya, it was also busy last year on many fronts, including industrial, buying 57 Littlefield St. in Avon for $14.4 million. The 407,000-sf warehouse was sold by Lincoln Property Co., which was represented by Transwestern/RBJ. Last year, Novaya was also involved in the purchase of Peabody’s One First Ave. in Centennial Park. The 130,000-sf, Class-B warehouse was sold by Paradigm Properties for $8.1 million. At the time of the sale, the property’s tenants included Analogic Devices, S.G Torrice and Schwartz & Benjiman.

“Pricing has definitely gotten more competitive,” says Jeffrey Theobald, a principal at Novaya. “There’s pretty fierce competition for properties out there.” JLL’s Petz says there has been a number of other notable industrial transactions in the region – many of them involving some aspect of e-commerce trade and most of them being as near as possible to urban centers.

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INDUSTRIAL  DEALS  Industrial Volume Industrial Sold MetroVolume Boston Sold Metro Boston

2014 -'15 $215,422,793.08

14Q1 14Q1 $215,422,793.08 14Q2 $217,517,850.53 14Q2 $217,517,850.53 14Q3 $257,446,125.00 14Q3 $257,446,125.00 14Q4 $393,497,033.50 14Q4 $393,497,033.50 15Q1 $242,534,859.70 Industrial 15Q1 Volume $242,534,859.70 15Q2 $249,289,176.32 Sold Metro Boston 15Q2 $249,289,176.32 15Q3 $466,358,745.80 14Q1 $215,422,793.08 15Q3 $466,358,745.80 15Q4 $792,539,105.90 14Q2 $217,517,850.53 15Q4 $792,539,105.90 14Q3 $257,446,125.00 TOTAL VOLUME 2015 $1,750,721,887.72 14Q4 $393,497,033.50 TOTAL VOLUME 2015 $1,750,721,887.72 15Q1 $242,534,859.70

GEOGRAPHIC DISTRIBUTION

As a surprise to $249,289,176.32 nobody, Boston saw the region’s largest amount of investments 15Q3 $466,358,745.80 in 2015, attracting $5.5 billion of 15Q4 capital; this was$792,539,105.90 followed, of course, by Cambridge with $1.3 billion, Waltham TOTAL VOLUME 2015 million $1,750,721,887.72 with $433 and Burlington, with $157 million.

15Q2

57 LITTLEFIELD ST., AVON MA

deal which rocked the suburban MetroWest seen due to the size of that commitment.

Last year, National Development acquired 443,000 sf of space at 100 Meadow Rd. in Boston for $23.4 million, in yet another sign of investors snapping up properties in or near urban centers, Petz says. Yet there were also plenty of industrial deals further west in Massachusetts.

Last November, Victory Packaging moved into its new build-to-suit warehouse at 355 Maple St. in Bellingham, developed by Seefried Industrial Properties, and then exercised an option to purchase that was assigned to the buying entity LIT Industrial. The property’s price tag: $26 million, or $104 per sf, believed by some at the

time to be the highest price ever paid for a conventional warehouse in the I-495 market.

In Springfield, Ameristar Casino LLC sold 656 Page Blvd. to China Railway Rolling Stock Corp., which plans to build a new 201,000-sf manufacturing facility on the 40-acre site. The railway company, represented by NAI Hunneman, will construct and assemble new Orange and Red Line subway cars at the site for the MBTA. Most industry-property experts believe 2016 will see a continuation of the strong fundamentals on display in 2015. “We’ll have continued high demand for both Class A and Class B properties,” says Petz. “The ‘urban industrial’ trend isn’t going away. The economics are quite strong.” u

2015 Volume

by Quarter

Data sources: Real Capital Analytics, Encopmass Real Estate Strategy

early this year, Boston Scientific, the huge Marlborough medical device company, sold one of its long-held warehouses at 500 Commander Shea Blvd. in Quincy to FedEx Corp. for $31 million. The 470,000-sf facility will be used as a FedEx distribution center. Again, it’s a deal that’s indirectly tied to e-commerce, since FedEx delivers so many packages sold by online companies. “It just shows you what’s happening out there,” says Petz.

Along the same lines, Griffith Properties last year bought 480 Sprague St., a DEBORAH TAMULIS 233,000-sf facility in Dedham, bordering Boston’s Readville area, for $15.4 million. The seller was Oak Tree Capital Management with operating partners Calare Management and Hackman Capital.

The property’s main tenants include Amazon, Macy’s and Restoration Hardware, Petz noted. In Littleton, Potpourri Group, the Billerica-based web and catalog merchandiser, last year signed a lease for 450,000 sf of space at 3 Distribution Center Circle in Littleton. The tenant, MA Littleton Land LLC, was represented by JLL, while landlord Condyne Cos. engaged Thompson Real Estate and its broker Deborah Tamulis, on that

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spring, while the firm led by David Ridini and Matthew Snyder is now the pending buyer of the Boston Globe headquarters in Dorchester.

“People were punching each other in the face to get to the front of the line,” Jacoby recounts of the One Bunker Hill Business Center competition that saw plenty of other suitors in the same price range. “It was a hard-fought battle because people understood how really unique this opportunity was,” Jacoby says. By comparison, the average price for the entire roster of flex/industrial deals consummated by Colliers International this past year was $64.20 per sf.

Colliers marketed the asset on behalf of Cambridge Hanover Inc., a Connecticut firm which had paid a mere $5.6 million in Sept. 2008 and set about KEVIN PHELAN renovating 440 Rutherford Ave. at the right time, just before e-commerce arrived on the scene and made a dwindling inventory of urban industrial even more coveted (see story, main industrial page). Encompass Real Estate Strategy says in DOUG JACOBY its latest market report that just 9.1 million sf of the 141.8 million sf it tracks are in the so-called streetcar submarkets of Boston and surrounding communities. Encompass puts the average rental rate for warehouse at $6.12 per sf, whereas One Boston Business Center rents run from $15.74 to $18.75 per sf and one renewal option starts at $19.75 per sf. when it kicks in in 2020.

A strong history of being fully leased and already renovated once this decade with a $4 million infusion, One Bunker Hill Business Center had plenty of reasons to generate such a reaction, according to Jacoby, but he says the rapidly transforming Charlestown district could give the new ownership hopes for a so-called “higher-and-better use” down the road, especially with Rutherford Avenue connecting directly to the nearby Everett parcel where Winn Casinos is constructing its new high-rise gambling emporium. Colliers in marketing the asset pointed out the structure built in 1958 is within a mile of the 45-acre master-planned NorthPoint redvelopment being undertaken by DivcoWest; the 1.2-million-sf Hood Business Park; and Assembly Square, a $1.6-billion residential and retail development that came on line in 2014 one

BUNKER HILL BUSINESS CENTER, BOSTON MA

stop up on the MBTA Orange Line.

For all the futuristic possibilities, however, Jacoby says the fevered clamor for urban industrial may have been the major catalyst for the impressive results at One Boston Business Center, mainly because the inventory of such product has been in decline for decades. A safety valve of suburban options has also been compromised due to the 2008 recession that curtailed virtually all new construction, while the e-commerce component has further exacerbated that dearth.

Center Court acquired 440 Rutherford Ave. under its affiliate, TD Street LLC, which borrowed $10.5 million in fixed-rate financing through LStar Capital Finance, the credit arm of Lone Star Funds. That loan was arranged by the Colliers Debt & Structured Finance team of Kevin Phelan and Jeff Black.

JLL experienced a similar surge of interest when 500 Commander Shea Blvd. in Quincy was put up for sale in 2015 by Boston Scientific Corp., which since 1999 had owned one million sf of industrial on Squantum Point. A Utah investor, Scannell Properties, won the day on that listing when it paid $31 million this January for a complicated arrangement where Boston Scientifid leased back 600,000 sf in the South Building and FedEx inked a third-party lease to take 400,000 sf at the North Building, with a proposal by Scannell to reposition the structure prior to the ground distribution operation opening.

“The closer to the population you are serving tpday, the better,” JLL Managing Director Frank F. Petz says of the impetus for logistics firms and

the users of the world such as Amazon.com to find venues near metropolitan centers. The JLL Capital Markets effort was led by Petz with Managing Director Jessica C. Hughes and Vice President Robert Borden. Senior VP Jonathan Schneider provided debt financing guidance while Managing Director William Bailey served as industrial market expert.

Although also JLL promoted 500 Commander Shea Blvd. for its future MICHAEL FRISOLI development potential, it appears the current use will remain intact for some time, with Boston Scientific leasing its piece for 10 years and FedEx hunkering down for an extended stay. Meanwhile, industrial fundamentals remain solPETER WHORISKEY id, with JLL reporting 2.7 million sf of positive net absorption in the 12 months prior to the Quincy asset’s listing. “The market has greatly exceeded expectations,” JLL observes while adding that most new construction has been of the build-to-suit variety and not speculative opportunities that could ease demand pressures.

Suburban flex and industrial sales may not have commanded similar pricing, but transactions remained brisk again after a solid 2014 from start to finish, including the late Decemcontinued on page 119

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ber $6.3 million purchase of 159 Rangeway Rd. in Billerica to Lynnway Rangeway LLC and its managers, James Lamb and George Russo, who financed the deal with $3.1 million from TD Bank. The 88,000-sf industrial building was listed on behalf of the Hampshire Cos. by Stubblebine Co., which separately last October brokered the $6.75 million dispersement of 64,775 sf at One Fortune Dr. in Billerica, that R&D facility bought by One Fortune LLC, whose manager Steve Goodman and his GFI Partners is an active investor in the regional flex/industrial arena; Spencer Savings Bank loaned that group $5.21 million on the building purchased from Pyramid Construction Group.

In the 159 Rangeway Rd. sale, the buyer was its tenant, an affiliate of Lynnway Auto Exchange. “Our ability to align tenants with superior locations that help their businesses to prosper drives our success and helps us to succeed in delivering a great value and a desirable result for our investors and the buyer,” Hampshire Cos. DIrector of Dispositions Igor Derbaremdiker said after that deal was completed.

One month later, Stubblebine closed on 20 Commercial Dr. in Dracut to 303 Broadway Nominee TR from LB Investment Group. Built in 1988, the high-bay warehouse has 55,525 sf on a 5.8-acre parcel near Interstate 495. Managed

by Stephanie DiCarlo, 303 Broadway Nominee TR borrowed $2.32 million from Enterprise Bank & Trust to facilitate the acquisition.

Colliers had an active year on the office sales scene, but industrial certainly was a big theme all of 2015 and into this year. Among other assets processed in 2015 were a couple of Prologis buildings as that international REIT continued to divest its Massachusetts portfolio, doing so through Colliers at 12 and 100 Campanelli Dr. in Stoughton, 250,000-sf of space bought by STAG for $10.6 million and the 188,000-sf purchase of 200 Shuman St. in Stoughton by Equity Industrial Partners for $3.27 million. Colliers also played a role in Deutsche Asset & Wealth Management as that firm also cashed out en masse on a major portfolio, using Dragos, Jacoby and friends to divest 80,000 sf at 175 and 375 Paramount Dr. in Raynham for $9.5 million and the Novaya acquisition in Wilmington of 326 Ballardvale St. The Colony Realty portfolio was another blockbuster for the Colliers team and $8.05 million was yielded in a 188,000-sf industrial sale of 532 Pleasant St. in Attleboro to MG2, the former Mayo Group led by John McGrail and Joseph Donovan. That firm separately bought an

80 STOCKWELL DR., AVON MA

159 RANGEWAY RD., BILLERICA MA

industrial building at 60 Border St. in East Boston during 2015, a deal Donovan indicated to Real Reporter could some day equate to new construction, possibly multifamily.

Out in Avon, Hilco Real Estate paid an even $5.0 million for 80 Stockwell Dr., a 248,000-sf flex industrial building in a deal negotiated by Cushman & Wakefield for the Davis Cos. C&W Executive VP Michael Frisoli and Associate Director Peter Whoriskey also procured the buyer of an asset that has 37,000-sf of office space and the remainder warehouse product on a 12-acre parcel offering immediate access to Route 24.

“Eighty Stockwell Drive has tremendous upside potential for any large tenant in the market today,” Frisoli said after that assignment was completed and Hilco named Whoriskey and him as exclusive leasing agents for a building Frisoli says is “in a strong industrial environment . . . and offers a highly desirable big block of space ideal

for one large user or multiple smaller users.”

Novaya Real Estate Ventures made its own Avon play in 2015, paying $14.4 million for 57 Littlefield St. and its 407,475 sf of warehouse space at Exit 19A of Route 24. The building was acquired in the spring at 89 percent occupancy.

Principal Peter Carbone III later said his firm was attracted by the location and overall strength of the Greater Boston industrial sector. “We think there is real value in upcoming vacancy at 57 Littlefield St. and an opportunity to leverage the tightening market and overall demand from cost-conscious tenants seeking funcitonal, cost-effective locations.”

Transwestern RBJ was broker on that sale, its contingent led by Christopher Skeffington.

The property was built in 1969 on 15.1 acres.

Eastern Bank provided $9.67 million in acquisition financing to the Boston-based borrower.

(See related story, page 12). u

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the trading activity and exclude some entity level transactions in the market, I would say it was kind of an average year for retail investment sales in New England,” reports Angelone. “The reason is that New England is such a sought after market for institutional capital that if they own good assets, they don’t want to sell them.”

Very few core centers sold in 2015, relays Angelone, meaning the majority of trades were secondary market properties where WILLIAM MOYLAN clients were trying to pare from their portfolios. “Institutional capital will certainly go beyond Route 128 for assets that have high barriers to entry and exhibit the characteristics of core quality properties even if they’re in secondary locations, but FRED WITTMANN the property has to be very strong in order to get real institutional interest,” Angelone explains.

HFF’s Koury considers the compelling story for 2015 being the REIT retreat where the publicly traded set backed off their acquisiLEONARD BIERBRIER tion appetite, one supposed reason being because they had already sold most of the properties that didn’t fit with their portfolio in 2012 and 2013. Instead, REITs focused on creating value with properties they already owned by expanding CHRISTINE CANNON and upgrading initiatives while also becoming more aggressive in leasing campaigns and buying out partners. Private REITs and advisors were also less prevalent, Koury recounts, with other private capital having the largest impact on shopping center transactions in the Northeast in 2015. Koury also frets there is a slowdown looming. “For the core product in 2016, we are seeing a thinning of the bench in the number of buyers willing to pay the most aggressive pricing, and if that continues, it eventually leads to a softening in pricing.”

NGKF’s Executive Managing Director Millerd has a more optimistic attitude regarding where the retail sales market is headed, and says he believes that with capitalization rates at their nadir,

WAYLAND TOWN CENTER, WAYLAND MA

some investors may be getting ready to sell. “The general consensus in the market from our clients is that we’re at a cap-rate plateau right now, and they’re not going any lower and prices aren’t going any higher,” he says. “So if you’re going to have a stabilized asset and there is nothing more to do on it, now is the time to sell it because it’s never going to be worth any more than it is now.”

Millerd adds that NGKF has a “half-dozen” supermarket-anchored strip centers they are currently marketing, but reports there is much stronger investor interest for development deals, such as the BU portfolio in Kenmore Square, and

WHITE CITY PLAZA, SHREWSBURY MA

the Suffolk Downs and Rockingham Raceway sites. “We’ve seen a shift from (investors) wanting core and core-plus deals to upside oriented deals, value-add development,” affirms Millerd. “When we have assets that are value-add – whether they’re development sites or deals that have the ability to create significant (value) over a 10-year hold, then we’ve got 15 to 20 bidders – easy. When we have deals that are real stabilized—supermarket-anchored retail or strip centers where the ROI doesn’t grow very much— ‘We are seeing a thinning of the bench in the number of buyers willing to pay the most aggressive pricing.’ we get four to five bidders.”

Millerd says the retail investment team (including U.S. Head of Capital Markets Robert E. Griffin Jr., Managing Director Justin Smith and Paul Penman) sold nearly as many assets in 2015 (24) as the previous year (their best) including a number of stabilized, supermarket-anchored strip centers launched while under the C&W label. The largest of those sales in the metro Boston market were a pair of Cape Cod assets in the $30 million range, including South Cape Village in Mashpee which traded hands from Boston-based C. Talanian Realty Co. (which has a dominant retail portfolio along Newbury Street and the Back Bay) to Dividend Capital Diversified Property Fund Inc. (DPF) for $35.5 million, or approximately $223 per square foot. The 143,000-sf, open-air shopping center is anchored by Roche Brothers, and 92 percent leased to 29 tenants, including Marshalls and Walgreens.

The Millerd/Griffin operation also brokered the $32 million sale of the Star Market-anchored Webster Square in Marshfield for South Shore retail owner/developer Curtis Management of Hingham to Brixmor Property Group, continued on page 121

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one of the nation’s largest retail-focused public REITs. The 184,000-sf center was 98 percent leased at the time of the transaction. Millerd and company also registered a number of other supermarket-anchored sales in 2015, including the $22.6 million purchase of Highlands Plaza in Easton, a 113,000-sf, 92 percent leased shopping center anchored by Hannaford Brothers that traded from Newmark client Samuels & Associates to Ohio-based REIT Phillips Edison & Co.; the $25 million acquisition of Wampanoag Plaza in East Providence, a 225,900-sf Stop & Shop-anchored shopping center purchased by Florida-based Sterling Organization from an affiliate of USAA; and the $12.4 million sale

SOUTH CAPE VILLAGE, MASHPEE MA

“

We are seeing a thinning of the bench in the number of buyers willing to pay the most aggressive pricing.

”

James Koury, HFF Senior Managing Director of Powerhouse Plaza, a fully leased, 81,000-sf Shaw’s-anchored shopping center in West Lebanon that Woburn–based Eastern Real Estate acquired from an affiliate of Dead River Properties of Portland, ME, a division of the Bangor-based petroleum company Dead River Co. In addition, the retail group shepherded the sale of a pair of non-grocery anchored assets in Rhode Island. RK Centers acquired Middletown Village, a 98,575-sf center tenanted by national retailers Barnes & Noble, Sports Authority, Michaels and Petco for $16.7 million from DDR; and The Grossman Companies purchased a 74,416 sf portion of Marketplace Center in Warwick from WP Realty for $15.9 million. The asset features a newly constructed LA Fitness as well as a Newbury Comics store and a Michaels.

The new JLL retail team of Angelone, partner William Moylan and Senior VP Nat Heald closed $276 million in trades (with another half-billion dollars in volume scheduled to close this year under an existing agreement) for CBRE last year, including two of the largest single asset retail sales of the year, White City Shopping Center in Shrewsbury and the mixed-use Wayland Town Center. The 206,000-sf White City was sold by a JV between Charter Realty & Development and Acadia Realty Trust to Inland National Real Estate Services for $97 million. The fully leased

MARKETPLACE CENTER, WARWICK RI

center received significant upgrades after being acquired in 2010 for $56 million, and is anchored by a Shaw’s Supermarket, with Petco, Dress Barn, The Paper Store, Planet Fitness and Austin Liquors also in the mix.

Wayland Town Center was purchased byZurich Alternative Asset Management from

FAIRHAVEN PLAZA, FAIRHAVEN MA

a joint venture between KGI Properties and JPMorgan Asset Management for $68 million. Anchored by a Stop & Shop and tenanted by Boston Sports Club, Ace Hardware, and Panera Bread, the asset also includes 17,000-sf of medical office space occupied by Beth Israel DMC, as well as dental and orthopedic practices. The sale was one of the few buys by foreign investors in the suburban grocery anchored retail arena. “You haven’t seen a significant influx of foreign capital buying suburban shopping centers,” affirms Angelone. “We have certainly seen interest from Canadian and Israeli buyers, but not so much on a one-off basis. It’s more trying to buy portfolios or entity level transactions. On the flipside, (Canadian REIT) Rio Can just sold their portfolio to Blackstone (for $2.7 billion).”

In other deals, Kimco Realty Corp. exchanged the 104,000 sf Shops at the Pond in Marlborough to RK Centers for $21.1 million; Katz Properties dealt the 81,000-sf Stop & Shop-anchored Fairhaven Plaza on Cape Cod that they acquired in November 2012 for $16.5 million to the Hampshire Cos. for $19.75 million; Wellesley-based Ames Alevizos Trust purchased the 101,000-sf Shaw’s-anchored Wareham Plaza continued on page 122

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from Unison Realty Partners for $11.5 million; and the 129,000-sf BJ’s Wholesale (grocery) anchored Willimantic Plaza in Connecticut was acquired by Phillips Edison from EDENS for $12.4 million, with Jeffrey Dunne and David Gavin of CBRE’s Stamford office representing the seller.

As part of another banner season for its retail team, HFF and Koury arranged the sale of the South Shore Place retail center to Lexington-based Bierbrier Development Inc. for $41.5 million, about $922 per sf. Constructed

by Cambridge-based Carpenter & Co. and sold by a JV between Carpenter and BayNorth Capital, the 45,000 sf asset is tenanted by Legal Sea Foods, Starbucks, AT&T, Jos. A. Bank, Qdoba, and T.G.I. Fridays. The trade proved one of the better stories of 2015 as homegrown Bierbrier Development outdueled a swath of institutional Goliaths to win the deal. The veteran shopping center owner who celebrated 40 years in the business this past season credits market knowledge and “a ton of research” leasing manager Christine Cannon and he did in advance of the high-profile deal, one Bierbrier later told Real Reporter was the largest commitment of his extended career.

Farther south in Connecticut, Koury and Fred Wittmann, Associate Director David Fowler and

record

OFFICE TRADES

Office Volume Sold Metro Boston Office Volume Sold Metro Boston 14Q1

$1,255,312,496.62

14Q2 14Q3

$1,980,534,400.00 $3,846,735,827.94

14Q3 14Q4 14Q4 15Q1

Office Volume 15Q1 15Q2 Sold Metro Boston 14Q1 14Q2 14Q3 14Q4 15Q1 15Q2

15Q2 15Q3

$1,255,312,496.62 $1,980,534,400.00

a 40,500-sf retail center at 163 Highland Ave. in Newton (fully leased by Staples and Petco) from Winhall Co. for $24 million; Federated Cos. sold the 69,000-sf standalone Price Chopper located at 50 Cambridge St. in Worcester to privately-held investor Red Apple Group of New York City for $18 million in February 2015 after purchasing the asset in August of 2014 for $16 million; and Frazer 103, an entity affiliated with Irish investor Paul O’Sullivan acquired the 7,000 sf 103-105 Newbury St. from Victor Newbury LP (managed by Butrimowicz Realty Inc.) for $14.6 million.

Among investors, Burlington-based Linear continued on page 123

Q4= 43%

$3,846,735,827.94 $2,325,221,022.16 $2,325,221,022.16 $1,479,714,668.07 $1,479,714,668.07 $2,095,700,570.62

$2,095,700,570.62 $1,343,366,865.17 $1,255,312,496.62 15Q3 $1,343,366,865.17 15Q4 $3,613,676,079.01 $1,980,534,400.00 15Q4 $3,613,676,079.01 $3,846,735,827.94 TOTAL VOLUME 2015 $8,532,458,182.88 $2,325,221,022.16 TOTAL VOLUME 2015 $8,532,458,182.88 $1,479,714,668.07

ONE THOUSAND PER ! $2,095,700,570.62

While Boston has seen a half dozen $1,343,366,865.17 commercial deals over $1,000 per sf in 15Q4 its history, the$3,613,676,079.01 acquisition of 222 Berkeley Street & 500 Boylston Street for $1,005 per sf was $8,532,458,182.88 the first such transaction TOTAL VOLUME 2015 larger than one million sf in size.

15Q3

real estate analyst Patrick McAneny negotiated the $9.9 million sale of Town Green at Wilton Center, a 35,000-sf boutique shopping center in the heart of Wilton. HFF advised the seller, an affiliate of Boston-based Boylston Properties, in the exchange to Westport-based Paragon Realty Group.

Horvath and Tremblay closed out their Marcus and Millichap careers with a bang, brokering nearly $500 million in retail sales last year, including over 30 transactions in the New England market (see related story, this section).

But not all significant retail deals were negotiated by the aforementioned teams. In other significant deals, Acadia Realty Trust acquired

Data sources: Real Capital Analytics, Encopmass Real Estate Strategy

14Q1 14Q2

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Retail was particularly active, acquiring 10 assets totaling $90 million in 2015, including a three-property portfolio from developer Ross Hamlin for $57.5 million (see story this issue).

Other significant retail transactions over $5 million included Winstanley Enterprises acquisition of Tri-Town Commons, the Shaw’s-anchored shopping center at 636-686 Washington St. in Stoughton, from Joseph M. Vecchio, trustee of City Realty Trust Three, for $7.5 million; RK Centers’ $5.1 million purchase of the 29,500 sf VFW Parkway Plaza at 1665-1675 VFW Parkway in West Roxbury, tenanted by Town Fair Tire, Pet Supplies Plus, and Bank of America. Ellen Faye of Capital Commercial represented the seller, Heather Realty Trust, in that deal; and an affiliate of AZ-based Store Capital purchased a fitness center at 30 Prince St. in Danvers (home to Boston North Fitness Center), from On Holdings, LLC (managed by Glenn Nazarian) for $5.1 million.

Standalone pharmacies remained a sought after asset in 2015, as Columbia CV Salisbury I and II (managed by NAI Hanson Management of Hackensack, NJ) purchased a CVS Pharmacy at 2 Lafayette Road in Salisbury from an affiliate of NH-based Tropic Star Development for $7.4 million; NYC-based Ladder Capital Finance bought the Walgreens at 75 Market St. in Rockland for $7.3 million from Ohio-based 7 Essex Green Drive LLC, managed by the Marsol Corp.; and California-based investor Rykal Bakersfield acquired a 13,175 sf Walgreens at 135 Broad-

HIGHLANDS PLAZA, EASTON MA

way in Lawrence for $5 million from CT-based firm Merchant-Mark II Associates. Another affiliate of the same entity, Merchant-Mark IV, sold the Walgreens at 610 Pleasant St. in Brockton to an affiliate of DJM Capital Partners of San Jose, CA for $4.5 million. Another noteworthy single tenant NNN deal was the $4.9 million sale of the Bank of America branch at 1093 Broadway in Saugus to Saugus Pooh LLC, (managed by Joseph J. Giamboi and Donald Zucker), which was acquired from Carter-Broadway LLC, managed

by Joshua W. Katzen and Jeffrey A. Libert.

A number of automobile dealerships also

traded hands in 2015, including Clay Subaru’s purchase of a dealership at 842 Providence Highway in Norwood for $8 million from William R. DiCarlo, trustee of 842 Providence Realty TR. Worcester Road Auto Realty Estate LLC (managed by Frank Hanenberger) purchased a dealership at 948 Worcester St. in Natick from Boch Realty Inc., (managed by Ernest A. Boch Jr.) for $5.4 million; and Raymond Ciccolo, owner of multiple dealerships under the Village Automotive Group flag, purchased a site from Rietzl Realty at 59 Pond St., Norwell for their u new Audi dealership for $4.7 million.

NH CIBOR AWARDS continued from page 45

In Manchester, the 15-acre expanse at 655 South Willow St. is large enough that upwards of a dozen new stores could be added to the South Willow Street retail corridor. Besides helping OSRAM Sylvania “in meeting their objectives,” Norwood says “we are also heartened that the strong, local buyer team has embarked on an exciting reuse and redevelopment program for this important MICHAEL TAMPOSI community asset.”

NAI Norwood Group is an affiliate of NAI Global, the world’s leading managed network of independently owned commercial real estate brokerage firms. Through this system of 355 offices in 55 countries, NAI Norwood Group leverages over 45 years of dedicated local ex-

CHESTER COLLEGE, CHESTER NH

perience around the world to ssist clients in negotiating leases, sales, business brokerage, investments, relocation, site selection and development.

NH CIBOR also gave an award for Best Industrial Deal to a sale/leaseback of 13 Industrial

Park Dr. in Hooksett where GE signed a 15-year lease prior to its sale with Michael Tamposi of CBRE advising the seller of 166,000 sf plus an expansion of 55,000 sf. That growth required working with the town to discontinue a road and make the expansion possible. u

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per-room price tag of $946,000.

Some technically disagree with labeling the Mandarin as the most lucrative hotel deal ever in Boston. They point to last year’s sale of the boutique Beacon Hill Hotel & Bistro at 25 Charles Street to the Saunders Hotel Group for $12.3 million, or $951,000 per room. Of course, that is less than one-tenth what the Mandarin fetched, that property listed by JLL. Either way, the Mandarin deal, as well as the Beacon Hill Hotel & Bistro sale, set a distinct tone for the hotel sector in general here last year. For instance, the brand new Godfrey Hotel in Downtown CrossSEBASTIAN COLELLA ing fetched $174 million, or $718,000 per room, in a “sale/lease back” deal late last year in which the joint venture of Oxford Capital Group and an affiliate of Walton Street Capital sold the recently built 242-room hotel to Germany’s Union Investment Real Estate.

A major trade orchestrated by Eastdil’s Capital Markets team of the Renaissance Boston Waterfront Hotel turned the asset over to a joint venture of Rockpoint Group, Highgate and Hotel Asset Value Enhancement spent an estimated $158 million on a Masschusetts Port Authority ground lease on the 471-room hotel across from the Boston Convention and Exhibition Center on Summer Street. The Eastdil team on that assignment included James McCaffrey and Sarah Lagosh with Alex Bradley and Carlos Febres-Mazzei. Although it closed in late 2015, Real Reporter first unveiled the agreement in May of last year. As part of their standard policy, Eastdil brokers declined comment on the transaction. Wells Fargo financed the deal with $106 million.

A press release issued in early December acknowledging the pact explained Marriott will continue to flag the property as a Residence Inn at 606 Congress St. that has a Presidential Suite and 20,000 sf of meeting space, state-of-the-art fitness center, indoor pool and trio of food and beverage options including Capiz Bar and M.C. Spiedo Ristorante & Bar. Highgate and hotelAVE have assumed asset management duties in the partnership with Rockpoint Group, part of an ongoing platform known as UNITE HERE that will undertake a capital renovation program at the Seaport hotel.

Also late last year, the 114-room Ames Hotel at 1 Court Street in Boston was sold by

MANDARIN HOTEL, BOYLSTON STREET, BOSTON MA

AMES BOSTON HOTEL, 1-14 COURT ST., BOSTON MA

Normandy Real Estate Partners and Contrarian Capital Management to Invesco Real Estate advisors and partner Gencom, a Florida real estate investment and development firm. The per-room price was just short of $470,000 in a deal negotiated by David McElroy of CBRE/NE’s hospitality practice. McElroy did not respond to media inquiries regarding 1-15 Court St., an 1893 former office building converted to a hotel in 2009.

Meanwhile, the 210-room Le Meridian Cambridge at 80 Sidney St. in East Cambridge

was divested by HEI Hotels to Junson Capital, a Chinese real estate investor, for $104 million, or nearly $500,000 per room.

Sebastian Colella, vice president at Pinnacle Advisory Group, a hospitality consulting firm in Boston, says all the blockbuster sales in Boston and Cambridge were ultimately the result of one thing: sound sector economics. The Boston-Cambridge hotel occupancy rate last year averaged about 81.8 percent. Average daily rates climbed to an historic high of $254.10, continued on page 125

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while revenue per available room also hit an all-time high of $207.83 last year, according to Pinnacle, among the industry’s leading hotel advisory and research companies.

Pinnacle’s numbers were reached despite the addition of nearly 1,000 new rooms in the two cities last year. Among the hotels that opened new rooms last year include the Fairfield Inn and Suites in Cambridge (123 rooms), the Hotel Envoy, Autograph Collection in Fort Point (136) and the Hilton Garden Inn in East Boston (178), the Godfrey (238) and Hotel Commonwealth (96).

“

There’s definitely a big attraction to Boston coming from national and international investors – and interest should stay strong.

LE MERIDIEN HOTEL, 80 SIDNEY ST., CAMBRIDGE MA

”

Sebastian Colella, VP Pinnacle Advisory Group

Two new arrivals early this year on the Boston scene included the dual-branded Aloft (330 rooms) and Element (180 rooms) in Seaport, on leased Massachusetts Convention Center property near the South Boston convention center, both the result of a $158 million investment by their joint developers, Ares Management and CV Properties. Starwood Hotels and Resorts announced the two hotels’ opening in January.

“The Boston-Cambridge market is doing very well,” says Colella. “All things are very positive. There’s definitely a big attraction to Boston coming from national and international investors – and interest should stay strong.”

And Colella notes that, according to Boston Redevelopment Authority data, there are at least 5,000 new hotel rooms, within 26 projects, in the planning pipeline in Boston alone. Colella stressed industry handicappers anticipate that not all of those will be built.

Still, some of the more high-profile hotel projects already under construction include the 326-room Yotel, owned by a London hotel chain specializing in tiny and low-cost rooms. The establishment is on the waterfront as part of the Seaport Square project considered a centerpiece of the neighborhood’s reclamation from a dusty industrial district.

Another project that swung into high gear

DAVIS COS. PAID $32.1 MILLION LAST NOVEMBER FOR THE HILTON GARDEN INN, 2 FORBES RD., WOBURN MA

last year was the massive 61-story Four Seasons Hotel and Private Residence project at One Dalton Street, on the edge of the the Christian Science Plaza in Boston’s Back Bay. That project, which is being developed by Richard Friedman and Carpenter & Co., will include 211 hotel rooms on the lower 23 floors and 180 luxury condos on the top floors.

In addition, Related Beal late last year started preliminary work on a 14-story complex, formerly known as the “Merano Project, at the corner of Beverly and Causeway Streets in the Bulfinch Triangle near North Station. Once completed, the project will include 220 hotel rooms and 239 below-market rent apartments.

The big question moving forward: Can Boston absorb so many new hotel rooms in the immediate and long-term future, even if the final under-construction and planned room count

doesn’t hit 5,000? “Long-term, yes, I think Boston can absorb them,” Colella says, ticking off a slew of the local economic pluses. “The fundamentals are great.”

But the concentrated Boston-Cambridge market, which had a combined 23,000 rooms in 2015, isn’t the only growing hotel market in the region. Though the performance of hotels outside of Boston-Cambridge wasn’t as spectacular last year, it was still impressive. The overall hotel occupancy rate for Greater Boston was 79.7 percent last year and statewide it was 70.4 percent, above the national average of 65.6 percent in 2015, according to industry data.

Meanwhile, revenue per available room last year hit $176.24 last year in Greater Boston, up 7 percent compared to 2014, while the RevPar for all Massachusetts hotels hit $122.65, up 8.1 continued on page 126

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percent. The revenue per available room in the US last year was $78.67, up 6.3 percent.

The strong suburban fundamentals led to a number of transactions last year. The Davis Cos., in partnership with Rubicon Cos., last autumn acquired the Hilton Hotel in Woburn. The seven-story, 344-key facility sits on eight acres at 2 Forbes Rd. in Woburn, directly off the I-95/I-93 interchange and a five-minute walk from the Cummings Park Business Center. The seller, Columbia Sussex Corp., was represented by JLL in a deal first unveiled by Real Reporter that had a Middlesex County Registry of Deeds price tag of $32.1 million. In an interview, the unJONATHAN G. DAVIS derperforming property was called “a classic Davis Cos.’ deal” by the firm’s eponymic CEO. “It is the kind of project we thrive on,” Jonathan G. Davis recounted, characteristics being a grade B asset in first-class location whose stature could be raised through physical upgrades GODFREY HOTEL, BOSTON MA and hands-on management. While not traditionally a player in that sphere, Davis Cos. he says. “The fundaments created a perfect rounded up famous hotelier Robin Brown and storm for transactions. Lenders were very aganother industry expert in Matthew Gordon, gressive. Subsequently, people could pay higher while a stint as chief operating officer at North- prices. There was a huge demand for hotels and Star Realty Finance Corp. gave Davis Cos. Pres- a lack of supply.” ident Richard McCready a track record in hotels as well.

“It’s not just one person,” says Davis, though he stresses the platform will proceed as opporThe fundamentals created a tunities arise rather than being a target product. perfect storm for transactions.

Regardless, between the robust Burlington/Woburn LWP activity and ability to buy an operating hotel below replacement cost made the firm James O’Connell, founder make 2 Forbes Rd. its initial foray into that areO’Connell Hospitality Group na. Says Davis: “We are really excited about the potential for doing something special with this asset and bringing it up to a new level.” That HFF’s Meikleham says strong suburban numpath is being aided by $31 million in mortgage bers not only propelled sales – such as transacfinancing from Webster Bank for the Davis Cos. tions last year involving the 418 BostonBurlingaffiliate, Woburn Hotel Property Owner LLC. ton Marriot and the Sheraton Needham Hotel in James O’Connell, owner of O’Connell Hos- Needham – but also prompted new hotel propitality Group, a mid-market brokerage group posals well outside Boston, particularly near or specializing in hotels, says suburban transac- along Route 128. Meikleham reports a number tions in his coverage area averaged about $15 of hotels have been proposed, including a new million last year and were up from about a doz- Archer flag in Nordblom’s thoroughly modern en deals in 2014 to 16 in 2015.

Northwest Park in Burlington, a Residence Inn “It was excellent in terms of transactions,” in Burlington, Hampton Inn in Woburn, Hamp-

“ ”

ton Inn & Residence in Waltham and a Marriot Courtyard in Dedham. “The market can definitely absorb it,” he says of new hotels in general.

HFF’s Hospitality Practice Group which includes Meiklehman and Director Alan Suzuki has given the firm’s Capital Markets team another line of business, one that in 2015 included a $94.2 million sale of the Boston Burlington Marriott Hotel to Crow Holdings of Dallas on behalf of Cornerstone Real Estate Advisers, delivering a healthy $225,000 per key. A Real Reporter article on Dec. 14th indicated Pyramid Hotel Management would operate the facility that dates to 1979 and previously yielded $73.3 million in Oct. 2011. Besides existing hotels, HFF has also aided developers pursuing new construction since Meikleham and Suzuki arrived on the scene two years ago. (See related story, page 18.)

Joshua Bowman, chair of the hospitality group at the law firm of Sherin and Lodgen LP in Boston, pointed to other recent deals outside Boston that show how strong the regional market has become, albeit not as strong as the Boston-Cambridge hotel market.

Such deals include the Montreal-based Lixi Group’s $20.75 million acquisition last year of the Residence Inn by Marriott Boston Andover in Andover. The Sherin and Lodgen team, led by Bowman, representd Lixi Group. The seller was Magna Hospitality.

But it wasn’t just the immediate Boston metropolitan area experiencing an improving hotel market. In western Massachusetts, Bowman noted the opening last year of a new 95-room Hilton Garden Inn in Pittsfield, a new hotel expected to serve the gradually rebounding Berkshire County economy. Sherin Lodgen represented the developer, Prem Management LLC. Also in western Massachusetts, the Cranwell Spa and Golf Resort in Lenox sold for $18 million. CampGroup LLC, owner of a handful of Berkshire summer camps, and L.D. Builders, owner of a mixed-use complex in Lenox and condominium holdings in the Berkshires, bought the property from the Burack family, according to published reports.

Sitting on 380 acres of land, Cranwell Spa and Golf Resort includes 114 hotel rooms, an 18-hole golf course, a spa and two restaurants.

The new owners have vowed to upgrade and expand the high-profile resort property. Those continued on page 135

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During its first full year at HFF, Meikleham and Suzuki completed the $94.2 million sale of the Boston Burlington Marriott Hotel for client Cornerstone Real Estate Advisers, the CRE investment arm of MassMutual Life Insurance Co., as Crow Holdings emerged the winning bidder there at $225,000 per key. That is record pricing along Route 128, according to Meikleham, well-versed in that market where Suzuki nd he just completed a land deal at Nordblom’s transformative Third Avenue lifestyle complex in Burlington, a repositoned 1960’s-era office park today featuring a cacaphony of uses including entertainment, retail and residential. Archer Hotel will open a 147-room inn there as that newly created brand of Lodgeworks expands across the country, its flag already in New York City plus Austin, TX, and Napa, California.

RESIDENCE INN, BURLINGTON MA (RENDERING)

“

We have seen more people looking to dip their toes in the hotel space who are new to the business.

”

Denny Meikleham, HFF hotel broker Meikleham and Suzuki also advised Charles River Realty Investors and National Development at New England Executive Park, another Burlington office park borne of the same era as Northwest Park and undergoing its own rejuvination into a LWP campus featuring a hotel that Finard & Co. is building on the land parcel harvested by HFF. “Denny and Alan have really taken some strong market share in a short period,” HFF Senior Managing Director Riaz Cassum says, opening up the opportunity for his group on the debt and structured finance side to provide buyers of the listings the needed loans to accomplish a given transaction. “That has become a very active product line for us in a short period of time. Denny and Alan have done an excellent job bringing us business.”

For Meikleham, the admiration is requited, noting that the HFF Capital Markets team overall has become a force in nearly all CRE food groups, and crediting that mortgage banking arm as a key factor. “It is really a great platform,” he says. “To be at a shop that is one-stop service with some of the most talented debt people in the country we feel is a real advan-

RESIDENCE INN, BURLINGTON MA (RENDERING)

tage for what we do.”

There is certainly plenty of action in the hospitality realm these days, and not from just the typical investment classes such as hotel REITs. “We have seen more people looking to dip their toes in the hotel space who are new to the business because they are having a hard time finding value-add opportunities that provide any yield,” he reports, adding, “It does promise good returns, but you need to be careful if you are new to the industry—it is not the same as other types of real estate.”

The new millennium has brought fresh prospects for hotel development as well, Meikleham

says, one popular venue being the older suburban office parks aiming to compete with LWP environments in the urban setting by bringing a soup-to-nuts roster of amenities to the site, including lodging. Lifestyle centers are also finding hotel rooms to be a popular item for denizens aiming to make a night of such an experience. “I could easily sell one of those sites if they became available today,” he says.

In the case of New England Executive Office Park, recast as The District, Residence Inn by Marriott will operate a 170-key hotel with 3,000 sf of meeting space, a breakfast room, business continued on page 129

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regarding his firm’s shifting focus. While the commute may have been far easier to Danvers or Cambridge, Brown says Brookwood’s globe-trotting platform is necessary now that institutional capital is returning to the Greater Boston area, their focus more on buying bestin-class, well-leased investments.

Brookwood is going especially far a field, while another investor spoken to is circling tertiary New England markets due to low returns from metropolitan Boston assets. “It gets harder every day” to identiDWIGHT Y. ANGELINI fy opportunities that would attract yield-driven capital or are deemed worthy of the risk, says the industry veteran, adding, There are more people operating in (metro Boston) everyday.”

New Hampshire, Rhode Island and Connecticut still NILESH K. BUBNA offer assets that can produce higher yields, says the investor who does not have a fund and insists there is “zero pressure” to push capital, especially in light of aggressive expectations among sellers. “The musical chairs have to stop at some REID T. PARKER point,” muses the investor.

Still others are just arriving on the scene up against more mature funds coming back for another helping after earlier successes, at times their third or fourth round. Unpeturbed by the competition, a fresh crop of ROBERT A. PROVOST III private capital operations kicked off platforms last year in hopes of finding their own hidden CRE treasures, many sporting institutional experience who intend to apply that knowledge in the lower middle markets, a realm institutional behemoths seldom stray into due to inadequate size.

Among the newcomers active in 2015 would be Fulcrum Real Estate Investors, Northbridge CRE Advisors and more recently Longpoint Realty Investors, that group located at 116 Huntington Ave. in Boston comprised of TA Associates Realty professionals Dwight Y. Angelini, Nilesh K. Bubna, Reid T. Parker and Robert A. Provost

68-70 CENTRE OF NEW ENGLAND BLVD., COVENTRY RI

III. Having managed over $8 billion of real estate prior to the launch, the current penchant for Longpoint is for “Last Mile” industrial real estate and infill shopping centers. Coverage areas include the Northeast plus New Jersey/New York, Florida and Texas. Provost is responsible for New England, the Mid-Atlantic and Southeast.

According to the website, Longpoint’s “roots in institutional real estate combined with a nimble, entrepreneurial approach position the firm as a dynamic new voice in real estate private equity.”

Northbridge came on line in autumn 2014 and its first full year in 2015 proved fruitful as founders Dean Atkins and Greg Lauze completed three separate acquisitions culminating in November’s $38 million purchase of two office buildings in Hopkinton. As part of NorthBridge’s long-term strategy focused on stabilized assets, the Hopkinton properties at 68-78 Elm St. are fully leased to Perkin Elmer. Totaling 198,000 sf, they had been owned since 2012 by US Realty Advisors, that group having paid $31 million. It was an exclusive of the Newmark Capital Markets team led by Robert E. Griffin Jr., Edward C. Maher Jr. and Matthew E. Pullen.

Atkins and Lauze are typical of many new players bearing institutional experience, with Atkins a Harvard-trained attorney who worked at Mintz Levin specializing in real estate plus spent time at Transwestern RBJ while Lauze is an alum of Blackstone and Colony Realty Partners as well as JLL where he was responsible for a range of product types. Their skills are accentuated by Senior VP Kim Collins and Chet Atkins—the former US Congressman—who is serving as an in-house advisor along with Jamie Hoyte and James Segal, also Harvard graduates.

“We are having a lot of fun,” Dean Atkins says in a recent interview after closing on yet another building, this one an 84,000-sf industrial property in Brockton whose anchor tenant

is W.B. Mason. That $5.2 million buy brings the portfolio to $55 million, impressive given he says NorthBridge takes “a rifle shot approach” in carefully vetting limited deals rather than chasing every listing coming available or those mandating extensive attention. On top of providing advisory services to third parties such as large owners of institutional real estate, the firm’s investment platform is focused on New England and “places a greater importance on protecting and preserving capital than on chasing high returns,” according to the website which also explains NorthBridge is on the lookout for “mis-priced or undervalued assets” which when acquired are expected to benefit from hands-on management and “maintaining quality relationship with tenants.”

NorthBridge launched its portfolio paying $4.1 million to secure 30 Burlington Mall Rd. in Burlington, that 12,500-sf leased to major childcare provider Knowledge Universe Education. DTZ brokers Bob Cleary and Rick Robinson negotiated that March deal which was financed by $2.1 million from TD Bank and sold at an initial capitalization rate of 7.8 percent.

HFF was the broker when NorthBridge in late summer paid $7 million for 20 Carematrix Dr. in Dedham, a 40,000-sf office building listed in a four-asset portfolio of infill real estate.

Country Bank for Savings delivered $5.8 million to finance that property which Lauze says was acquired due to steady cash flow and his firm’s desire to buy when possible inside Route 128, with communities such as Dedham and Westwood expected to benefit from urban tenants seeking less-expensive space.

According to Dean Atkins, 20 Carematrix Dr. is in a proven location and “has great, creative office space with an open layout that companies today are looking for,” plus was well-maincontinued on page 129

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tained by its prior ownership. “I think we made real progress in 2015 and have some very good assets to show for it,” he says, and as evidenced in the Brockton deal, the platform remains active, albeit selective based on the strategy.

Listed by NAI/Hunneman principal David Ross with Gina Barroso and Ovar Osvold, the fully leased Brockton building at 1010 West Chestnut St. houses multiple tenants “and subdivides really well,” plus has a company in W.B. Mason which Dean Atkins says he has great admiration towards for having pioneered the fast-delivery mantra tied to e-commerce.

“It’s exciting to have them there,” he says, while NorthBridge also finds the location off Route 24 favorable to such product and finds that sector attractive under the right circumstances. “We like industrial a lot, especially true warehouses like this one that subdivides really well,” he says.

NAI/Hunneman advised seller Jack Straw Realty Trust and procured the buyer. Ross credits the building’s full occupancy to three long-term tenants as reflective of his client’s “pride of ownership” in a building located on 8.7 acres close to Route 128 and I-495. “There was a lot of interest from investors since the property generated long-term stable cash flow along with scheduled rent increases in place,” Ross relays.

Fulcrum Real Estate is a creation of Robert C. Kirschner and Richard E. Putprush who pledge to “create leverage by magnifying results,” owing to the definition of a fulcrum. The force behind that plan is 50 years of institutional experience, as detailed in a Real Reporter article last October outlining their first two conquests, flex/industrial product in Rhode Island and a

20 CAREMATRIX DR., DEDHAM MA

well-located industrial building in Dedham, that a 20,000-sf property whose broker was Savills Studley professional Steve Woodworth. Putprush said after the sale his firm was drawn by a cash-flowing lease to John Deere Landscaping at 60 Stergis Way, plus new zoning that could lead to a higher-and-better use down the road for an asset close to the Legacy Place mixed-use complex and other high-end real estate.

As an industrial building, 60 Stergis Way also benefits from having outdoor storage, a difficult element to find inside Route 128, explains Putprush, so even if the rezoning did not pan out, investors would benefit from the in-place cash flow.

Forty days prior to that acquisition, Fulcrum had secured a land site and 34,850-sf industrial building in Coventry, RI. The property had come available when its existing owner determined 60-70 Centre of New England Blvd. no longer fit its investment platform. Fulcrum did have to perform to meet a tight closing schedule and several ancillary tasks related to that

and did other work stabilizing the asset, but felt the $1.6 million basis was low enough to put in maximium effort, delivering a building dating to 1998 acquired well below replacement cost.

The deal was even sweeter when Fulcrum was quickly able to lease the entire building, including one tenant who signed on for 10 years.

“It had a little bit of hair on it and a lot of moving parts, and that is the sort of deal we feel we can make a difference with,” Kirschner told Real Reporter in the Oct. 2015 article regarding the company which he joined after years at such leading firms as Charles River Realty Investors, National Development and New Boston Fund.

Putprush’s career includes decades as a broker for Cushman & Wakefield and a stint at Copley Real Estate Advisors. Fulcrum intends to operate in the range of deals from $2 million to $15 million.

As for companies stepping up in 2015, the list is extensive, with a recap of the leading players in the coming pages listed under Private Equity. u

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center, indoor pool and 7,500-sf restaurant. It will serve occupants of a 56-acre campus with 1.1 million sf of space in 13 buildings.

The same masterminds behind Residence Inn are behind the Archer Hotel design, explains Meikleham, and that brand has been searching for new locations in both downtown and suburban markets. According to a description of the concept, Archer brand “evokes the creative soul of its location with quirky, curated luxuries and a sincere staff dedicated to service.” It aims to be the highest quality hotel in a deep Burlingotn hospitality market catering to both business travelers and tourists “seeking a unique boutique hotel experience.” u

MARRIOTT MOXY HOTEL, STUART STREET, BOSTON MA (RENDERING)

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“It’s sort of a weird time in Connecticut.”

Less of a mystery are the continuing positive trends in Hartford, the capital city, where last year Boston’s Paradigm Properties purchased the 885,000-sf, 38-story UnitedHealthcare Center at CityPlace I, the tallest building in the state. Paradigm bought the landmark tower for $113 million from Equity Commonwealth. Bank of America is also a tenant at CityPlace 1.

“It’s the trophy asset of Connecticut,” says Christopher Ostop, Executive VP at JLL, whose firm brokered the CityPlace 1 deal through the New England Capital Markets team led by Christopher Angelone and Frank F. Petz, with Ostrop providing investors guidance on the property and its surroundings that DAVID B. GROSSMAN Ostrop says received a wide berth of interest, and for good reason. “It has a phenomenal tenant roster,” he says, adding, That was a major deal for Hartford.”

Paradigm Properties President John Caldwell said after the exchange LOUIS J. GROSSMAN that his firm intends to implement “a client-centric management approach” as a way of retaining its position as a market leader, explaining that “the cornerstone of Paradigm’s approach to property management is the client experience and providing a level of service that “exceeds their expectations” from leasing and daily operations to accounting and rent procedures.

“Our experience as an owner has shown us that this aspect of our services is the key contributor to maximizing revenue and investment value,” explains Caldwell, while Paradigm CEO Kevin McCall was effusive in his praise for the city, proclaiming that, “we plan to be in Hartford for the long-term” thanks to a view that positive lifestyle trends in urban America are making their way to northwestern Connecticut. “There is a growing amount of residential, street life and nightclub activity that will only enhance the appeal of the urban workplace for Cos. that compete for the best talent in the market,” McCall says.

And Paradigm was not alone in its commitment to the city in 2015. DHN Associates of New York also purchased Hartford’s Constitution Plaza, a six-building, 679,000-square-foot complex in downtown Hartford, for $71 million from MetLife, which was also represented by JLL

100 CONSTITUTION PLAZA, HARTFORD CT

in the deal. The JLL Capital Markets team on the case included Managing Directors Frank F. Petz and Jessica Hughes and Vice President Matthew

“

We plan to be in Hartford for the long-term.

”

Kevin McCall, CEO Paradigm Properties

Sherry. The properties are anchored by two towers at One and 100 Constitution Plaza.

Those two deals represented a sizeable chunk of Hartford downtown Class A space of about six million sf. Though the downtown office market still suffers from a 17 percent vacancy rate, the climate is still considered solid and

steady, making it an attractive market for some investors, officials say.

The downtown did suffer some specific setbacks, such as United Technologies Corp.’s move from downtown to nearby suburb of Farmington. Still, the firm is remaining in the same county and its move is not considered a terrible blow, Ostop says.

Meanwhile, Hartford is starting to see more of what other American cities, such as Boston, have experienced already: An increasing number of people wanting to live in downtown settings.

In the case of Hartford, about 1,000 housing units have either opened or have been proposed for the downtown, usually via older buildings being converted into multifamily complexes, and often with ground-floor shops and restaurants.

“Retail is now starting to flood into the downtown,” says Ostop. “The downtown seems more active these days.” continued on page 131

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In New Haven, there are also signs of increased activity, driven largely by the ripple effects of Yale University’s push into the life-sciences sector. Alexion Pharmaceuticals, for instance, earlier this year started moving into its gleaming new 500,000-sf headquarters at 100 College St. in New Haven, which hasn’t seen construction of a Class A building in years. A total of 1,000 employees are being housed in the new facility.

Despite the positive developments in Hartford and New Haven, Connecticut suffered a major blow in January when General Electric

“

It’s sort of a weird time in Connecticut.

LEE FARM CORPORATE CENTER, DANBURY CT

”

Jacob M. Grossman, Co-President Grossman Cos.

announced it would be moving its headquarters in suburban Fairfield County to Boston later this decade. GE cited Connecticut’s high taxes and what it called a negative attitude toward businesses for its move to Massachusetts.

Hopefully, the GE move will serve as a wakeup call for some people,” says Ostop. “It’s more like: Who’s next?” But Grossman, of the Grossman Cos., says the state— and its commercial real estate market—will rebound from the GE move. The Grossman Cos. is already fielding calls from firms interested in leasing 66,000 sf that GE now occupies in ROBERT SHEEHAN one of Grossman’s buildings in the Lee Farm Corporate Park in Danbury, says Jacob M. Grossman, whose family owned firm is also led by Co-President Jacob B. Grossman and Chairman Louis Grossman. In all, Grossman Cos. owns three industrial properties, two office buildings, a shopping center, a stand-alone restaurant building and other properties spread around the state, says Grossman. Last year, the firm bought a 10,000-sf vacant office building in Milford, Conn., as a sign of Grossman’s continued faith in the Connecticut market, he says.

The Grossman Cos. is also pushing ahead with plans for a multifamily housing development in Westport, Conn. And earlier this year the Grossman Cos. purchased nearly four acres

TOWNLINE SQUARE, MERIDEN CT

at the site of a former car dealership, to build new restaurants in a retail area of Danbury, Conn.

Robert Sheehan, vice president of research at KeyPoint Partners in Burlington, Mass., says the Greater Hartford retail market is holding relatively steady, with net absorption hitting 367,600 sf last year, up from 160,000 sf in 2015. There’s a total retail-space supply of 37.2 million sf in the Greater Hartford area.

Last August, Holliday Fenoglio Fowler (HFF) LP announced that it had closed the $44.5 million sale of Townline Square, a 314,825-sf, grocery-anchored shopping center in the Hartford suburb of Meriden. HFF marketed the property on behalf of the seller, Urstadt Biddle Properties Inc., which sold it to Castle Rock Equity Group LLC. HFF retail practice expert James Koury advised the seller and procured the buyer of that asset.

Despite such encouraging activity, Julia Anne Slom, senior vice president and team leader of the commercial real estate group at

Washington Trust, says retail is getting hit in Connecticut by the same market dynamics plaguing other areas of the country, namely the rise of online retail and the subsequent squeeze on traditional store-front retailers. “The big-box stores are downsizing,” she says. “They’re all reviewing their market options these days. It’s not a pull back, but it’s the whole industry looking at where retail is going.”

One retail plus is the growing popularity of “lifestyle centers,” or mixed-used developments that include housing, offices and retail all together, she says. Multifamily housing is very strong in parts of Connecticut, particularly in New Haven, where vacancy rates are low and investor interest is high. Washington Trust has been involved in a number of multi-family financial packages she says, both for sales and new construction, she says.

“There’s a lot of action in that market,” she says of multifamily housing. “In all sectors, we like Connecticut a lot. It’s a good market for us.” u

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hire he will continue to service existing and new clients in his specialty areas of landlord and tenant representation.

AY’s Managing Director of the New England region, Michael Smith, is responsible for the Hartford office’s strategic direction and overall growth strategy, having played a leading role in his firm’s decision to plant a flag there, with coverage heretofore coming from the Boston office where Smith is at the helm of AY’s Capital Markets division along with colleague Scott Jamieson and Brandon Dickason. “I felt there was sufficient existing market share and some very significant institutional players in Hartford, HARTFORD, CT it made sense to be there where you can interact on a daily basis and expose people to the platform and services we have available,” Smith explains, adding, “We are already seeing good benefits.”

“We are thrilled to expand our New England operations with an established industry veteran like Andrew Filler leading the way in conjunction with Michael Smith,” comments AY CEO Mark Rose in a press release explaining the move.

“Hartford is a capital city currently experiencing a transformation that is increasing housing and amenities, and offering attractive commercial real estate opportunities,” says Rose. Furthermore, these opportunities will appeal to local, national and international investors as well as landlords, tenants and owner-users in the office, retail, industrial and multi-residential asset classes.”

“Before entering a new market,” Rose continues, “we ensure that an established local industry veteran is in place to make the transition seamless and allow us to draw from well-developed, long-term client and business relationships.

Andrew is an established market leader in Hartford, and his familiarity with the region’s 24-million-square-foot office and 70-million-square foot industrial markets will be of tremendous benefit as we expand into this budding metropolitan area. Ultimately, Andrew and future recruits in Hartford will allow us to strengthen our full-service platform and fulfill our mandate of providing the best possible solutions for clients’ unique business and real estate needs.”

The new office is at 185 Asylum Street, 15th floor, CityPlace II in downtown Hartford. Earl Webb, AY’s president of US operations states: “With its strategic location midway between Boston and New York, the new Hartford office will allow us to build on many established client

“

Andrew is a proven industry leader and his leasing expertise will benefit both landlords and tenants.

”

Avison Young New England Managing Director Michael Smith on Andrew Filler

and business relationships throughout New England, the eastern US and eastern Canada, and create many exciting new ones.”

As an insurance capital of the world and a major financial center, Hartford is home to countless large institutional investors who prefer to invest in multiple US markets and internationally. Webb lauds Filler’s “comprehensive leasing knowledge, extensive client roster and excellent service” that are now available to help AY customers. “Drawing from Andrew’s experience, investors will have confidence that their

properties will be leased over the long term to high-quality tenants,” Webb relays.

AY opened its first New England office in Boston in October 2010. The Fairfield/Westchester office located in New Canaan opened in June 2014.

“Andrew is a proven industry leader and his leasing expertise will benefit both landlords and tenants,” Smith offers. “The relationships he has developed with clients and other industry contacts over the years will be of great value as we continue to expand our footprint throughout New England.”

Filler joined RM Bradley in 2010 after 15 years as a First VP at CB Richard Ellis in Hartford, while during his tenure he has created and implemented such client-oriented services as availability profiles, leasing strategies, market analysis, lease comparison studies, financial analysis, and lease renewals and negotiations, AY conveys. Past and current clients include Axinn; Day, Pitney; People’s United Insurance; Robinson & Cole, Simsbury Bank, Talcott Realty, the University of Saint Joseph and Veltrop & Harkrider.

“One key factor that attracted me to Avison Young is its client-centric business philosophy,” Filler says. “I’m thrilled with the opportunity to offer a broad range of resources to clients as well that will help grow their businesses in Hartford.”

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complex “will ensure that the property continues to provide a truly unique Class A housing alternative to more traditional communities in Stanford’s South End and Central Business District.”

The development is at 150 Southfield Ave. providing easy access to I-95, U.S. Rte. 1, the Metro-North train station to New York City and various bus lines. Anchor Point has 14 studios, 159 one-bedroom apartments, 130 two-bedroom units and 20 three-bedroom apartments in a pair of four-story buildings.

Apartments feature fullsize washers and dryers in every home, white lamBLAKE BARBARISI inate or granite countertops, white raised-panel Thermofoil cabinets/vanities, walk-in closets and private patios or balconies are other features. Select homes have nine-foot ceilings with fans, gas-burning fireplaces and views of ADAM MANCINONE Stamford Harbor.

Community amenities include a gated entrance with controlled access, personal concierge service, 24-hour fitness center, wireless Internet lounge, business center, an indoor basketball and racquetball courts, an outdoor swimming pool, bike racks and bike storage, covered parking and landscaped areas for barbecues and picnics.

Last spring, the IPA multifamily show wound up in East Haven for the $21.0 million trade of Stony Brook Village, also luxury rentals, in that case 165 units, making its sale $127,500 per unit. Apartment homes at Stony Brook Village

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While declining to discuss the Royal Arms sale terms, Butler did say “we are pleased to have facilitated this transaction on behalf of our client” and the industry veteran predicts good times ahead for the new sponsor. “This is a high-quality asset that the buyer was able to purchase at below replacement cost since historic tax credits were used to capitalize the redevelopment in 2008,” he explains.

The trio of buildings comprising Apartments at Royal Mills were originally built between 1860 and 1922, their conversion to residential

TURKS HEAD BUILDING, PROVIDENCE RI

average 980 square feet and 70 percent have two bathrooms.

Witten and Nolletti worked alongside Marcus & Millichap Associate Wes Klockner on that assignment on behalf of HP Stony Brook LLC where they procured the buyer, Par Stony Brook LLC. “Stony Brook Village is a transit-oriented multifamily asset in a suburban location that offers the new owner a value-add opportunity through the implementation of a modest renovation program,” Witten relays of 140 Mill St., which sits in a quiet, wooded setting yet is still on a Connecticut transit bus line and close to Interstates 91 and 95 as well as the New Haven Metro North Railroad Station.

There are eight colleges and universities within 20 minutes of the community, including Yale University, Southern Connecticut State University, Gateway Community College and Quinnipiac University. Stony Brook also borders the Foxon Road retail corridor, which recently welcomed a ShopRite supermarket that is within

walking distance.

Another 2015 Connecticut exclusive for IPA had TGM Associates playing the role of seller, its harvesting of TGM at Willow Grove involving 135 apartments that Beachwold Residential ponied up $27.7 million to take control of, that a $205,550-per-unit play for the garden-style apartment complex located off Briar Ridge Road. Nolletti and Witten were joined by IPA senior Senior Associates Blake Barbarisi and Adam Mancinone representing the seller, TGM Associates L.P. Mancinone and Barbarisi have recently been acknowledged as emerging leaders in the region.

“TGM Willow Grove at Danbury provides residents with the largest apartment homes in the Danbury area and great value, particularly in comparison with Stamford and other Fairfield County and New York MSA locations,” Nolletti says of that project, adding it is another property that can benefit from select capital improvements. u

occurring from 2006 to 2008 after being added to the National Register of Historic Places in 2004. “Great care was taken to preserve many of the original elements,” relays Butler, in so doing creating “beautiful historic living spaces” including ceiling heights up to 16 feet, divergent floor plans with views of the Pawtuxet River on which it sits, and an overall unit size of 1,250 sf.

The two larger structures are the Royal Mill, its height ranging from four to six stories and the four-story Ace Dye Mill. There is also a two-story mill that has a pair of townhome units and gatehouse building, that piece vacant but Butler says it has the potential for conversion to more units or amenity space.

Encouraged by rising demand, the seller upgraded 56 units with new bathrooms and kitchens, features including granite countertops, hardwood cabinets and flooring and marble-topped vanities. The project is known for “state-of-the-art” amenities, according to CBRE/NE, the first-class clubhouse sporting a fireplace, pool table and wet bar plus resident lounge, plus there is a business center and fitness facility. Taking advantage of its environs, there is a kayak launch, landscaped river walk and riverfront barbeque areas. And despite an old-world brick-and-beam layout, the Royal Mills has climate controlled garage parking and free Wifi in common areas. u

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is home to the Providence Business Journal.

Burlington-based Nordblom Co. partnered with Cornish Associates of Providence to acquire the Georgian Revival-designed building that came along with two adjoining parking lots at 78 Fountain St. and 1 Eddy St. from A.H. Belo, who had also previously owned the newspaper (sold in late 2014). Nordblom essentially purchased the building vacant before Alden and CBRE inked the newspaper to a 30,000 sf renewal—about 20 percent of the space. “We’re redeveloping it for multi-tenant and we’ve got a lot of interest,” explains Anderson, who adds that the entire building was gutted, extensive exterior work is underway, and the owners are putting an endcap on the building, redeveloping the old garages into retail.

Anderson and First VP Andrew Galvin also brokered the $7.9 million sale of Richmond Square, a three-building, 125,000-sf office complex (80 percent occupancy) that traded from Essex Richmond LLC to an affiliate of Dedham-based Salvatore Capital Partners. The team also represented KGI Properties in the $3.4 million sale of a 43,000-sf mixed-use asset (office/ retail) in Wayland Square in Providence; and also brokered the sale of a 100,000-sf air conditioned manufacturing building located at 30 Plan Way in Warwick for $5 million. “We’ve also got a number of deals we’re going to be out in the market within the next 90 days that are of all shapes and sizes – suburban and urban – so it will be interesting,” says Anderson.

The largest Rhode Island transaction last year actually closed in 2016, as part of a portfolio purchase by Oak Street Real Estate Capital, a Chicago-based private equity real estate firm.

Oak Street acquired five properties from the Metropolitan Life Insurance Co. in a sale leaseback (which included 12-year leases for each of the properties), including the MetLife Building at 700 Quaker Ln. in Warwick, which sold for $50 million.

Retail accounted for a number of significant dollar volume acquisitions, with the Geoffrey Millerd-led team from Cushman & Wakefield and now Newmark brokering the sale of three assets, headlined in the $25 million acquisition of Wampanoag Plaza in East Providence, a 225,900-sf Stop & Shop-anchored shopping center by the Sterling Organization from an affiliate of USAA Realty Advisors. C&W retail group that includes Managing Director Justin Smith and Paul Penman also shepherded the trade of two non-grocery anchored assets. RK

75 FOUNTAIN ST., PROVIDENCE RI

100 JEFFERSON BLVD., WARWICK RI

Centers bought Middletown Village, a 98,575sf center tenanted by national retailers Barnes & Noble, Sports Authority, Michaels and Petco for $16.7 million from Ohio-based REIT DDR Corp.; and The Grossman Cos. purchased a 74,425-sf portion of Marketplace Center in Warwick from WP Realty for $15.9 million. The asset features a newly constructed LA Fitness as well as a Newbury Comics store and a Michaels arts and crafts store.

Grossman Cos. got a financial boost with the $11.4 million loan from HarborOne Bank arranged by CBRE/NE and its team of Kyle Juszczyszyn, Chris Coutts and Taylor Shepard.

Co-President David B. Grossman, who knows a thing or two about debt as a principal of hard-money lender First Boston Associates, cited the CBRE/NE results, relaying that “it was great to work with the team who ensured a

transparent, smooth and competitive process,” adding that “we are pleased with the outcome and to have established a new lending relationship with HarborOne, which we look forward to expanding.”

In other activity, New York-based developer Vincent J. Geoffroy purchased the Union Trust Building, a 12-story, 62,000-sf Class B office building at 170 Westminster St. in Providence, from Dorrance Associates, Inc. for $4.4 million.

Built in 1901 and listed on the National Register of Historic Places, the asset will be converted into a mixed-use property featuring 62 units of rental apartments plus ground floor retail and second floor commercial space. And Neil Amper, SIOR, Vice President of Capstone Properties, sold a nine-unit, three-building office complex located at 100 Jefferson Blvd. in Warwick on behalf of Spectrum Properties for $2.5 million. u

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studio, one- and two bedroom apartment units (plus a first floor restaurant) in one of the nation’s tightest residential rental markets. The project is designed to attract a growing market of young professionals, graduate students and empty nesters interested in an urban lifestyle, Poitras outlines.

Waldorf and Poitras purchased the asset for $3.6 million from an affiliate of Gloucester-based Hecht Development, securing $11.9 million in acquisition/construction/permanent mortgage financing from East Boston Savings via EagleBridge Capital.

The mixed-use project is also beneficiary of $3 million in historic tax credits as well as $1.2 million in tax credits from Rebuild RI, which provides gap financing. The building was approximately 60 percent occupied at the time of purchase, with firms signed to short-term leases. After the final tenant vacated in December, demolition began in January, and construction is now underway, with the project expected to be completed by year’s end. “There’s a growing tech sector that needs affordable housing in good locations for their workers, and that’s what we’re trying to address with 95 Chestnut St., so I think we’re going to do very well there,” TURKS HEAD BUILDING, PROVIDENCE RI

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two hotel deals, in Pittsfield and Lenox, show how geographically spread out the hotel-industry recovery has been across the state, not just in the Boston area, says Bowman. “It’s a very attractive asset class right now,” he says.

On Martha’s Vineyard, the Hob Knob Inn, a 17-room boutique hotel in Edgartown, sold last fall for $4.9 million to VIC Partners LLC, a California real estate company that focuses on lodging properties, according to published reports. The total Hob Knob sale price, when the business, furniture and other fixtures are included, reportedly drove the per room price to well over $300,000, according to an industry source.

Robert Webster, managing director at JLL Hotels, says the hotel sector is holding its own in other parts of New England too, especially in New Hampshire and Rhode Island, where a number of key transactions occurred last year.

“Overall, New England is doing well,” Webster says.

But any discussion of the regional hotel in-

dustry ultimately comes back to the core Boston-Cambridge market – and all of its recent incredible sales, new construction,and openings of late. “We’ve definitely put Boston up there as one of the best investment-grade cities in the US,” says Webster. “Boston just had a great year in 2015, a very strong year.”

“

It has just been a great, great time to be in the hotel business in Boston.

”

David McElroy, Senior VP CBRE/NE

But how long can it last? How will the rest of 2016 play out for the hotel industry? Most agree it all comes down to the economy – and with the recent turmoil in the stock markets and the slowing economies in China and elsewhere, some industry players believe it’s going to be hard to keep up with the pace set in 2015.

Poitras predicts.

In autumn 2014, Waldorf had acquired the Turk’s Head building, a 17-story, 146,000-sf granite-and-limestone office asset from an affiliate of Philadelphia-based FB Capital Partners. “It’s the best B building in the market,” opines Poitras. “It had done well but needed new capital investment, a new business plan and local management. We came in and really revitalized the building’s look and feel and repositioned it in the marketplace, and in less than 15 months we took the occupancy from 80 percent to over 90 percent, increased NOI by almost 20 percent, and it is back on the map.”

Poitras conveys that his firm is exploring other opportunities to reposition multifamily, industrial and office properties in Rhode Island as well as other New England markets, and currently has a number of deals in the pipeline. “What’s happening in Providence now is that there is a convergence of good news and good things happening,” he says. “The governor (Gina Raimondo) and her administration doing a lot of the right things, they’ve brought in a lot of good people, and they’ve put some incentives in place to help spur development. And that, combined with an improving economy and rising rents, has really made Providence an attractive place to invest.” u “I think we’ve peaked in pricing,” says O’Connell. “We’re starting to experience pricing pressures.” The pricing pressures include, among other things, rising interest rates, he noted. Not that there will be a big fall-off in 2016, many experts predict. “Hotel performance is expected to remain strong, so it will still be a strong transaction market,” O’Connell says. “I just think there will be a leveling off of prices in 2016.” David McElroy, a senior vice president who specializes in the hotel sector at CBRENew England, agrees that everything depends on how the state, national and global economies hold up in 2016.

Regardless, McElroy and others are still savoring the hotel industry’s undeniable success in 2015, an outcome that few could have seen after the 2008 recession when that sector was among the hardest hit across the land, even roiling Boston and Cambridge’s traditionally superior occupancy and RevPar metrics. “It was just fantastic,” says McElroy of the results, himself a seasoned industry veteran who has seen several cycles in negotiating trades across New England.“It has just been a great, great time to be in the hotel business in Boston.” u

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los and Joseph Porta, SIOR, orchestrating the transaction that closed in late winter 2015 and was funded with a 72 percent LTV loan from CMBS lender Cantor Fitzgerald.

Albany Road scrambled to put a deal together before it hit the sales block, and Knisley explains that may have kept the price of $181 per sf below what it could have achieved in an open process, a format under which the nearby One & Two Portland Square just blocks away fetched $255 per sf. Both have historically commanded similar rental rates, he reports, and Knisley further points to a parking ratio of 1.3 vehicle per thousand sf let at 100 MidJAMES HARNDEN dle st., higher than competitors because the garage is not open to the public. That should provide a “competitive advantage,” he says.

The building which had not changed hands since completion in the 1980s was 99 percent leased when JOSEPH MALONE acquired, but an inability to accommodate its expansion forced Bank of America to vacate 24,000 sf. Existing denizens include law firm Bernstein Shur in 56,275 sf, the General Services Administration in 40,000 sf and accountant Barry Dunn, JENNIFER SMALL which occupies 35,575 sf.

Knisley indicates he was further drawn by “a commanding presence” at Franklin and Middle Streets in downtown Portland barely two blocks from the waterfront and surrounded by a collection of amenities. Being able to acquire at a lower basis left room to spend $2.0 million in capital improvements “and position the property for rent increases as the market continues to tighten,” he observes. After shooting into double digits after the recession, vacancy rates dipped to a scant 7.3 percent in 2015, two full points off that metric to begin the season and the fourth straight year Class A space is below 5 percent, according to CBRE The Boulos Group broker Nate Stevens Besides the booming regional economy, with the unemployment rate a mere 3.4 percent, investors have been eyeing tertiary markets like Portland due to severe capitalizaton rate compression Boston. And while there are higher yields out there, with 100 Middle St. said

100 MIDDLE ST., PORTLAND ME

SOUTHBOROUGH OFFICE PARK, SOUTHBOROUGH DR., SOUTH PORTLAND ME

to be in the 8 percent range, CBRE The Boulous Group indicates in its Capital Markets overview for the year that properties are now trading at historic lows for Greater Portland, although that does not appear to have curtailed interest.

North River Co. took down One and Two Portland Square, with the Griffin team headed up by Griffin, Edward C. Maher Jr. and Matthew E. Pullen. Preti Flaherty provided legal counsel to North River, a firm which has close ties to Maine in owning several other commercial properties regionally. Its principals are Coleman P. Burke, Christopher Flagg and Christopher Pacheco. In a statement regarding the agreement which he says could well be the largest sale of its type in Portland ever, Sigfridson cites “location, quality and size” as the factors driving a multitude of prosective buyers and in keeping its vacancy historically low, being 99 percent filled at the time of its sale. “These buildings command some of

the highest rental rates in Portland,” he says.

The late September sale in South Portland involved 110,000 sf at 400, 500 and 600 Southborough Dr. in the SouthBorough Office Park, a 7.4-acre assemblage constructed between 1987 and 1989 near the Maine Mall.

The asset has a roster of high-profile companies including ADP, New York Life Insurance and Prudential Financial and traffic engineering company VHB. On the seller’s side, Pullen and Samantha Hallowell handled the transaction that also had Griffn and Maher as advisors with Joseph Malone and Jennifer Small of Malone Commercial Brokers acting as local representative for Deutsche A&W, which had held the buildings for over 10 years.

Harnden Commercial will serve as asset manager going forward for the new ownership, and its namesake said his client intends to make upgrades to the properties. u

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a tenant roster that includes GlaxoSmithKline, Histogenic Corp. and ImmunoGen Inc. Then as Richards Barry Joyce & Partners, Transwestern RBJ assisted Intercontinental in that process.

King Street is anything but a newbie to the suburban lab neighborhood, with founding principal Thomas Ragno laser focused on life sciences space in the Bedford/Lexington/Waltham corridor where the biggest concentration outside of Cambridge is clustered. Now co-owned with veteran Stephen Lynch, the privately held CRE investment and management firm owns and operates over 700,000 sf in Route 128 Central and Cambridge, having the past few years bought up assets in the Alewife District, most JEANNETTE GAEDE notably the Pfizer Pharmaceutical portfolio.

Concurring the entry price of $572 per sf “is a big number,” Skeffington still predicts “King Street will do very well with 830 Winter St.,” his faith stirred primarily by the learned JOSEPH OLIN sponsorship. “They know suburban lab better than anyone, and they recognized this was a rare opportunity to buy into that market,” Skeffington says, further opining that $70-per-sf rents in Cambridge should make a $40 KRISTIN JOYCE tally just a few miles west increasingly attractive. King Street has also adroitly identified a chance to build more supply on the 8.2-acre site, Skeffington relays.

The latest Transwestern RBJ lab survey indicates it would probably be well-received, with 2.76 million sf in Route 128 Central at a scant 3.9 percent vacancy versus an overall suburban average of 9.8 percent for 5.58 million sf. Activity has also been concentrated there in the 206,000 sf of positive net absorption for Route 128 Central tracked by Transwestern RBJ over the prior 12 months compared to a total of 174,000 sf everywhere else, outlines the bioSTATus survey prepared by Northeast Director of Research Chase Bourdelaise and Associate Connor Allen.

Skeffington touts the firm’s attention to research as another instrument in the Capital Markets tool chest which is enabling Transwestern RBJ to take on nine-figure exclusives

BOSTON LANDING, 15-40 GUEST ST., BRIGHTON MA

TWO EDGEWATER DR., NORWOOD MA

whenever the opportunity arises. Yet while “we would love to do more of those,” Skeffington stresses the six-member Capital Markets contingent will continue to target the Middle Markets where they have had a formidable presence

“

We have gained a lot of experience in the Middle Markets for properties of all sizes and shapes.

”

Chris Skeffington Transwestern RBJ

that won several substantial exclusives in 2015.

One became a $24.2 million exchange involving 167,875 sf of office space at 3 and 5 Carlisle Rd. in Westford sold by Normandy Real Estate Partners to another New Jersey based concern, Curo Enterprises, whose manager is Steve Cox. Skeffington was unable to discuss that off-market swap because of confidentiality agree-

ments, but one informed observer calls the per-sf figure of $144 “really healthy” for office space on Interstate 495. “They must be happy,” the industry veteran says of Normandy which acquired both buildings in 2006 via its $1.8 billion purchase of Glenborough Realty Trust, a California REIT that paid $10.2 million in April 1997 for the Westford slice. They were constructed in the mid1980s on 18.4 acres right at Exit 32 of I-495.

Besides Skeffington and Vice Presidents Roy Sandeman and Andrew Stone, Transwestern RBJ’s Capital Markets professionals are Vice Presidents Jeannette Gaude and Joseph Olin plus Associate Kristin Joyce. Skeffington says he is pleased the practice group continued to advance its reach in 2015. “We do it every year,” he says. “We don’t pick up everything that comes along, but we have gained a lot of experience in the Middle Markets for properties of all sizes and shapes, and last year was no different—we had a good mix in price range and product type.

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leased buildings in Hopkinton acquired by NorthBridge CRE Advisors. The bigger of those two was $56 million in refinancing backed by the 1.7-million-sf Brighton complex owned by New Balance Shoes. Skeffington and VP Andrew Stone worked alongside Purpura and Chris McCauley of Transwestern RBJ and NB Development LLC manager Jim Halliday, whose group is behind the dramatic changes along a once dusty industrial strip known as Guest Street.

“The refinancing of 15 and 20 Guest St. gives us greater flexibility to focus our resources on the larger Boston Landing development,” explains Halliday, who declares the combination of commercial, luxury residential, sports and hospitality space CHASE BOURDELAISE coupled with credit-quality tenants “makes Boston Landing the premier mixeduse development in all of Greater Boston.”

Skeffington recounts there was “heavy competition” for the refinancing among a stable of Tier One CONNOR ALLEN lenders and credits Wells Fargo for submitting the winning 10-year proposal that entails some 350,000 sf. Blue Hills Bank won the day in Hopkinton, that note closed a few weeks before the separate Boston Landing loan was finalized. Transwestern RBJ was already familiar with Boston Landing as leasing and property manager, whereas they also knew market veterans Dean Atkins and Greg Lauze of NorthBridge, which was formed in late 2014 and has already completed four deals in Greater Boston. Stone and Sandeman were on that financing project.

The Capital Markets team handled $105 million of financings last year, with another deal of substance being $15.9 million arranged for Ferris Development Group, which in March 2015 bought a pair of Waltham office buildings totaling 129,200 sf at 1432 and 1440 Main St. (see Ferris Development Group article this issue). Middlesex Savings Bank was the lender on those assets. The Capital Markets team also participated in the sale between Charles River Realty Investors/NatDev and Crosspoint Associates to Ferris for $22.2 million. Skeffington was joined by Sandeman plus principals John Lashar and Ron Friedman in advising Ferris Capital.

“We are working to help our existing clients

ONE PATRIOTS PARK, BEDFORD MA

ONE PATRIOTS PARK, BEDFORD MA

and to go out and find new ones,” Skeffington says of the structured finance strategy and says the firm “made great strides” on that front in 2015. The platform is supported by more than simply a desire to create a full-service unit, but from direct experience in the lending world, with both Skeffington and Stone having once worked for lenders including Anglo-Irish Bank providing analysis to a myriad of high-profile listings. “We feel very comfortable,” Skeffington relays of possessing that skill set. For 2015, Transwestern RBJ Capital Markets completed $386.5 million of transactions, $282.3 million of which involved outright sales.

Besides the Westford silence, there is a gag order on a separate office building deal Transwestern also peddled in the past year, this one a structure perched along the path of progress known as Arsenal Street in Watertown where transformational changes are underway. Middlesex Registry of Deeds records put the result for One Arsenal Place at $18.0 million paid to an affiliate of Boylston Properties, a developer revamping the abutting Arsenal Mall and other nearby Watertown properties into such uses as

a hotel and modern office space. The Arsenal Place transaction also occurred in July 2015 involving 64,625 sf in the form of a commercial condominium. Boylston’s Waterpart LLC had paid $5.0 million for One Arsenal Pl. in Jan. 2010.

Activity was spread out in 2015, with trades closing in all but two months. The biggest exchange from a square footage metric was 100 and 400 Meadow Rd. in Boston’s Hyde Park district, a hulking industrial site totaling 860,000 sf that sold in two pieces for an aggregate $32.7 million. In July, ElmTree of St. Louis snagged a 98,500-sf Norwood Building at 2 Edgewater Dr. which is stabilized by a 10-year lease to Siemens. LNR was the special servicer harvesting a building that had been given back to its lender after the difficult 2008 recession.

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the world is getting a positive message regarding Portland, its stock on the increase thanks to a rebounding economy and rising tide of progress that is drawing rave reviews. “A rejuvenated Portland . . . and its appealing waterfront have a way of coaxing visitors to stay for a whlle,” the Wall Street Journal cooed in one article featured in the JLL/ NAI offering memorandum, while another had Chicago Tribune declaring it “San Francisco of the East.” New JOHN MEADOR York Times put the community among the Best Places to Retire even as Forbes rated it sixth best city for job prospects and 11th best “hipster” neighborhood.

Besides Portland’s grooviness and other perceived qualities, the listing’s ROBERT WEBSTER brokers aggressively touted the parcel as “the best remaining vacant land site in all of Portland,” while O’Connor told Real Report in the December story that “It is a spectacular piece of property” which he anticipated early on would draw JOHN HARPER a crowd from near and far, and he used Leatherwood’s pursuit as a barometer of the value. “It says a lot to see him go after it,” O’Connor said in the article where Leatherwood was deemed “a class act who knows how to get things built.”

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peddle the 145,000-sf building to office users whereas Longfellow has laboratory in mind, a strategy it had previously pursued with a smashing success at 1030 Massachusetts Ave. just outside Harvard Square in Cambridge. “They felt confident they can take advantage of the location near Hartwell Avenue (in Lexington)” where several life sciences firms are turning to of late, explains Skeffington, who counts the summer 2015 sale of 80 Central St. in Boxborough as another solid result for its client when an abutter at 90 Central St. was approached and committed to pay $13.5 million in July.

Constructed in 1988 on 37 acres, 80 Central St. totals 149,525 sf. Piedmont Office Realty Trust

A GARAGE AND PRIZED DEVELOPMENT SITE ON PORTLAND, ME’S WATERFRONT BROUGHT $20 MILLION IN A 2015 SALE BROKERED BY JLL AND NAI/DUNHAM GROUP.

Based in central New Hampshire with an office in Sanibel, FL, Norwich Partners is a privately held firm that has invested over $400 million in joint ventures, managed funds and real estate development and outlines on its website 20year relationships with all three major brands, Hilton, Marriott and Starwood. The company has produced over 3,000 hotel units including a trio of inns along Route One North in Peabody, those being the Fairfield Inn, Homewood Suites and Springhill Suites. Norwich was also designated in 2015 as developer of a coveted hotel site in Boston’s theater district, as first revealed by Real Reporter last summer, the Stuart Street parcel an exclusive of HFF’s Capital Markets duo of Denny Meikleham and Alan Suzuki. The Moxy will come on line in 2018, according to Norwich Partners.

Boston may be an especially desired venue for hotels with urban fundamentals among the best nationally, but JLL research shows Portland is no slouch in posting records during 2014 on occupancy and revenue per available room. RevPAR

of $148 for its most recent reporting year put the city 11th nationally. And while that sector is famous for its unpredictable nature in uncertain times, the brokers ran hard touting the garage portion as a stabilizing infludence, the seven-story, 211,700-sf structure having come on line in 2008. It is the second biggest in Portland behind 761 spaces at 26 Pearl St. a facility which is above 167 Fore St. on monthly ($140 versus $130) and average daily rates ($37 versus $31).

Not only does that open up the possibility for garage rent increases down the road, the cash flow is seen as an added element of stability for the new ownership. The total revenue reached $1.19 million in 2014 and $1.32 million in 2015 while there is 5,075 sf of available retail space in the garage seen as another money source. “The garage was a real help” in making the site work, says Luce, especially since 80 percent of the revenue is from monthly partners and from a block leased long-term by a third party. u

is the new owner. humongous 407,475-sf warehouse Campanelli and partner TriGate (see story, industrial section). The folCapital retained Transwestern RBJ to lowing month, 20 Constitution Dr. in pitch 300 Friberg Parkway in WestborTaunton yielded $1.47 million for its ough, an 85,000-sf office building datclient, that property totaling 77,900 ing to 1983 that in mid-July 2015 sold sf, while Campanelli hired the firm to for $6.2 million, practically three times flip 222 Mill Rd. in Chelmsford barewhat the Braintree-based investor had ly a year after buying that 53,100-sf spent in June 2014 before conducting RON FRIEDMAN flex industrial asset for $3.35 million a fast-track renovation regenerative in October, the buyer there an Illinois enough to lure Signature Healthcare to the list- group, Schleifring North America. ing for an all-cash purchase. The Michigan entity Skeffington says the pace has picked up on the buy side is managed by Soon K. Kim. again in 2016, with “a ton” of assignments Transwestern RBJ was active again on the in the pipeline in citing the adaptability of the industrial front in 2015, an arena which has in- entire company for the continued growth in a creased its popularity markedly since the 2008 competitive environment. “We all work togethrecession, as evidenced in the $14.3 million er and help each other out,” he says. “We have spent last April for 57 Littlefield St. in Avon, a a lot of hands touching our deals.” u

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in the history of Boston when—as Real Reporter unveiled on April 23rd of last year—heavyweight investor DivcoWest muscled its way to the front and paid $291 million for a site whose master-planned buildout of 4.5 million sf features hotels, laboratory, office and retail with more than half the square footage set aside as residential.

“A lot of big things are going to happen there very quickly,” Petz told Real Reporter after his client and DivcoWest did acknowledge a few months later the Real Reporter article of a project which could potentially deliver over $3 billion of CRE value in one estimate qualified as “conservative” by its author. In a press release issued last August formally announcing the pact, HYM Managing Director Thomas O’Brien agreed the deal would help unlock “unrealized potential” in the wake of multiple delays, the most famous being a challenge by environmentalists over Chapter MICHAEL DIGIANO 91 waterways regulations and a nasty breakup between the original joint venture that paired landowner Pan Am Railways and the erstwhile Spaulding & Slye. The 2008 recession which followed those events further pushed the project onto the planning shelf until Canyon-Johnson made its commitment.

“HYM is proud to have partnered with Canyon to finally and irrevocably set these rare development parcels, 17 in all, on a path to being developed in accordance with a plan that will further catalyze thousands of new jobs, millions of dollars in tax revenue, thousands of new residential units and acres of new public space,” O’Brien relayed in his firm’s statement, adding, “We look forward to working with DivcoWest to help write the next chapter.”

The investor which in May announced its fifth investment fund—one that will seek $1.5 billion of equity commitments—acquired North Point for DivcoWest’s $976-million Fund IV. “Our partners and we are excited to acquire NorthPoint and continue the site’s transformation into what we believe will be one of the most sought-after mixed-use communities in the country,” Shiff said in the DivcoWest release in which he commended the sellers for their “outstanding work preparing the project for development” while explaining his firms interest in Cambridge While it was a major milestone for NorthPoint, that was hardly the only land transfer of note in 2015, with another rapidly evolving urban area—Boston’s Seaport District—seeing

SAUSAGE PARCEL, BOSTON MA (RENDERING)

355 MAPLE ST., BELLINGHAM MA

two other master-planned sites change hands, the largest a $184.5 million consideration for 75 Northern Ave., part of the 12.5-acre parcel assembled by developer Boston Global Investors and Morgan Stanley Real Estate Funds that will yield its own mixed-use mini-city featuring luxury condominiums, high-end retail and modern office space. The new owner is WS Development, another can-do homegrown organization.

Also, Cottonwood Management and its offshore investors forked over $119.6 million to Boston Global/Morgan Stanley for 3.5 acres called Parcels M1 and M2 where they are approved to construct three residential towers totaling over one million sf (125,000 sf retail) and 300,000 sf of parking. Located at Congress Street and Seaport Boulevard, it has been branded M1M2.

The third Seaport land sale that turned heads came in the final days of 2015 when the so-called Sausage Parcel delivered $36 million for Madison Seaport Holdings LLC and its manager, Denis P. Dowdle, which had paid $5.6 million in April 2006 for the oblong site and then secured approvals for 414 apartments on its 30,450-sf footprint. Newmark’s Capital Markets team led by Michael Byrne with Thomas Greeley and Casey Griffin produced a Miami-based buyer in Crescent Heights America, which bought

the site via 399 Congress LLC. It was approved under Madison’s sponsorship as a 22-story tower with 414 residential units.

But land sales were not just the domain of urban neighborhoods, as evidenced by a plethora of deals involving sites even far past e Route 128, with industrial especially popular in that realm as a result of increased demand and limited modern product. Those conditions led Martignetti Liquors to the Myles Standish Industrial Park in Taunton where the company paid $11.5 million for 115 acres, a site overseen

by MassDevelopment whose leasing agents are Catherine Minnerly and Ovar Osvold of NAI/ Hunneman. CBRE/NE broker Steve Clancy advised Martignetti in the transaction for 680,000 sf where distribution facilities from Braintree and Norwood will be relocated into, with the structure expandable to 1.3 million sf.

The $100 million venture would not have been possible were it not for the state’s finance and development agency teaming up with the Taunton Development Corp. to carve out another 220 acres at the highly acclaimed Myles Standish Industrial Park back in 2012, infusing $6.1 million from a state fund to improve the Phase IV expansion and ready the site for new companies continued on page 141

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such as Sullivan Tire, another venerable Bay State company that now occupies 200,000 sf in the expanse as a call center, office and warehouse.

The Sullivan Tire agreement was also tendered by Minnerly and Osvold for the non-profit partnership, and is hardly the first time NAI/ Hunneman and Minnerly have been at the Myles Standish table, with the South Suburban expert having done deals advising the Taunton Development Corp. at the original park dating to the 1980s on an exclusve NAI/Hunneman has had since the 1970s initially under the guise of David Cavanaugh.

NAI/Hunneman principal Michael DiGiano— whose expertise at land sales also needs the wayback machine to that same THOMAS O’BRIEN era when Hunneman was a major developer of industrial parks—wrapped up an especially lengthy site search that culminated this past summer after being engaged by the client in 2010, that assignment at the behest of a Chinese subway TODD MASON car manufacturer hired to deliver new machines to the Massachusetts Bay Transportation Authority for its Orange and Red Line routes, with China Rolling Railway Corp. mandated that the badly needed 284 “heavy rail” vehicles be designed and assembled in state.

Some 50 possibilities were assessed for the RFP that had specific requirements including rail service and excess power, while DiGiano added new construction was CCRC’s preference. Stakes were high for the host community, with 100 construction jobs and 150 permanent plant positions hanging in the balance. The solution came in Springfield where the sprawling Westinghouse Electric Co. facility had been demolished by a Las Vegas casino operator who bet wrong that its site would be tabbed the western Massachusetts gaming center when rival MGM got the nod for its downtown Springfield complex.

That meant doubly good economic news for the beleagured metropolis when CCRC picked 655 Page Blvd. for the manufacturing building that will cost $107 million and is slated to be delivering rail cars by 2019. Once the MBTA contract is completed five years later, the client is further hoping to win other North American contracts and assemble the cars at the site which does have room for expansion from

MARTIGNETTI HEADQUARTERS, TAUNTON MA (RENDERING)

655 PAGE BLVD., SPRINGFIELD MA (RENDERING)

220,000 sf to 500,000 sf, another item on the RFP check list. “It did require a lot of patience, but this is an excellent fit for CCRC, who we really enjoyed working with,” DiGiano told Real Reporter for an October 2015 article recapping the extended exercise. “The city and the neighborhood really got behind the project and made (CCRC) feel welcome, and that was great to see,” DiGiano also relayed.

Avison Young broker Kevin Malloy was on his own lengthy assignment conducting a land search that culminated in last December’s $26 million sale and leaseback of a new custom-designed building erected at 355 Maple St. on behalf of Victory Packaging for its Northeast regional warehouse to an affiliate of Crow Family Holdings through LIT Industrial LP. The developer was Seefried Industrial Properties of Atlanta, whch engaged Campanelli of Braintree as general contractor of the 250,000-sf property. Victory occupied the building last November and then exercised an option to acquire 355 Maple St. in a deal completed the following month. Avison Young Houston principal Todd Mason represented Victory Packaging on the build-to-suit lease, while the firm also brokered the subsequent sale. The assignment, which was a finalist for top industrial transaction in the Commercial Brokers Association’s contest for 2015 Massachusetts real estate deals, equated to $104 per sf, a figure Avison Young says could be an

all-time high for a conventional warehouse trade along Interstate 495.

“There was tremendous buyer interest since most investors familiar with our market could appreciate the high barriers to entry and limited existing supply, Victory Packaging’s credit profile and stability of their long-term lease,” Malloy outlined recently to Real Reporter. The $104 rate was “unchartered territory” for that submarket, he says, explaining “it is expensive to build in our region and the new construction rents and quality of the tenant clearly supported a higher price than historically seen on (I-495).”

The reasons for increased tenant demand include the e-commerce trend sweeping through consumer delivery models and deployment of prime locations for so-called “higher-and-better” uses. According to Encompass Real Estate Strategy in its summer 2016 industrial market overview, the current vacancy rate in I-495 South is presently 7.1 percent for 21 million sf, the inventory posting 320,000 sf of positive absorption in that submarket during the prior 12 months.

Malloy reports developers are starting to take notice, especially the clamor for facilities at least 30 feet in height versus the 22-foot levels seen in buildings of the 1970s and 1980s. “This recent shortage in supply has led to some of the first limited speculative development in over 10 years to address the steady demand.” u

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185 DARTMOUTH ST., BOSTON MA

plenty of awe, Greaney’s faith in the district and Boston economy continued from page 48 delivered a flawless exit of $367 pension fund Oxford Properties per sf in January 2015. Value led the charge locally this past in the portfolio came from imyear, nailing down the country’s proving the assets and boosting fifth-largest asset traded in 2015 rents in a market where record via the Eastdil-brokered purchase Class B asking rates are rivaling BRIAN CROSS MATTHEW GODOFF KEVIN KILEY of Blackstone’s 222 Berkeley JAMES F. GRADY low-rise space in Boston office St. and 500 Boylston St. in the Back Bay, then lion on the Synergy buildings. towers, HFF brokers outlined after that closing. spending another $155 million to acquire 745 When NTT got to town, Synergy and Gree- The team on that deal were Managing Director Atlantic Ave. across town in the Leather District, nOak had multiple assets that caught the inves- Coleman Benedict, DIrector Benjamin Sayles that 174,000-sf mid-rise bought from Beacon tor’s attention, with that group separately buy- and Real Estate Analyst Patrick McAneny.

Capital Partners through JLL. In the case of 2 Oliver St., NTT was iming through Newmark 2 Oliver St., a refurbished NTT is based in Tokyo and was graduating Class B office building Greaney and partner pressed enough to pay a healthy $355 per sf from three other US buys when Synergy’s 23-27 GreenOak had stabilized after buying it for $52 for the 11-story, 222,375-sf versus $233 per School St. and 141 Tremont St. came on their million in Dec. 2012. Price of admission in the sf Synergy/GreenOak went in at, the structure radar screen at the behest of HFF, the mortgage July 2015 trade: $79 million. among the biggest taken on at that juncture, banking company with a global committee that Synergy paid a collective $39.2 million for though both firms do now own the 13-story, conducts regular visits to Asia, Europe and the 131,000 sf at 1-6 City Hall Plaza, 27 School St. 445,000-sf Ten Post Office Square that cost Middle East. Boston-based Senior Managing Di- and 141 Tremont St. at the peak of the market, them $143 million to buy against stiff comperector Riaz Cassum is a leader of that endeavor the amount topping $300 per sf raising eye- tition in autumn 2014. Listing broker Newmark and says NTT demonstrates how news about brows among some market watchers, and the promoted 2 Oliver St. for its heft that stretches Boston’s vibrancy has reached the Pacific Rim. prospect got more hand-wringing when reces- for almost an entire city block and was tout“Foreign investors feel very comfortable in sionary times set in one year later, a bust espe- ed as a connector between the downtown and Boston,” says Cassum who was in China this cially hard on the Downtown Crossing District Rose Fitzgerald Kennedy Greenway. spring expanding HFF’s database of both debt where the properties Synergy acquired in July Synergy was also focused in 2015 on retooland equity groups who appear eager to go after 2007 from Thomas J. Flatley Co. are located. As ing its capital stack when deemed prudent, as in everything from ground-up construction to fully of last July’s trade, Synergy cynics had become the case of a refinancing at its 185 Dartmouth continued on page 143 leased office towers. The investor spent $48 mil- a silent lot, and this time to no one’s shock but

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St. mixed-use building in the Back Bay, that loan delivered by HFF and Cassum. HSBC Realty Corp. loaned $55 million in March 2015 on the erstwhile 441 Stuart St. that the borrower had bought in May 2012 at a consideration of $40 million.

Back on the sales ledger, Synergy traded its headquarters at 100 Franklin St., a venerable restored office building straddling Downtown Crossing and the Financial District. A domestic buyer won the day in that instance, as Clarion Partners spent $48.7 million to secure the nine-story, 124,000-sf building that Synergy bought for $33.5 million in Oct. 2008, one month after Lehman Brothers collapsed. That is $270 per sf whereas Clarion doled out $392 per sf in the May 2015 acquisition.

The limestone and marble building was restored by Synergy to embrace its historic past while incorporating modern mechanicals and technology. Newmark Executive Managing Director Matthew E. Pullen says investors were

100 FRANKLIN ST., BOSTON MA

27 SCHOOL ST., BOSTON MA

drawn to the sponsorship and track record of strong tenancy to top-rated companies such as Webster Bank, which runs its Boston operations from the property. “The building is 93 percent occupied to a diverse tenant roster with below market rates, presenting a desirable combination of durable in-place income and notable upside potential,” Pullen says of the asset which was negotiated under the Cushman & Wakefield flag for the firm which is now at Newmark. Robert E. Griffin Jr. and Edward C. Maher Jr. also participated in that exclusive.

In yet another pruning which did not close until January of this year, the landlord spun off four Class B buildings to a venture led by Westbrook Partners, in the deal acquiring 115 Broad St., 211 Congress St., 184 High St. and 100 North Washington St. Westbrook spent $90 million on that 237,450sf assemblage of Class B office buildings. The Gotham-based investor also this year launched its 10th investment vehicle that hit $2.8 billion after seeking just $2 billion at the outset. Synergy and GreenOak had paid a collective $56.1 million in acquiring the

four assets, equating to $236 per sf versus $379 per sf Westbrook spent.

Synergy principals did not respond to inquiries as of press deadline, leaving others to speculate on reasons for the lack of activity. Some theorize the firm could be among a growing number of early entry investors no longer able to find the value-add opportunities Greaney’s hands-on operation was known for, while others suggest that like many of the investors who have grown substantially this decade, Synergy may have turned its attention to the existing portfolio in a bid to improve cash flow and repositioning. Ten Post Office Square has been a bit of a handful, for example, with the structure suffering a serious fire in the spring and now undergoing an extensive renovation of common areas. Greaney’s team also finagled a buyout of a below-market lease on the ground floor into which a restaurant is being eyed for replacement, a situation observers say would prove a valuable addition.

The firm Greaney founded in 2003 did continue to expand its professional ranks, hiring in early 2015 veteran property manager Chad J. Boulay to oversee a portfolio which at the time encompassed 31 buildings and 3.5 million sf where 400 companies were occupants. As detailed in a Real Reporter article on the matter, Boulay has served at such well known local firms as Equity Industrial Partners, HallKeen and Wellesley Management and also served as property manager overseeing One Federal St., the Financial District tower owned by Tishman Speyer. Boulay joined a contingent whose other chief managers include Maura Griffith Moffatt, its director of investments, plus Leasing Director James F. Grady, Senior Director of Finance Brian Cross, Asset Management Director Matthew Godoff and Kevin Kiley, who leads the construcu tion division.

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Those are the sort of denizens KS has in mind for Connector Park in Lowell and Highwood Office Park, properties that not only deliver heft— the Lowell asset has over 199,000 sf at 59 Lowes Way and 41 Wellman St. while the Tewksbury buildings at 1-3 Highwood Dr. have 279,000 sf in a trio of 1980s-era structures bought from Equus. That one is sandwiched almost equidistantly between Andover and Lowell, and Shahbazi says he feels all three benefit from having lower rents than found on Route 128 and also for attracting New DOUGLAS ADAMIAN Hampshire companies that aspire to be closer to metropolitan Boston. “We are seeing tenants coming from every direction, and we feel good we can capture a lot of that traffic,” he says, with Highwood able to serve companies needing ADAM MEIXNER between 2,000 and 20,000 sf and Connecter Park from 2,000 all the way up to 100,000 sf.

At Connecter Park, KS Partners has engaged Newmark Grubb as exclusive agents, with Matthew Adams taking the lead MATT KEYS along with Richard Ruggiero and Torin Taylor. The same CBRE/NE northern market team that is agent at Brickstone Square is handling Highwood Office Park, those being Jason Levendusky and Kerry Olson Hawkins.

LIDI CHEA Interestingly, four of the transactions done since 2015 commenced were brokered by the same team, the Capital Markets crew led by David J. Pergola Jr. and Brian R. Doherty who began 2015 at DTZ and then moved over last summer to CBRE/NE. They were joined by analyst Jenna J. Skaar who came over from DTZ with them, and now work with CBRE/ NE First VP Bruce Lusa on their new firm’s exclusives. In the Lowell deal, the seller was Hudson Advisors, which had owned the buildings since Nov. 2012. Middlesex Savings Bank financed KS Partners with $11.8 million to its affiliate, Connector Park Equity Partners LLC.

NORFOLK PLACE, 333 ELM ST., DEDHAM MA

85 SCHOOL ST., WATERTOWN MA

Cambridge Savings Bank was on board with the notion that the Newton and Watertown buildings bought by KS are in locations being favorably impacted by skyrocketing laborato-

“

We are big believers in the Boston market and will continue to stay very active.

”

Kambiz Shahbazi ry and office rents in Boston and Cambridge where pricing has rapidly ascended into the $80 per sf sphere for top space. That and the lack of urban inventory has developers such as Boyl-

ston Properties, Cresset Partners and the Davis Cos. repurposing flex, industrial and low-grade office product into modern space, and that is what KS intends to do at the Chapel Business Center near Newton Corner and 85 School St. and 165 Dexter Ave. in Watertown, the latter building totaling just over 20,000 sf, with the former asset first in line for an overhaul while 165 Dexter Ave. is occupied by a flag and banner company presently.

The Watertown buildings were purchases from a Jesuit religious order and school relocating to a new venue. Chapel Business Center was harvested by Fairlane Properties for $11.3 million. The client for Pergola/Doherty had held the asset since paying $6.9 million in July 2007 (see story this issue). Cambridge Saving Bank loaned $13.5 million to KS Partners, rolling both Newton and Watertown into the same continued on page 145

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instrument. KS Partners has since named Boston Realty AdvIsors exclusive leasing agent for the assets, that team comprised of principals Jeremy A. Freid, SIOR, Douglas Adamian, Adam Meixner, Senior Associate Matt Keys and Associate Lidi Chea. As Real Reporter detailed in a 2015 article on those exclusives, Shahbazi said the arrival of Adamian to BRA just prior contributed to their designation, praising the veteran broker for his inner-suburban acumen coupled with the existing BRA suburban team’s focus on the western inner suburbs for several years.

The Dedham acquisition also appealed to Cambridge Savings Bank, with the lender that is active DAVID GOODHUE throughout eastern Massachusetts loaning $5.49 million on that three-story, 48,275-sf first-class property bought from Normandy Real Estate Partners. David Goodhue, Caleb Hudak and P.J. Foster of Colliers International were named CALEB HUDAK exclusive agents for that building located on 1.6 acres close to a pair of other Dedham office buildings KS Partners already owned.

That collectively puts the package including 3 Allied Dr. (Dedham Place) and 980/990 Washington St. at PATRICIA FOSTER almost 400,000 sf of inventory in a community Shahbazi says is in good shape to capture the tenant migration from both downtown Boston—with Dedham accessible via rail—and firms fleeing from Route 128 Central hot spots of Newton, Waltham and Wellesley where rents are being achieved above $50 per sf. Dedham space can be had for roughly half that rate. “It’s a pretty big delta,” Shahbazi says of the rent discrepancy.

Looking forward, Shahbazi says he is encouraged by the robust regional economy and availability of debt to do deals and provide funds for tenant improvements and lease-up costs. Besides CSB and Middlesex Savings Bank, United Bank loaned KS Partners $23.9 million for Highwood Office Park. Over the years, KS Partners has established relationships with lenders in various sectors, including CMBS monies, but lending activity in 2015 was heav-

HIGHWOOD OFFICE PARK, TEWKSBURY MA

ily weighted towards the banking community. “We work with some great lenders, and they were right with us in 2015 and they are again this year,” Shahbazi relays, whose other lenders used in prior deals MATTHEW ADAMS includes Brookline Bank and MountainOne. Thus far in 2016, KS Partners continues to shuffle its lineup. Balancing the Highwood and 2015 acquisitions, the firm traded 19 and 21 Alpha Rd. in Chelmsford, flex/industrial RICHARD RUGGIERO buildings Calare purchased in June for $8.9 million, and 337 Turnpike Rd. in Southborough that local investor Benjamin T. Stevens bought in May for $3.45 million.

Having reached 98 percent occupancy, Dedham Place is now on the sales TORIN TAYLOR block and three prized Hub office/retail buildings in the heart of booming Downtown Crossing are also up for grabs, the retail considered especially coveted given the surge of upscale condominiums pouring into a district once virtually bereft of such product. The three adjoining buildings total 92,475 sf in 85 Devonshire St., 262 Washington St. and 4 Water St. u

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major downturns such as the 2008 crash, but Filler says overall the underlying base keeps the office market even-keeled. “We don’t have the big rises and falls in Hartford you see in Boston,” he reports, with rents and users largely unchanged during his two-plus decades on the scene. The most disruptive period in memory was the 2008 crash, he says, but Filler expressed optimism that the slide is complete. “The veteran brokers see a lot of good things happening,” he says. “It is much more positive than it has been in quite awhile.”

A powerful insurance and financial center, Hartford has an extensive list of major hightech manufacturing firms producing such complex products as aircraft engines, nuclear reactors, space suits and missile components.

Metro Hartford is home to such major insurance firms as Aetna Inc., Travelers Property Casualty Corp., MassMutual, The Hartford Financial Services Group, CIGNA, The Phoenix Companies, and The United Health Care Company. Meanwhile, the region’s manufacturing sector includes Fortune 500 corporations and large multinational organizations.

Among them are: The Barnes Group and United Technologies Corp., its divisions Hamilton Sundstrand and Pratt & Whitney, along with its subsidiary Otis Elevator. Henkel Loctite Corp.’s world headquarters and Stanley tool and hardware manufacturing facilities are also located in metro Hartford. u

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25 different lenders, a mix of agency money from Fannie Mae and Freddie Mac, CMBS sources and life companies, although overall, he reports, banks won the lion’s share of their listings. “It just seemed they were much more competitive for the types of deals we were doing,” he says, although he praises Freddie Mac for a new small loan program rolled out that Cornerstone secured for multiple customers. “It was a fair amount of business, but the banks were far more aggressive than other sources.”

Although Mount Vernon Co. was far less active than other years this decade, Cornerstone as tends to be the case arranged the majority of the needed debt for deals it did do, and in 2015 that included $4.0 million for a mixed-use building in the bustling South End where Boston Realty Advisors procured the investment firm led by Bruce A. Percelay to acquire 16-24 Union Park St. from a private group, giving Mount Vernon Co. eight apartments and two prized retail units.

“Strength of the real estate and the experience of the borrower attracted significant interest from a multitude of lenders, allowing us to deliver the best deal in the market,” Natalizio recounts.

Percelay also praises the loan that has “an aggressive fixed rate” and 30-year amortization, As to the task at hand, Percelay comments that “we look forward to upgrading this property to a standard commensurate with its location,” one he deems “the best in the entire South End.” Percelay credits Cornerstone for identifying a lender quickly once his firm pre-empted a Boston Realty

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Advisors sale with an offer the buyers apparently could not refuse, a tactic the company has used in the past when enamored by an asset. Being able to secure financing on the run is a key part of that strategy, Percelay explains, one reason Cornerstone is usually assigned the opportunity.

Mount Vernon Co. began 2015 borrowing $8.3 million through East Boston Savings Bank for its acquisition of two nine-unit apartment buildings in the teeming North End. Percelay spent $8.7 million on 155 Salem St. and 10

“

The banks were far more aggressive than other sources.

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Paul Natalizio, CEO Cornerstone Realty Capital

Wiget St. and is renovating the entire inventory, something Natalizio says “is delivering a unique opportunity to tenants in the North End,” assets he predicts will appeal to both longtime residents and a legion of young professionals who appreciate proximity to downtown Boston and the neighborhood’s old-world charm. Once again, the note was a popular target for lenders, relays Natalizio, with EBSB emerging the victor there offering the best fixed rate and another 30-year format.

Also via CRC, Belmont Savings Bank loaned Mount Vernon Co. $9.1 million for a $12.1 million purchase in winter 2015 of 10-18 Brainerd

Rd. in Allston, the same street Percelay famously transformed from an aging industrial stretch into an acclaimed cluster of environmentally friendly apartment buildings and ancillary retail known collectively as the Green District. CRC had back in the day assembled the debt needed to pursue that transformative project. Mount Vernon acquired 10-18 Brainerd Rd. from Dennis A. Dyer, the buildings in question all low-rise apartment buildings.

In other 2015 results, Micozzi Management retained CRC to refinance 72 Gardner St. in Allston around the corner from the firm’s headquarters, and Principal Life Insurance Co. was the $7.5 million debt source for that 33-unit multifamily that has 18 of the apartments the rare four-bedroom variety, plus seven two-bedroom and another seven three bedrooms, the other being a one-bedroom layout. Having worked with the borrower previously, “we were well aware of their strengths and management expertise,” Natalizio says of the company which spent $1.4 million on 72 Gardner St. back in Dec. 1993 under the moniker Montrose Inc., Nino MIcozzi its president and treasurer.

Principal delivered a 20-year loan to CRC’s client, with Natalizio citing the energetic Allston surroundings of the building that provides housing for a diverse tenant base, with renters comprising the majority of residential consumers in the area close to Packards Corner where the MBTA B Line connects to downtown Boston 15 minutes away.

A Back Bay investor secured $1.3 million on 117 Centre St. in Roxbury, a single-family property the buyer intends to renovate following its $768,000 purchase. The entity, 117 Centre LLC, is managed by Vacheh William Avanessian, Brent Andrew Berc and Charles Patrick Hayden. According to CRC, the plan is to convert the historic Colonial that dates to 1850 into a trio of three bedroom units and one four-bedroom unit in the 3,125-sf frame for a building located on a 6,625-sf parcel just off Columbus Avenue near the MBTA Roxbury Crossing station.

“The property is well-positioned and the borrower’s extensive experience in the area allowed us to secure the best financing option available,” Pagani recounted of that assignment which has a 30-year amortization.

MJ Ventures LLC and its manager Matthew Morgan took on a nine-unit building in South Boston at 202-206 H St. in June 2015, paying $1.3 million and financing the deal via CRC with $3.1 million from East Boston Savings Bank. The lender continued on page 147

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was apparently in agreement with Pagani’s view that the asset under new management “provides room for substantial growth,” leading to the aggressive financing of nearly 300 percent LTV. The oversized apartments include a trio of four-bedroom units, a single three-bedroom and five two-bedroom layouts.

The stabilized Brookline apartment market was scene of a mid-year 2015 refinancing of 208 Winthrop Rd., a 27-unit building owned by Nora LLC and its manager, Anwar Faisal, with Greystone Servicing Corp. securing that opportunity.

Constructed in 1909, the 23,200-sf property that sits on a 9,725-sf parcel off Beacon Street near Washington Square has been owned by the borrower since paying $5.25 million in Aug. 2004.

Faisal is active in the multifamily sector serving metropolitan Boston. CRC separately helped Fenno Street Realty TR obtain $3.6 million from Greystone for a Quincy apartment building at 71-75 Fenno St. Its principal is Carlyn A. Vella Donovan. Those buildings have 36 apartments.

CRC was also active outside the Bay State, do-

202-206 H ST., SOUTH BOSTON MA

ing retail loans for one client in both Maine and New Hampshire, plus helping a borrower with $2.7 million used to purchase 48 apartments in Manchester. A 71-unit portfolio in Pawtucket, RI, was refinanced to the tune of $3.9 million.

A 140-unit apartment refinancing in Methuen helped CRC cap 2015 on a high note, with $15.8 million arranged this past Decem-

ber via PNC Bank for Appleton Square Realty Trust, a hometown operation whose manager is Lawrence D. Selkovits. The community is located at 171-176 East St. and known as Appelton Square, an expanse featuring modern units, “immaculate landscaping” and a range of amenities including a cyber cafe, 24-hour fitness center and swimming pool. u

ALBANY ROAD continued from page 54

in mid-December for $23.7 million. It was 92 percent leased when traded and has an average lease expiration of six years.

Albany Road’s Scott Cloud orchestrated that deal for the buyer in which $18.2 million was borrowed from Redwood Trust, that lender providing a 10-year fixedrate note with an all-in rate LUKE COLBERT of 4.7 percent and five years of interest/only payments.

For the most part, industrial and office saw the biggest gains of inventory this past year, although a predilection for self-storage enticed Albany Road to add a trio of ConnectiGAIL HARDY cut facilities to the pile accounting for 1,197 units in Columbia, Waterbury and Windsor for a collective $8.4 million, those assets totaling over 137,000 sf, with Eastern Bank backing the purchases. The industriDENNIS O’DONNELL al activity was highlighted by a five-building, 400,000-sf portfolio sold by

2610 WYCLIFF RD., RALEIGH NC

Colliers International on behalf of Colony Realty Capital in central and eastern Massachusetts bought for $27.3 million (see story, page 12).

In order to sevice the expanding footprint, Albany Road has been on a hiring campaign, taking on five new employees and welcoming back Marta Dragos, who took on a new position after having previously worked for Albany Road in its formative days. She will oversee the company’s corporate marketing and operations efforts. Gail Hardy came aboard as investor relations manager, bringing 15 years of experience in customer relations, operations and sales, with a focus on database implementation. Investment manager Dennis O’Donnell is responsible for Albany Road’s Northeast portfolio, having

joined the company after a decade at Colony Capital where he oversaw a 6.8 million sf portfolio of industrial and office assets. Such rapid growth could certainly use accounting acumen, and that is where CPA Jeffrey Burke came in, being retained as Albany Road Controller after working at audit and tax preparation firm PKF. Rounding out the fresh talent is Investment Associate Luke Colbert, who is in the firm’s Nashville office where he is juggling financial analysis, market research, due diligence and investor relations in the Southeast. Brandeis International Business School Master’s Degree canddate Tyler Savonen came aboard in September to work on financial analysis, lease abstracting and property summations. u

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process handled by DTZ’s team now at CBRE/ NE, that of David J. Pergola, Brian R. Doherty and Jenna Skaar. Multifamily is one viable concept being considered, with the structure said to be designed well for such a use. “Everybody in the country wanted that deal,” lamented one suitor in the running for a time.

Non-profit anti-poverty agency Action for Boston Community Development reaped the rewards of the overheated bidding contest which does offer a chance to construct another 100,000 sf next door.

COLEMAN BENEDICT Key 2015 office building closings west of Boston gave Davis Cos. 365,000 at 1025 and 1075 Main St. in Waltham and a 101,000sf building in neighboring Watertown. The Waltham buildings are the former home of BayBanks whose BENJAMIN SAYLES successor Bank of America now occupies space there, with HFF negotiating that $52.5 million deal for Gramercy Property Advisors on behalf of KBS. Through a JLL exclusive, Davis paid $36.7 million for Burlington Business Center, a four-story, 177,000-sf asset adjacent to Lahey Medical Center and visible from Route 128 while still being within walking distance of dining and retail venues.

“By completing a series of upgrades,we plan to transform the property into a highly at-

ONE CABOT RD., MEDFORD MA

BURLINGTON BUSINESS CENTER, 67 SOUTH BEDFORD ST., BURLINGTON MA

tractive alternative for tenants looking to offer their employees the utmost convenience in an amenity rich environment,” Reynolds outlined after that purchase of 67 South Bedford St. from Invesco, with the cafeteria, fitness center, lobbies and other common areas all undergoing a transformation.

Eastdil Secured advised the seller and procured Davis Cos. as winning bidder of a building dating to 1984 located on 11.2 acres, with Brian Barnett, Peter Joseph, Sarah Lagosh, James McCaffrey, Molly Padien-Havens and Steffen Panzone worked on the exclusive. Margulies Perruzzi Architects was brought in to retrofit the building in partnership with in-house expertise. “We think it is a great value-add opportunity where we can take space that is a bit dark and give tenants something that is brighter and with the open

layout tenants are looking for today,” Reynolds further explains, adding, “I don’t see that trend ending.” Lahey Hospital is anchor tenant at One Burlington Business Center, sharing space with seven other groups, including Kerna Inc. and Silverlink Communications.

Davis Cos. just announced completion of a similar overhaul at One DUNCAN GILKEY Cabot Rd. in Medford, a 309,000-sf office building acquired the final week of 2014 for $53 million. The five-story building located near the Wellington MBTA station also underwent the magic Margulies Perruzzi touch on a building dating to 1989 that has overcome similar challenges.

“One Cabot Road is a strong value alternative to the Seaport and Cambridge at 35 to 50 percent lower rent,” said Duncan Gilkey, Senior Vice President at Davis Cos. in announcing the completed upgrade, adding, “Furthermore, the infrastructure at One Cabot Road, with three full building back-up generators and dual power feeds into the building, was designed to function as a 24-hour operation so tenants that value data center level power, redundancy, reliability and value will find continued on page 149

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One Cabot Road an incredible alternative.” There is about 150,000 sf available in the building, whose signage and identity was also enhanced.

“We are excited to be marketing the revitalized One Cabot Road,” says JLL Managing Director Peter Bekarian, exclusive agent for the building who calls the changes “a dramatic transformation” making the address competitive with newer buildings, starting right off with “a bright, re-energized showpiece lobby,” he says, “and then you find your way to a renovated and full-service café before experiencing the new outdoor patio. One Cabot also benefits from great public transportation, (generous) parking ratios, and the buzz PAM ADAMIAN of this hot submarket.”

Value-add is also the buzzword on the Waltham and Watertown acquisitions, with David J. Pergola/Brian R. Doherty and friends negotiating the latter trade while at DTZ in which Davis Cos. acquired BRIAN FALLON a Class B office building on an infill site close to Arsenal Street, a main thoroughfare undergoing dramatic upgrades fueled by a sea of capital and development companies. “We think it is a terrific location that is only getting better,” Davis NICHOLAS SKIADAS told Real Reporter in confirming his company’s purchase of that building, one sign of hope being rental rates of $30 per sf in a town always considered a fringe market until the opening of an anchor office park now owned and occupied by medical data giant athenahealth coupled with the recent runup in downtown and Cambridge office rents.

“I think there is great cause for optimism that the dramatic changes are going to continue,” says Davis. “We feel very positive about what is going on around us.” There is a tenant occupying the space at present, providing a measure of cash flow while possible alternatives are considered.

Up Route 20 a few miles is the two-building Main Street acquisition that took $52.5 million to secure in early October. Davis at the time told

1025 AND 1075 MAIN ST., WALTHAM MA

Real Reporter in an article unveiling the commitment that the location was one attraction, relaying that “Downtown Waltham is coming alive, and it should only continue to improve” while describing the space itself as efficient yet due for some capital infusion, a need he says Davis Cos. is schooled in addressing made even easier in buying the properties for roughly half of replacement cost. “They need a fresh face, but that is something we specialize in,” he says, pointing to in-house expert Larry F. Lenrow as a valued tool in PETER BEKARIAN those endeavors as the director of property management and operations.

Lenrow has been there since 1999, and Davis Cos. has a deep bench in other areas as well that it continued to bolster in 2015.

Brian Fallon, last seen TYLER SPRING helping O’Connor Capital Partners develop its premier luxury apartment building that last year fetched a record $207 million, is now President at TDC, responsible for leading the construction and development divisions. Pam Adamian was recruited last sum-

mer as Senior VP of Asset Management. The New Boston Fund veteran is this year marking 25 years in the business and was brought in “to apply her broad experience in maximizing value within TDC’s growing portfolio,” listings under her watch including 200 High St. in Boston’s Financial District, 830 and 850 Boylston St. in Brookline and 2067 Massachusetts Ave. in Cambridge.

“Pam’s collaborative spirit and creative approach to solving complex challenges in multiple asset classes provides great value to our growing team,” President Richard McCready said in the press release where he lauded her “terrific reputation and track record with joint venture partners.”

Yet another seasoned pro was hired in early 2016, as Nicholas (Niko) Skiadas is helping Davis Cos. on its far-reaching ventures outside New England, his background including work in the mid-Atlantic and Washington D.C. markets.

On that development, McCready raved over Skiadas having “outstanding contacts from across the nation” who “is a perfect fit for this position,” his prior stops including Colony Realty Partners most recently and also industry powerhouse Blackstone Real Estate Partners. “We are confident his investment experience will bring substantial value to our team,” McCready u declared.

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which has been rebranded The District and involves converting a 1970’s-era office campus into a vibrant amalgam featuring hotels, multifamily and retail plus multiple restaurants. Having paid $216 million in June 2013 for the 1.1 million-sf Burlington expanse, the ownership is also sponsor of the transformative Ink Block at the former Boston Herald headquarters. CRRI/NatDev did bring another piece into the fold there in 2015, scooping up a 2,520-sf commercial structure listed

by Boston Realty Advisors that delivered $2.25 milEDWARD L. MARSTEINER II lion to seller Anthony H. Pagliarulo last September.

There is a two-level commercial building constructed in 1940 on the 3,625-sf site, but observers maintain the value is development potential that allows a height of 100 feet and FAR THEODORE R. TYE of 4.0, plus being the final property on the block not controlled by the Ink Block sponsors.

Calls to CRRI/NatDev President Brian H. Kavoogian to discuss the firm’s 2015 activities and outlook going forward were not returned, but the partnership seemed to send a message it will be looking for deals, having this year launched a new $290 million fund, the largest of three undertaken over the past decade. The leadership includes Bryan J. Clancy at CRRI and Thomas M. Alperin, Edward Marsteiner, John J. O’Neil and Theodore R. Tye at National Development.

A highlight for CRRi/Nat Dev of 2015 occurred early in the year when Swedish fund Zurich Alternative Asset Management paid $27.6 million for a trio of Downtown Crossing mixeduse buildings the sellers had bought for a mere $10.6 million in April 2011 when an unfinished redevelopment project had the area derided nationally as resembling downtown Beirut, a backdrop that had many investors fleeing.

Using its local knowledge and belief in the longterm vibrancy of downtown Boston, the Newton-based investors repositioned the complex in an effort that concluded in a much sunnier state. By the time renovations were in place and the 67,000 sf was filled at 51-63 Franklin St., the project that would become the Millennium Towers next door had been revived and undertaken with a vengeance by new develop-

INK BLOCK, BOSTON MA (RENDERING)

DISTRICT, FKA NEW ENGLAND EXECUTIVE OFFICE PARK, BURLINGTON MA (RENDERING)

er Millennium Partners. The progress is already boosting values of nearby properties, especially those abutting the high-rise whose penthouse unit has famously brought $35 million.

The Colliers International Capital Markets team listing 51-63 Franklin St. included principals Scott Dragos and Doug Jacoby plus Anthony Hayes and Timothy Mulhall. They advised the seller and procured the buyer.

Other CRE professionals spoken to say any backing off some buyers this past year could simply be astute capital watching prices continue to escalate and capitalization rates in some urban deals dropping into the 3 and 4 percentile—and in a few cases even lower. While the pool of capital flowing inward has been steady, an increasing stripe of buyers are starting to consider other markets such as southern New

Hampshire, Rhode Island and Connecticut driven by a quest for precious yield. That would be a radical shift for a group like Synergy Investments, its platform almost entirely focused on Boston or abutting venues such as Cambridge and Quincy. CRRI/NatDev has also primarily concentrated on its own back yard.

“David’s formula is buy aggressive when the market is soft, and he has been as good as anyone at that,” Griffin says of the former PricewaterhouseCoopers accountant who did swimmingly buying in the darkest days of Boston’s recession and aftermath, enablng Synergy to ratchet up its platform steadily since being launched in 2003. Calls to Synergy regarding its 2015 activities were not returned, and while there may have been one or two acquisitions continued on page 151

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made that did not get noticed, the firm did seem more intent cleaning out a substantial portion of its holdings to a number of pliant buyers last year (see story this section), and the firm continued the pattern in early 2016 with a number of carryover sales, including a quartet of mid-rise Class B building in Boston purchased by Westbrook Partners.

Synergy does still have existing assets it is working on to boost value, including the Ten Post Office Square gem which is being renovated and aiming to land a ground-floor tenant with a restaurant as the main goal. Boston Private Bank & Trust Co. is headquartered in the building, a 13-story building which has kept 225 BINNEY ST., CAMBRIDGE MA the partnership of GreenOak and Synergy busy between the upgrades and a fire in the build- manner in metropolitan Boston, from grounding last year which did require the landlord to up development to core assets, Flood concurs quickly accommodate the with others that the prospects are beginning to bank operations to fix the dry up, especially on the value-add front. “It has damage that was confined become much more challenging” to land viable acquisitions, he says, although earlier this year to the basement.

Another major stake- TIAA got the nod on a Fort Point Channel portholder in metropolitan folio of office buildings held by Clarion Partners, Boston, pension fund gi- a 407,750-sf package in six buildings bought ant TIAA-CREF, made a for $224 million, a portfolio listed by HFF and its DAVID GREANEY big splash on the life sci- Capital Markets team led by Senior Managing ences front last year, paying $190 million to Director Coleman Benedict and Director BenajaAlexandria Real Estate Equities for a majority min Sayles with Analyst Patrick McAneny..

That is the other aspect of the 2015 slowstake—70 percent—of 225 Binney St., the biotech REIT’s 307,000-sf facility in the heart of down industry veterans like Griffin try to put Kendall Square. “That was the big one,” says in perspective—just because one season has TIAA-CREF DIrector of Acquisitions Sam Flood, who covers the Northeast for his firm, including New York City where his firm’s activities were concentrated in 2015, he says, the group hefty enough to be able to afford the stratospheric Gotham pricing.

Life sciences is a viable institutional play in Boston thanks to strong markets such as Longwood Medical Area and East Cambridge, says Flood. Fully leased to Biogen,the investment provides “a majority interest in a well-located Class A office asset that is 100 percent net leased to a high-quality tenant,” says Flood, “plus offers exposure to the Cambridge and life sciences office sector, “both of which have very healthy fundamentals.”

Still, while stressing “we are always looking” for deals of all TEN POST OFFICE SQUARE, BOSTON MA

fewer additions by a company does not mean the bidders have forsaken mulling opportunities; they may have found the pricing too heavy or were simply outbid, a scenario most do not feel a need to publicize when that occurs. One broker focused on Boston and Cambridge, for example, maintains that investor Dr. Gerald Chan and his missives frequently consider the professonal’s listings, but in 2015 the pace of investments for that operation did seem slower than past campaigns. The super-rich industrialist has been a dynamic force in local real estate circles since landing a pair of Harvard Square mixed-use buildings in 2012 and 2013 listed by Boston Realty Advisors.

In autumn 2015, Dr. Chan did buy a multifamily building in Somerville listed by the NAI/Hunneman team of Robert Tito Sr. and Gina Barroso.

Under the entity Sandtail LLC, the Newton-based group paid $13.3 million for a 41-unit apartment building at 119 College Ave. which had been in the same family for a half-century.

As for CRRI/NatDev, the company was back on the buy side in February 2016, paying $33.7 million for an industrial building at 975 University Ave. and adjacent land parcel in Norwood. “We definitely haven’t heard the last from them,” predicts one investment sales professional, a seemingly safe bet given past history and that $290 million fund in the wings. CCM Realty was the seller in the Norwood instance of a 270,925-sf building constructed in 1999 on 37.2 acres. .u The land parcel is 5.6 acres

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advising AMC was led by Executive VP David Douvadjian (who joined Newmark in late 2015) and Welch plus Credit Analyst Brian Gaswirth.

Colliers President Kevin Phelan heads up the firm’s Debt & Structured Finance practice.

Compared to the free-flowing financing found these days, the scope of prospective sources for 200-230 Forest St. was limited five years ago, says Welch, who praises RCG for stepping in on the gambit with acceptable terms. “It took a lender who could look beyond the dead economy and appreciate this is an incredible piece of real estate (being bought by) a developer who has an excellent track record,” Welch observes.

“And when they saw what a low basis (AMC) was getting the property for, it became very clear to them JOHN POOLE this was a deal that made sense.”

The loan provided necessary capital to upgrade the 1970’s-era campus which Zink explains he was inspired by the same elements as that understood

by RCG, with the campus MARLBOROUGH MAYOR offering bucolic scenery ARTHUR G. VIGEANT of the MetroWest and an open canvas given the amount of acreage. The developer deemed the solution would be to attract a myriad of users, including hotel, multifamily and retail on top of core office product.

The concept that was just then emerging is of a Live/Work/Play environment enabling suburban parks to replicate the critical mass and complementary uses of a typical downtown format.

“The number one issue for companies today is recruiting and retaining talent, you need to have the amenities and quality facilities to do that, and we felt we had the capacity to provide everything you would ever need right on the campus,” Zink outlines, adding, “we had a vision of what it could be, but it has performed above and beyond anything we could have imagined.”

The two major catalysts came in signing a pair of heavyweight anchors to fill over 400,000 sf of office space in Quest Diagnostics and GE Healthcare Life Sciences, pacts bringing thousands of employees to the campus. For his part, Zink praises the progress achieved to the real

THE HILTON GARDEN INN, 170 FOREST ST., MARLBOROUGH MA

GE HEALTHCARE LIFE SCIENCES HQ, FOREST STREET, MARLBOROUGH MA

estate brokers signing those firms, the Colliers debt crew which has since landed several other crucial loans, including an $87 million refinancing this spring, plus the professionals who helped Forest Park secure developers to do the hotel and multifamily components. “There were a lot of people who worked to get this done,” says Zink, also praising the administration of Marlborough Mayor Arthur G. Vigeant, whose tenure began shortly after AMC took control of the park, as well as state economic agencies.

A $1.6 million state grant was provided for infrastructure improvements opening up the hotel site.

AMC also had to win sweeping zoning changes for the campus, adjustments made in

2012 via creation of an overlay district which provided for 350 units of housing, the select-service hotel and up to 75,000 sf of retail.

“That was very instrumental—it would not have happened without the overlay,” says Zink.

Financing was key also, he concurs, and Colliers in 2013 secured $60 million in bridge financing from UBS Investments to recapitalize the RCG note and provide monies to complete the transformation to a first-class facility in the main building, that of 542,000 sf where Quest committed to 200,000 sf in a bold move from Cambridge. In yet a third debt assignment that closed in late 2014, GE Capital loaned $85 million to take out the UBS bridge debt and this

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PHOTO: DEREK SZABO

have put the number of staff transferring over at around 70.

In an interview, Griffin relays that “we didn’t miss a beat” making the shift and indeed wound up 2015 posting the busiest investment sales operation of the year, eclipsing $6 billion and handling some of New England’s most prominent exchanges among its 89 transactions (see story, page four top). They were even able to retain their offices at 225 Franklin St. as the “new” C&W, aka the old DTZ, is staying put at International Place, that office managed by Joseph Fallon and its Capital Markets Group now led by Eastdil veteran Peter Joseph.

“

When we looked at the options, we knew this was the right one.

”

Robert E. Griffin Jr. on 2015 move to Newmark

Griffin—whose crew is about to occupy the top floor of 225 Franklin St.—would not provide details about the agreement with Newmark or discuss supposedly protracted talks between the different parties prior to joining their current company, but he does stress the decision to make the move en masse was studied “long and hard” by the staff prior to the early autumn commitment.

“We really analyzed the situation carefully

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spring, the coup de grace came via the $87 million refinancing of GE Capital by Benefit Street Partners, a loan which runs for 10 years with fixed rate and interest only terms.

Welch and Associate John Poole were on that endeavor which Welch says was far better received by lenders than when AMC made its original commitment a half-decade earlier— and with good reason.

“You would not recognize the place at all,” Welch says, crediting Zink for being able to see Forest Street for the trees, as it were. “Joe has an amazing knack of stepping back and breaking deals down to their smallest elements,and that is what he was able to do (at Forest Park),”

and realized it would be best if we could all work together, and so this is how we handled it,” recounts the industry legend while adding that “this is no reflection on our former employer, who we enjoyed many successful years with, but when we looked at the options, we knew this was the right one.”

Indeed, the symmetry of the Griffin approach is what has marveled rivals for many years, especially in a business whose legacy was focused on individual achievements, and he maintains the need is even greater today as the Live/Work/ Play phenomenon increasingly melds office, residential and retail in clusters, ala the new Assembly Square Mall in Somerville that forged an entire mid-rise community on the banks of the Mystic River. That is combined with a rapidly

evolving market where real-time information is cherished, he says, praising such veteran leasing brokers as Debra Gould and David Martel for providing street-level information that can help investors in bidding on a given asset during an evolving environment. “They are as good as it gets,” Griffin says of the entire Newmark crew coming over from C&W. “You really need all the disciplines working together and interacting with Capital Markets, and I know there are a lot of people trying to copy what we do, but it not so easy to do that, certainly harder than they might think. It takes some amazing people willing to consistently pull for each other, and that is what has allowed us to accomplish so much, having everyone on u board.”

Welch reflects. “There are very few people who can do that on a regular basis like he does.”

Beyond the office leases with two top-level firms, AMC generated income via the $14.8 million sale of 23.5 acres for AvalonBay’s multifamily complex and another $2 million for the hotel site at 170 Forest St. which yielded a 160unit Hilton Garden Inn that came on line earlier this year. The Benefit Street Partners loan, Colliers relays, does not encumber the retail parcel at 2 Results Way, promising further upside.

“It will be exciting to see what happens next on campus,” says Welch, maintaining that “the very special, dynamic environment” forged by AMC “is certain to attract additional interest.”

In the meantime, AMC is hardly resting on its laurels, having earlier this year as first detailed by Real Reporter paid $13.0 million for

a large industrial building at 351 Holt Rd. in North Andover, a deal that closed in April. Mark Reardon and David Corkery of CBRE/NE were brokers on that deal, with $8.5 million in backing from Middlesex Savings Bank. AMC, whose leadership includes David Capobianco and Irene Gruber, also now has another Marlborough investment, paying $11.5 million for 450 and 500 Donald J. Lynch Blvd., a pair of flex buildings totaling 120,000 sf that are 92 percent leased.

That deal was made in partnership with Fulcrum Real Estate, a company formed two years ago by industry veterans Robert Kirschner and Richard Putprush.

Atlantic-Fulcrum Realty LLC bought the mid-1980s buildings from Nordblom Co. and its affiliate, Pondview JV Owner LLC. HarborOne financed that purchase with $8.6 million. u

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says “we intend to continue looking at whatever comes available” and explains RJK is willing to explore off-market opportunities or those investors lacking a trained construction arm might be unable to pursue.

Along Route 128 North, RJK in Jan. 2015 bought a 120,000-sf warehouse at 400 Audubon Rd. through CBRE/NE, paying $5.1 million and financing the acquisition with $6.6 million from Cambridge SavJOSEPH DOYLE ings Bank. “That is a killer location with phenomenal highway access,” Brandon Kelly says of a building constructed in 1975 on 9.7 acres at Exit 42 of Route 128 close to the junctures of Route One and 95. It is barely five minutes MATT QUINLAN from the transformative Marketplace at Lynnfield mixed-use complex which includes a large multifamily development. The residential aspect is of particular interest for RJK in its plan to create 900 self-storage units at 400 Audubon Rd. JOSEPH SCIOLLA from the structure bought fron an offshoot of Reynolds Packaging Corp.

There 40 years until moving out this month, the tenant ran “a super-clean” business as the manufacturer of protective sleeves wrapped around Reeses Peanut Butter Cups, relays Brandon Kelly. The departure will enable RJK’s retrofit of a property that has clear heights to 25 feet, the layout of which 93,000 sf is ware-

400 AUDUBON RD. WAKEFIELD MA

23 FRONTAGE RD., ANDOVER MA

house, 21,000 sf mezzanine space and the re- building at 100 Quannapowitt secured for $31 mainder an office format. “We are super excited million in a purchase from data center owner to get started,” he says. “That area is really un- Digital Realty Trust via an exclusive of JLL’s Capderserved, and it is a market we ital Markets team led then by have been wanting to get into Frank F. Petz who yielded $184 for a really long time.” per sf for their client. Managing As evidenced in the PortsDirector Jessica Hughes and Semouth asset which it acquired in nior VP Robert Borden were on 2012, RJK is an ardent self-storthat assignment as well. age owner and operator, with Supported by old friend units from New Hampshire to Cambridge Savings Bank and a Connecticut. Brandon Kelly says $22.8 million financing, Branhis firm intends to create the don Kelly insists the 168,000-sf Wakefield units smaller than avbuilding abutting Route 128 is 100Q BRANDING, erage in anticipation of particuworth every penny spent, and 100 QUANNAPOWITT PARKWAY, lar demand for that format. The the hands-on company has inWAKEFIELD MA CBRE contingent advising 400 fused more capital upgrading Audubon Rd.’s seller is comprised of principals the asset, refresihing its exterior and redoing Mark Reardon, Jake Borden, Jason Levendusky outdoor space featuring Adirondack Chairs and Bruce Lusa, their client PACTIC LLC. where denizens can enjoy views of the abutting Barely one month later, RJK was at the clos- Lake Quannapowitt, the center of downtown ing table for another Wakefield asset, this with a Wakefield on the other shore. “It looks spectacfar different profile in being the first-class office ular,” Brandon Kelly reports while offering that “To me, it is one of the nicest buildings around.” RJK also rebranded the asset to be 100Q and retained the Transwestern RBJ leasing team as exclusive agents for the property, the crew consisting ofVicki Keenan, James Lipscomb, Brian McKenzie and John Wilson.

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on sustainability as one of the few suburban LEED-rated buildings in the I-495 North corridor. Listed by the Robert E. Griffin Jr. Capital Markets team then at Cushman & Wakefield, 23 Frontage Rd. also had a solid full- building tenant to offer investors 10 years of cash flow in Morpho Detection, and Griffin (Andover) Essential Asset REIT II took the plunge to the tune of $11.5 million— VICKI KEENAN that equates to a $180 per sf price versus the $34 per sf RJK spent at the outsef, with Belmont Savings Bank along for that ride via a $4.7 million loan.

“When we acquired 23 Frontage Road, we could see its considerable JAMES LIPSCOMB potential,” Scott Kelly recounts in citing “an excellent location,” one he says possesses “possibly the best visibility in the I-495 North submarket,” enhanced even more in RJK constructing a glass atrium lobby which is “eye- catchBRIAN MCKENZIE ing to any passing car.” The linchpin came in filling the entire building, the Morpho Detection lease struck by the same Transwestern RBJ team now at 100 Quannapowitt along with principal Brian McKenzie and Associate Jared Pimm. The JOHN WILSON tenant was brought in by Joseph Doyle, Matt Quinlan and Joseph Sciolla of Cresa Boston and independent broker Scott Finegold.

Under the guidance of Acquisitions Director Rick Griffin, RJK has indeed made 2016 even more eventful, harvesting 4,000 self-storage units including a major facility in Portsmouth, NH, behind Water Country. Ten percent of those were reclaimed by the Goffstown purchase of 400 units in a property that was 80 percent leased one year after coming on line. “That is encouraging and made us feel this was a good investment,” says Brandon Kelly, so much so the firm is expanding the operation to 78,000 sf by

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adding 183 more units.

Speaking of expansion, Brandon Kelly says RJK has grown from eight people when the buying spree began to four times that amount as the firm brings in new talent to support the increased square footage, some 280,000 sf more of which came recently in a purchase of the Lexington JAKE BORDEN Corporate Center at 10 Maguire Rd. in Lexington, another JLL-listed transaction. While declaring “Normandy dd an excellent job with that asset,” Brandon Kelly says the new sponsor plans a similar upgrade as that seen at 100Q, with JASON LEVENDUSKY the outdoor piece coming in a courtyard which the four buildings on site surround. “We are going to come up with a plan that will give the tenants some realy cool, collaborative space that can (accommodate) 15 people or only two or three of them,” he relays.

The firm separately acquired 326 Ballardvale St. from Novaya Enterprises, paying $46 million for that building which the seller had only recently purchased as part of a portfolio purchase. Cambridge Savings Bank participated there as well, loaning RJK $32 million. “They are very easy to work with and understand we are not trying to push the envelope,” says Brandon Kelly, whose firm has tapped into several capital sources including life companies but

has—along with many other borrowers—taken advantage of some 200 local, regional and national banks providing the bulk of CRE funding, u especially for Middle Markets deals.

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Bistro, a United States Post Office facility and Webster Bank branch. The five-acre property also sports a gazebo and lawn area used for public events.

Boylston Properties founder William McQuillan relays that “I wish John Nelson and his team at Paragon the best of luck in the next decades of continuing Town Green as an integral part of the town of Wilton,” declaring that “I know the property is in very good hands” under that firm’s stewardship. Adds the outgoing owner, “I have so enjoyed my time in the town and in particular working with First Selectman Bill Brennan and we will miss our friends in Wilton.”

Boylston Properties is a Boston-based company active in real estate development and investments dating back more than three decades. McQuillan and principal Mark Deschenes have decades each of experience with the construction, development and management of real estate projects in metropolitan Boston and beyond, the biggest focus over the past decade on the Hub’s emerging Fenway District and on neighboring Watertown where HFF has helped support multiple endeavors leading to new development of hotels, office and retail. u

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principals being James M. Alden, Peter Carbone III, Jeffrey R. Theobald and Scott R. Tully. Prior to continued from page 57 the early 2015 deal for 120-126 Newbury St., known as home of Steinway Piano, whose family UMNV had spent almost $50 million on its propartnership Murphy Real Estate Investment Trust gram in Dec. 2015, including two other Newharvested the real estate to the tune of $14 mil- bury Street assets at 123 and 166 Newbury St. Meritage Properties must like the number lion in May 2015 and relocated their piano inventory stored there to another location. Mosakows- “43,” which is fine by Dennis Eckersley fans, as that is what the Scarsdale, NY-based ki acquired the building via B Minor LLC. investor reaped ($43.1 million) in its The action in 2015 came way before Aug. 2015 sale of 711 Atlantic Ave. to that trade, with the partnership of NoJ.P.Morgan Management, the asset a vaya Ventures and Urban Meritage conboutique brick-and-beam office retail tinuing a buying spree concentrated on building Meritage and partner Ivy RealNewbury Street in acquiring a large ofty had acquired for $26 million in May fice/retail building at 120-126 Newbury 2012. The six-story, 99,525-sf propSt. at a price tag of $54.2 million. That is on the third block of the famed retail WILLIAM MOYLAN erty is among a number of Meritage turnaround endeavors in metropolitan thoroughfare, and the all-cash purchase Boston this millennium, often involving was UMNV’s 11th since launching their Class B space in emerging locations, like, platform two years prior. Dartmouth Co. say, the Seaport where the investor once principal Sean Gildea was broker on the owned Tower Point, a factory converted assignment involving 50,000 sf that to first class office space which Meritage seller Rudin Management had owned cashed out on at a price tag of $43.4 since paying $9.3 million in Dec. 1986. million to Davis Cos. in Oct. 2013.

“We are very happy,” Urban Meritage Tower Point was harvested by Daprincipal Michael Jammen told Real Re- JESSICA DOWD porter in a breaking news story announcing the vis Cos. to Rockpoint Group in Oct. 2015 for closing of a building Jammen explained his firm $62.1 million after that firm had brought occuhad coveted for many years. A private college de- pancy above 90 percent (see related story this parting from the upper floors offers an opportu- section). That firm led by Jonathan G. Davis and nity to repurpose the building that dates to 1920, President Richard McCready was advised by the outlined Jammen, whose firm based on Newbury Griffin team while at Cushman & Wakefield; its leadership includes namesake Robert E. Griffin Street is also led by Vincent G. Norton Jr. The initiative with Novaya has produced a Jr., Edward C. Maher Jr. and Matthew E. Pullen.

Meritage, parenthetically, was seller of 18 portfolio valued at $150 million, with Novaya

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Tremont St. in October 2007 when the firm now known as Equus Capital doled out $49.5 million for the 12-story, 202,000-sf asset leased to a multitude of small- and mid-sized tenants. That property straddling the Financial District and Government Center also brought a triumphant result for Philadelphia-based Equus this past October in a $77.5 millon exchange to DLJ Real Estate Capital orchestrated by JLL and first unveiled by Real Reporter in mid-September 2015.

JLL Managing DIrector Frank F. Petz and Matthew Sherry oversaw that marketing campaign which had a host of eager bidders ultimately outdone by DLJ. The buyer financed its purchase with $59.5 milion from CIBC. JLL promoted the “front and center” infill location of a building over a century old and 18 Tremont St.’s unique U-shaped mien that breaks up efficiently for small- and mid-sized tenants. Under Equus Capital, occupancy was brought to 88 percent, providing the new owner a mix of cashflow and upside from renting in a tight downtown office market which JLL research put at only 10 percent in its latest survey. The asset had been held under a $550 million equity fund focused on value add prospects known as BPG Investment Partnership VIII and VIIIA LP formed by BPG Ltd., predecessor to Equus Capital. Christopher J. Locatell, Equus Capital Senior VP, Dispositions, worked in-house to get the trade completed.

A similar price—$77.0 million—was yielded by Beacon Capital Partners via JLL when Northwood Investors of New York City won the listing for 230 Congress St., an Art Deco buildcontinued on page 157

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ing dating to 1936 whose inner beauty comes from being wired as a data center, prompting its landlords to dub it “the storied hub of global connectivity.” Being ultra-wired was one reason credited for trading at $498 per sf on a listing handled

by Petz and Managing Director Jessica Hughes. Beacon had held 230 Congress St. since paying $49.7 million in Aug. 2013 under its BCSP 230 Congress Street ANTHONY HAYES Property LLC. Led by Alan Leventhal, Beacon Capital Partners had a busy 2015 on both sides of the aisle, paying $125 million early in the year for 160 Federal St. downtown while divesting through JLL its 745 Atlantic Ave. office building TIMOTHY MULHALL in the Leather District to Oxford Properties for $114 million while cashing out on a flex/industrial building in Billerica whose tenant is GE, with JLL on that assignment as well.

JLL was also broker when One Milk St. fetched $18.2 million—$472 per sf—from

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T H E A N N U A L R E V I E W 157 Midwood Investment & Development in May 2015, its seller being an owner/occupant, the International Institute of Boston. That group had paid $4.5 million in Sept. 1997 for the six-story, 38,500-sf building. Petz, joined by Sherry and Hughes on that listing, pointed to a series of luxury condominiums flocking into the downtown as a catalyst for higher-end retail which could increase the retail footprint of the building.

Another impressive turnaround story of 2015 could be found at the doorstep of 186 Lincoln St., its sale occurring in April when Brickman Associates paid $20.6 million to an affiliate of Quincy Mutual Life Insurance Co. advised by Morris & Morse Co. and its principals Garlan Morse Jr. and Jody N. Morse. It was an exclusive of CBRE/ NE under the leadership of principals Christopher Angelone and William Moylan, now members of the JLL Capital Markets operation, along with Jessica Dowd and John Meador, also moving to JLL since that trade. The deal’s manageable size and cash-flowing elements were aspects one observer gave in reporting prospects “came out in droves” before Gotham-based Brickman won the day at a per-sf metric of $300 for 68,525 sf. Rockland Trust Co. funded the deal providing a $15.5 million mortgage which was arranged by the CBRE/ NE structured finance team of Kyle Juszczyszyn and Taylor Shepard with Carlos Febres-Mazzei and Alex Bradley, the latter pair now at Eastdil.

Morris & Morse had held 186 Lincoln St. since paying $13.0 million in Jan. 2007. It was constructed in 1899 and renovated in 2010.

At the time of its sale in 2015, 186 Lincoln St. was 70 percent occupied by such firms as Full Contact, Greystone Solutions and Roche Diagnostics. “Morris & Morse has positioned 186 Lincoln exceptionally well to meet the demand in the marketplace,” Angelone said after the closing, adding that, “There is no question in our mind that the building will continue to flourish under Brickman’s stewarship,” a view shared by the new landlord. Brickman principal Aaron Lazovik describes it as “a well-located asset in a rapidly emerging neighLAUREN O’NEIL borhood” which has 1.3 million sf in 22 office buildings, 85 percent of it Class B product. “The property’s construction is highly amenable to building space that caters to today’s tenants and captures the momentum in the leasing market,” Lazovik said while praising Rockland Trust for a financing structure which “set up perfectly for our business plan.”

Also this past spring, ELV Associates traded Long Wharf on Boston Harbor for $34 million, that property a 77,600-sf assemblage of office and re-

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tail in two buildings. The Griffin team handled that trade to Capital Properties, with the retail practice group of Geoff Millerd and Justin Smith joining Griffin, Maher and Pullen on their listing of the Custom House Block and the Gardiner Building, home to AECOM and the Chart House Restaurant.

Colliers International principals Scott Dragos and Doug Jacoby were joined by Anthony Hayes and Timothy Mulhall on the Steinway Building sale that offered an added piece of business when the sellers sought a 1031 replacement property in order to defer capital gains.

Colliers was able to oblige JAMES L. ELCOCK that request, lining up the $7.6 million purchase of 1353 and 1365 Main St. in Waltham where Skanska USA had just signed a longterm lease with construction giant Skanska USA for all 34,175 of industrial and office space, a deal KEVIN BRAWLEY brokered by Colliers and its team of James L. Elcock, Kevin Brawley, Tim Lahey and Steve Woelfel advising the tenant with Dragos, Tim O’Brien and Matt Perry assisting the landlord.

Back in Boston’s Financial District, HFF was the TIM LAHEY broker on a $28.2 million buy of 2 Liberty Square by the Winhall Cos. from CenterSquare Investment Management Holdings of Plymouth Meeting, PA. Also known as 87 Kilby St., the building is tucked just off the critical juncture of STEVE WOELFEL Congress and State Streets near Faneuil Hall Marketplace.

An 11-story 67,700-sf Class B office building constructed in 1913 with a Beaux Arts design, the asset was listed by HFF Senior Managing Director Coleman Benedict and Director Benjamin Sayles, while Director Lauren O’Neil arranged $14.2 million in acquisition financing for the buyer, that note a 10-year, fixed-rate loan secured from SunLife Insurance Co. “CenterSquare was able to take advantage of today’s strong market while Winhall was able to take advantage of historically low interest rates and

120-126 NEWBURY ST., BOSTON MA

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acquire an asset that will perform exceptionally well in the years to come,” Sayles outlined after the trade of a property that was 82 percent occupied by tenants including Zipcar on the ground floor in addition to Humana, Arthur J. Gallagher, Copyright Clearance Center and Brill.

Founded in 1987, CenterSquare Investment Management is the real asset investment subsidiary of BNY Mellon. CenterSquare invests in industrial, office, multifamily, retail, parking and hospitality through joint venture partnerships with local operators. The Winhall Cos., founded in 1974, focuses on the long-term ownership and management of historical Boston multitenant office buildings, and the development, ownership and management of core assets in strong Boston suburban markets.

Boston Realty Advisors also orchestrated a Financial District sale this past year, that being 150 State St. which went for $2.39 million to Premier Property Solutions from BRA’s client, Natrac Equities Corp. In announcing the sale, BRA pointed to the building’s “iconic downtown location” steps from the Rose Fitzgerald Kennedy Greenway, Faneuil Hall Marketplace and Boston Harbor.

Originally built in the 19th century, the property stands out from the streetscape thanks to its pitched roof and English Tudor style exterior, boasting five floors of retail and office space.

It’s flexibility was one reason BRA had all of its practice groups on the case, including Michael d’Hemecourt of the retail division, the multifamily team and Jason S. Weissman as head of the Capital Markets operation. u

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er rail stopping at Back Bay and downtown is opening there barely five minutes walking from 530 Western Ave., a commercial building shuttered for decades that won swift backing when proposed to locals and city planners.

Prellwitz Chilinski is architect for The Icon, as 530 Western Ave. is being branded, which has a super-sensitivity to the environment similar to MVC’s award-winning Green District complex in Allston. Free spots for 132 bikes and a bike repair room are indicative of the focus that also is designed for maximum efficiency on energy and water. MVC intends to achieve a minimum of LEED Silver for the project that encompasses 128,000 sf on a 1.1-acre parcel.

Besides development, MVC since paying $17 million for a South End hospitality asset in April 2014 has doled out well over $100 million buying existing CRE in urban Boston, and 2015 was spent in a growth mode, starting out with 10 Wiget St. and 155 Salem St. in January 2015 acquired via Boston Realty Advisors representing their longtime owners. The mix of apartments and retail were secured for $6.6 million and funded with $5.25 million from East Boston Savings Bank by way of Cornerstone Realty Capital’s Paul Natalizio and Brett Pagani. Jason S. Weissman is the founding principal of BRA. The following month, MVC paid $12.1 million for 10-18 Brainerd Rd. in Allston, the same street where the Green District is located. The seller there was Dennis A. Dyer, owner of the 5,250-sf apartment building since paying $8.2 million in Aug. 2007.

In August 2015, 499 Beacon St. was had at a consideration of $4.3 million, that a nine-unit residential building, and MVC also persevered the same month pursuing a mixed-use property between Brookline Village and Coolidge Corner where NAI/Hunneman was exclusive agent. It took $7.25 million, but Percelay insists he was more than happy to expend the funds. “The location and visibility of the property are fantastic,” he says, with MVC now repositioning a 22,775-sf property that dates to 1910 and has 20 apartments plus 6,000 sf of retail in five units. “We are going to make it something that really stands out,” Percelay says.

The NAI/Hunneman brokerage team on that assignment included Robert Tito Sr. and Gina Barroso. “Bruce stepped up and he made it happen,” Tito told Real Reporter after its sale for an offer he described as “clean” and providing the certainty of closing his clients desired with all contingencies waived. Competition had come from as far away as New York City, he says,

THE EDGE, 60-66 BRAINERD RD., ALLSTON MA

THE ICON, 530 WESTERN AVE., BRIGHTON MA (RENDERING)

with over four dozen inquiries generated by the process. “It is a killer location,” Tito says of a property that was last available in 1966. “Bruce immediately understood that.”

Yet another project on the development front is in Portsmouth, NH, where Mount Vernon is joining forces with Waterstone Retail on creation of a multifamily community carved out of a land parcel abutting the latter group’s Southgate Plaza on Route One near Water Country.

The two were brought together by Cornerstone Real Estate Capital, a Lexington-based mortgage brokerage founded by Natalizio which has helped Waterstone barnstorm through northern New England this decade where over $100 million in loans has been delivered for a major retail center being constructed in Rochester, NH, as well as ventures in Seabrook, NH, and Scarborough, ME, where $19 million was delivered in 2015 on behalf of Waterstone’s new

115,000-sf retail center along Route One. In Portsmouth, Mount Vernon Co. was able to join a reputable partner on a pre-approved land sits where 94 residential units will be developed.

“It was an attractive opportunity and I think they are going to do very well there,” Natalizio says.

As far as the investment sales platform, Percelay says that while, “We are always a buyer,” he is concerned enough by rising prices and a lack of value-add inventory to be “proceeding with caution” through enhanced review deals available. “It is a time to have your guard up,” he says.”We believe the market is priced for perfection and any movement in interest rates or cap rates is going to show up very quickly and impact the value.”

On the multifamily front, Percelay says a surge of new construction and policies such as Mayor Martin J. Walsh’s edict to increase the continued on page 161

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chief for Linear who adds that the sale was an off-market transaction. “When deals are of that size, you typically don’t see them done off-market,” Cannuscio recounts. “Fifty-eight million is enormous for us, but the property sizes are right (45,000 sf and 78,000 sf), so that was a good start to the year.”

The 77,558 sf Eaglewood Shops, acquired for $34.2 million, was constructed in 2005 and is fully leased to Burtons Grill, Staples, Chipotle, Jos. A. Bank and Pier One Imports. Built in 2013, the 44,475-sf Main Street Marketplace sold for $22.4 million and is fully leased to a mix of national and local tenants, including Aspen Dental, AT&T Wireless, Chipotle, Doctors Express Urgent Care, Five Guys, GNC, Panera Bread, Party City, Pet Supplies Plus and Supercuts. The adjacent 2,075-sf property, 1036 Main St., was purchased for $850,000.

“Our goal always is to acquire a property that we can turn around, but Russ Hamlin’s portfolio was fully leased, so there wasn’t much to do. We’re just trying to refill the pipeline right now.”

So does the acquisition signal a change in philosophy for Linear? “No,” Cannuscio stresses. “We’re still the same company. Nothing has changed in the past 12 and a half years. We have the same capital partners (pension fund advisor Principal Enterprise), and the strategy is still to acquire value-add opportunities, but we buy across the whole spectrum,” conveys Cannuscio. Even in spearheading the efforts to acquire 10 properties totaling $90 million in 2015, “We are looking to do more small-scale development projects, and we buy both stabilized and value-add (assets),” he further outlines.

In addition to the Hamlin portfolio, Linear closed on a number of properties more in line with their modus operandi in 2015, including the Giroux Building, an 18,000-sf storefront retail property at 1833-1853 Massachusetts Ave. in downtown Lexington that they took down for $10.4 million from an affiliate of the GDB Corp. (managed by James Manganello). The fully leased, multi-tenanted property lists the Via Lago and Yangtze River restaurants, Eastern Bank and Dellaria Salon among its occupants.

Linear also landed the 35,000-sf 9 West Plaza at One Oak St. in Westborough (tenanted by Gold’s Gym, Fedex, and Sleepy’s) from A.W. Realty LLC for $8.0 million; and 11 First St. in Cambridge, a 3,075-sf retail property directly across from Lechmere Station on the MBTA Green Line at the gateway to DivcoWest’s master-planned NorthPoint development site. It was bought for $2.4 million from the owners of Finagle A Bagel.

Linear paid $2.1 million for a 7,335-sf,

MAIN STREET MARKETPLACE, 1030 MAIN ST., WALTHAM MA

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multi-tenanted plaza housing Atlas True Value Hardware and Rox Diner at 1869-1891 Centre St. in West Roxbury acquired from the Mary Daniels 1996 Trust. A 4,600-sf, single-story retail property in Roslindale was had for $1.6 million from Beck Realty Trust, securing an asset that has Petco’s urban store concept, Unleashed, tied up with good term on its lease. A pair of East Boston properties at 144 and 146 Maverick St. were had for $1.3 million total and Linear also acquired Blackstone Place, a 37,400-sf Rite Aid-anchored shopping center located at 727 East Ave. in Pawtucket, RI, for $9.1 million from to close out the year.

The 2015 Linear story was not strictly about acquisitions, however. Although typically a long term holder of assets, Linear traded a handful of properties as well, including 75 Newbury St. in

Danvers, a 28,850-sf retail strip center located on Route One North that was dealt to an entity managed by Peter M. Lafata for $4.1 million; and North Main Place, a multi-tenanted 2,700-sf strip center purchased by NB Plaza LLC, managed

by Paresh Patel (who owns a number of convenience-oriented retail properties) for $1.7 million.

Linear also sent a pair of aging Cambridge retail assets to Urban Spaces – 107 First St. for $7.4 million and 85 First St. for $6.2 million.

Plans were for those to be redeveloped as part of a planned mixed-use (housing, retail, office) project, according to city of Cambridge documents. Linear acquired the properties in August in 2012, paying $3.1 million for 107 and $2.5 million for 85 First St. continued on page 161

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Linear also began the New Year with a significant sale, dealing five retail condominiums containing 15,700 sf of restaurant, café, and bar spaces in the Seaport at 346-354 Congress St. for $11.5 million to Acadia Realty Trust. And the firm opened up 2016 in acquisition mode, closing two January deals, one for the 29,550sf, single-story, free standing Barnes & Noble property in Nashua, NH for $12 million, and a second for the historic, two-story Friend Block located at 49-57 Main St. in Concord, MA for $4.7 million. Originally constructed in 1892, the 11,740-square-foot site is on the National Registry of Historic Places and was purchased mostly vacant.

For all the platform-raising activities of the past 18 months, Linear President William J. Beckeman seemed especially pleased in the Nashua purchase that gives his firm four-way control of that intersection at Spit Brook Road, one he proclaims is “arguably the best retail corner in all of Nashua,” where his firm owns seven assets in a portfolio focused on Maine, Massachusetts, New Hampshire and Rhode Island that crested 80 assets purchased in the Westborough acquisition on 5.8 acres at Route 9 and Lyman Street. u

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ahead of the recovery are now rapidly cashing out on their successes, and Percelay’s firm does has put a few assets on the block, including the South End hospitality asset at 40 Berkeley St. now being listed by Boston Realty Advisors and the Green District portfolio of 283 apartments

city’s housing stock will ultimately lead to more inventory “even if the goals are achieved partly” and impact demand. “It’s simple math,” he says, making it critical to find niches in the sector such as the “middle- to lower-middle part of the market where supply is not going to be a factor.”

Since this past autumn, MVC has “bought nothing of consequence,” he says, and appears to be lining up for one of its slowest periods in that regard this decade. “Unless it is off-market or there are time constraints or unusual circumstances where you know you can make money, but the days of where that is commonplace are over,” he says.

Many of MVC’s peers who were able to get in 499 BEACON ST., BOSTON MA

that was purchased by a partnership of ASB Capital and National Development. The final of three buildings changed hands in spring 2015, with ASB/NatDev now in control of The Eco, The Edge and the Element while MVC still owns the remaining buildings developed on the site.

ASB Real Estate President and CEO Robert Bellinger said his firm’s $3.5 billion Allegiance Fund that targets core properties saw the assets as “meeting pent-up demand for luxury residential apartments in one of Boston’s most up-and-coming infill neighborhoods.”

NatDev President Thomas Alperin concurs, relaying that his firm “sees a big opportunity in The Green District given its transit-friendly location, uniquely branded environment and the continuous influx of new restaurants, retail and entertainment in the area.” u

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used less by the Allston-based firm over the past 18 months, with acquisitions slower than normal for a firm that has shelled out $500-million plus midway through the decade. Valeri says Hamilton now is absorbing much of the product acquired, at times renovating older stock and other times pursuing ground-up construction. Because they are tapping into a $50 million KeyBank line of credit to fund the development activities, Saul Ewing has not been needed as if they would should permanent financing be sought, he explains, but when that is needed, Valeri pledges that Michael will be the first lawyer engaged for the assignment. She is last on that list as well, he stresses.

“

They are all absolutely doing great and keeping very busy.

”

Sally E. Michael, Saul Ewing LLP,

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on her CRE clients

“We wouldn’t use anyone else,” Valeri says while recalling Michael and he both began working for Hamilton Co. at the same time 23 years ago while she was at Lane Altman & Owens LLP in the office of Brown’s longtime attorney, Luci Vincent. When that well-known CRE expert passed away, Michael was brought into the fold, Valeri outlines in offering traits responsible for her successful tenure. “Sally. is equitable, she is smart and she gets things done—and I haven’t found many attorneys who can say all that,” offers Valeri, adding, “We follow her wherever she goes.”

Shahbazi has expressed similar sentiment, calling Michael “a true friend and trusted advisor” who has followed his company’s activities across multiple cycles, the latest displaying a rebounding nature that has given KS Partners an enhanced presence in Boston’s inner suburbs out to Interstate 495. The momentum has continued into 2016, with KS Partners paying $29 million for the Highwood Office Park in Tewksbury from Equus Capital. “Highwood was a wonderful transaction,” Michael recounts of the three-building, 220,000-sf assemblage directly off I-495 which gives KS Partners a cluster of major office parks in the northern tier, having in 2014 bought Brickstone Office Park in Andover and last year another campus in Lowell, Connector Park.

200 SHUMAN AVE., STOUGHTON MA

“It is a very nice business relationship and a true friendship,” Michael says of Shahbazi.

As to Hamilton Co., she marvels at the company’s seamless switch to development mode that has a series of mixed-use and multifamily projects underway or on the drawing boards and expected to be in progress over the coming months. “They have been slower in the (acquisitions) part, but they have a lot of shovels in the ground, and it has been exciting to go by and see the beautiful buildings they are developing,” Michael says. And when the time comes for the takeout financing, Michael will be more than prepared, even teaching a class on permanent loans at the MIT Center for Real Estate.

Another Saul Ewing attorney tapped into the regional CRE legal scene is James H. Shulman, his clients including Albany Road Real Estate Partners and R.J. Kelly Co., both of which turned to Shulman as they launched major acquisition

initiatives from Maine to the southeastern US for Albany Road, this year hitting $500 million in assets acquired after just four years. R.J. Kelly is parlaying a family owned construction business into a vertically integrated investment machine that has been busy the past three years, kicking it off with a $50 million purchase of a first-class office building in Providence.

In 2015, R.J. Kelly spent $31 million for another high-end office building at 100 Quannapowitt Parkway in Wakefield, and thus far in 2016 has acquired a Wilmington flex building at 326 Ballardvale St. and a Route 128 office park in Lexington (see story, this section). Albany Road was the winning bidder last year on a five-building industrial portfolio in Massachusetts harvested by Colony Realty Partners via Colliers International, and also acquired self-storage in Connecticut and office product in Maine. continued on page 163

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Griffin Jr. Capital Markets team at Newmark, its principals Griffin himself plus Vice Chair Edward C. Maher Jr. and Executive Managing Director Matthew E. Pullen. The buyer in both instances was homegrown Brady Sullivan Properties, with Director of Commercial Real Estate Charles N. Panasis negotiating terms on its behalf.

The bigger of the packages includes 410 and 472 Amherst St. in Nashua, the former a first-class 68,250-sf office building completed in 1983 and its companion a flex industrial structure totaling 98,500 sf that came on line in 1982. Brady Sullivan also secured an amalgam of flex/office/warehouse at 22 Cotton Rd., that 153,700-sf asset branded the Birch Pond Business Center, which is right off Route 3 at Exit 8 minutes from downtown and the Nashua Airport. At that same exit can be found 15 Trafalgar Sq., a high-end 36,700-sf office building on 2.7 acres that commands rents cresting $18 per sf. It was constructed in 1987.

The Hudson entry is 5 Wentworth Dr., which totals 140,000 sf of industrial and office space in a building expanded by 63,000 sf in 2000.

RMR Group was Cushman & Wakefield’s client selling the assets which closed in mid-November. One is also in Nashua, that being 146150 Main St, while a second is at 2 Wall St. in Manchester and the remainder are all in Concord, Capital Plaza I and II at 57 and 81 North Main St. and Eagle Square at One Eagle Sq. In a separate transaction, C&W in mid-December harvested 32 Hampshire Rd. in Salem representing 55 Heritage (Salem) LLC on the sales side, that 95,000-sf flex industrial building yielding $5.42 million, giving C&W an aggregate $34.4 million of assets harvested in Q4.

“It was a very good year, especially at the end,” Farrelly recounted in an interview. “It was kind of quiet at the beginning but then everything really picked up and we were at right to the end.” The assets in question got plenty of interest from outside capital but they proved no match on the portfolios to the hometown in-

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Richard D. Gass, who also represents a multitude of regional CRE interests such as Equity Industrial Partners of Needham, among New England’s biggest owners of flex and industrial real estate. In 2015, EIP conquests included 200 Shuman Ave. in Stoughton, a 158,000-sf warehouse purchased from Prologis for $3.27 million and financed with $4.2 million from Brookline Bank.

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410 AMHERST ST., NASHUA NH

vestor which has been on a buying spree in the Granite State this decade. One thing that may have fueled their interest is the scarcity of CRE in Greater Manchester. “People like New Hampshire because you are only 40 minutes from Boston but those who are chasing yield can do deals that don’t have crazy low cap rates—what you get for a three or a four (percent) in Boston, up here it’s a seven or an eight.” The Catch 22: owners are reluctant to part ways with their holdings,

relays Farrelly. “People are enjoying the leasing and they are very reluctant to sell,” he says. “It’s not always easy to find things to buy,” Maybe that is also because Brady Sullivan has voraciously been scooping up all comers, famously in 2014 paying $19.7 million for 900 Elm St. to go along with 1000 Elm St. and ensure the firm has the tallest building in New Hampshire with that 20-story structure. It has since been branded Brady Sullivan Plaza. u

Joining Gass on that assignment was Saul Ewing attorney Joanne Robbins, according to Norfolk County Registry of Deeds information.

Gass did not respond to inquiries regarding EIP or other activities for his practice in 2015, and Michael also would not discuss terms of specific transactions, although she did acknowledge the booming Boston economy and solid real estate fundamentals has made for a brisk stretch of business.

“They are all absolutely doing great and keeping very busy,” she says. “It has been that way for

quite awhile, and while I do think some people feel we are nearing the peak, the interest is still really strong, and I think it will continue that way for the rest of the year.” In the end, Michael says she relies on the travails of Hamilton Co. founder Brown, now in his early nineties still at the helm where he has been for over seven decades. “Harold has been through five cycles,” she says, offering that, “he knows what they look like and he knows how to treat them, and he’ll say, it’s just a cycle, everything will be fine . . . and I am sure it will be whenever things do change.” u

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NAI/Hunneman Senior VP Lawrence Goldstein said in a Real Reporter breaking news exclusive after that closing that Hamilton Co. had done all of its due diligence up front on a complex owned by multifamily REIT AvalonBay that had paid $20.8 million in July 2011. “Hamilton couldn’t have been more professional,” recounted Goldstein, a member of the sales team which included colleagues David N. Ross, Gina Barosso and Henry Lieber (see related story, page 10.

In a recent Real Reporter interview, Valeri cited several incentives for pursuing Captain Parker Arms, including having an overall portfolio there now of some 250 units that he estimates is about 20 percent of the town’s rental stock. Many tenants are well-heeled individuals working government grants out on Route 128 and are transitory enough they do not want to acquire a home but often have children and consider Lexington to have a top-rated educational system, he reports.

“Lexington apartments are highly sought after when they come available,” Valeri says. “We felt very comfortable increasing our position there.”

LAWRENCE GOLDSTEIN In a smaller, urban transaction, Hamilton in late September paid $7.6 million for 130 Brighton Ave. a few doors down from its world headquarters at 39 Brighton Ave. The home of the Sunset Grill lounge had been owned

by Marc A. Kadish of MAK Properties since paying $1.25 million for the building in Sept. 1993. The 14,175-sf structure that was built in 1930 on an 8,675-sf parcel near the bustling corner of Harvard Avenue was renovated in 2011.

Already in control of three other buildings on the block, Hamilton Co. was making a “strategic purchase” when 130 Brighton Ave. came available, Valeri conveys, and says the commitment also signals faith in the neighborhood which during his 23 years at Hamilton Co. has “made tremendous strides” righting itself from a business district teeming with seedy nightclubs and discount retail serving a heavy college population to a higher level of storefronts including a more polished nightclub at the erstwhile home of Molly’s Bar, the scene of considerable mayhem in the 1970s and 1980s. “It’s a good time to invest in Brighton Avenue,” maintains Valeri, with the apartment project at 44-55 Brighton Avenue replacing an auto parts store and 7983 Gardner St. to be perched on a parking lot and adjacent Victorian residence that will be restored and incorporated into the project.

130 BRIGHTON AVE., ALLSTON MA

40 MALVERN ST., ALLSTON MA (RENDERING)

Hamilton Co. is doing its part to gussy up the surroundings even more, promising signficant landscaping behind the five- and six-story buildings such that Valeri remarks, “it’s going to be more like an arboretum than just landscaping” with courtyards and terraces set along an interconnected walkway.

Branded Packard’s Corner, the proposal recently got rave reviews from Allston-Brighton civic groups who can be decidedly critical of virgin projects, as proven earlier this year when a competing multifamily building in the neighborhood was shot down over issues of scale and parking. “We were really pleased with the response,” says Valeri of the two buildings. David Hacin + Associates is project architect for those buildings, plus another six-story building at 40 Malvern St. behind the Hamilton Co. offices.

The fast-track 48-unit building is slated for October occupancy despite only break-

ing ground last summer and another site at Douglass Park in the South End hopes to be underway by October where 44 units will be delivered, that also a product of Hacin + Associates. The total amount for all of the projects is around $100 million, Valeri told Real Reporter recently. While Mayor Martin Walsh’s initiative to spark housing in the city coupled with strong fundamentals is pushing similar ventures into the pipeline, Valeri says Hamilton has a couple of aspects going for its initiatives including an in-house construction group and already owning the sites being improved, with land costs a serious impediment to keeping rents in check.

“That allows us to be a low-cost provider in a high-cost environment,” says Valeri The KeyBank line of credit is also being used to finance parts of the shifting platform. “It gives us greater flexibility and saves lots of time uncontinued on page 166

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percent occupancy while the entire 63,250 sf in 19 Alpha Rd. is available for lease-up, comprising what Calare Director of Acquisitions Andrew Iglowski calls the sort of deal “that meets our risk-adjusted returns” and provides in-place cash flow off a half-dozen tenants at 21 Alpha Rd. and potential upside in an improving Interstate 495 North economy for leasing the fallow facility.

Cambridge Savings Bank backed the endeavor with $7.8 million arranged by CBRE/ NE and its structured finance team of Kyle Juszczyszyn, Chris Coutts and Lenny Pierce.

Coutts says the borrower’s “fully integrated operating platform” was among the strengths of the endeavor, as well as a track record of 17.3 million sf acquired since being founded in 2003 representing $750 million in transactions.

Calare target assets are JOHN MEADOR primarily warehouse and manufacturing plus laboratory, research and select office investments, although its baliwick is clear. “We have a 15-year track record of industrial, and in the end, that is really all that we do,” explains President Bryan C. BRUCE LUSA Blake, whose arrival two years ago signaled a shift from being the mender of distressed or mismanaged buildings to employing their vast database and market knowledge in attracting institutional investors for deals mainly between $10 million to $50 million.

“We have really built up our infrastructure over the past 24 months to be a true operator who can execute at the institutional level,” says Blake. The firm in 2015 brought Fidelity Investments alum Charles Nolfi over from New Boston Fund to serve as Director of Investor Relations and interact with capital sources from wealthy individuals to the aforementioned institutional set who prefer steady, predictable returns versus Calare’s traditional realm where it thrived during the downturn chasing assets which were in need of repair or repositioning.

The first such gambit on the stabilized platform came in the final days of 2014 in buying 20 Seyon St. in Watertown, a fully leased mixeduse building with 94,200 sf that brought $11 million in a deal negotiated by CBRE/NE and its Capital Markets team of Christopher Angelone, William Moylan, Bruce Lusa and John Meador, all now at JLL, except Lusa, still at CBRE/NE, and

480 PARAMOUNT DR., RAYNHAM MA

95 SHAWMUT RD., CANTON MA

Meador, who was actually hired by Calare..

While Calare did pour $100,000 into landscaping and parking, Blake says the single-story structure is demonstrative of the core-minded strategy in having 10-year leases to Saks Fifth Avenue and a Ty Law trampoline park. “Twenty Seyon St. is an attractive investment for Calare Properties that we believe will provide stable, long-term cash flow and a strong risk-adjusted return,” Iglowski outlined after that purchase which was fundCHARLES NOLFI ed with $7.25 million from Blue Hills Bank.

As Calare proved last summer in divesting 112 Barnum Rd. for $36 million, the firm is not afraid to monetize its work, but that is more the case for value-add endeavors, Blake says. “When we fix broken properties, we like to get in and execute and get out, but these are not those type of investments, and we are looking to do more of these going forward,” he elaborates.

The Devens transformation in union with frequent partner Hackman Capital certainly helped boost Calare’s stock when they maneuvered a laughable $4.1 million purchase in April

2012, peanuts on the dollar for the $200 million manufacturing plant custom-built in 2010 for Evergreen Solar, the high-flying energy sector darling that faded overnight, leaving in its wake a 392,000-sf white elephant that Calare/ Hackman almost as quickly turned back into a shining star, having within 60 days leased half of the space following adaptation for multiple users. A manufacturer of plastic molded parts signed up for the remainder of the building by 2013.

“That was a home run for sure,” concurs Manley, crediting the team’s in-depth analysis, market knowledge and background repositioning such facilites for pulling off the coup. “We were able to transform it into a best-in-class facility” which already was perched in “an ideal location” four miles west of I-495 and just two miles from Route 2, he recounts. Besides in-house expertise and the CBRE/NE Capital Markets campaign that produced an institutional buyer in Artemis Real Estate Partners, Manley offered a shout-out to CBRE/NE leasing whiz Robert Gibson for his role bringing 112 Barnum Rd. back to respect. Santander Bank loaned Artemis $26.5 million to facilitate that deal.

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three structures at the Campanelli Business Park in Middleborough totaling 273,000 sf had for $25.3 million and financed via a $16.5 million mortgage from Blue Hills Bank. “Each of the three buildings clearly fit into Calare’s strategy of acquiring well-located, functional industrial assets,” Iglowski remarked after that deal closed in early STEVE CLANCY September, adding, “with a combination of superior physical characteristics, strong tenant credit and long-term leases, we are confident that 16 Leona Drive, 19 Leona Drive and 139 Campanelli Drive will perform well throughout ROBERT GIBSON market cycles.”

The largest of the trio is 19 Leona Dr., a 108,000-sf warehouse featuring Class A fitout and 32-foot clear heights, while 16 Leona Dr. has 80,000 sf with 21foot clear flex/industrial space whose occupant is ROBERT MCGUIRE IDEX Health & Science.

There is 85,000 sf at 139 Campanelli Dr., another warehouse which has 26foot clear heights and is fully leased to Stop & Shop Supermarket. “Calare is a well-respected owner and operator of properties RACHEL MARKS throughout New England, and we are pleased to welcome them to Campanelli Business Park,” Campanelli principal Rob DeMarco said upon that deal’s consummation.

Stability was the watchword when Calare paid MARK REARDON $10.8 million last autumn for 95 Shawmut Rd. in Canton, an 84,000-sf flex/industrial building whose five tenants fill out the space with a remaining average lease term of 5.5 years. Attributes promoted by the buyers are clear heights to 22 feet, 18 loading docks, one-drive in door and a building depth of 140 feet that can accommodate a wide range of tenant requirements. “Our team was attract-

20 SEYON ST., WALTHAM MA

ed to the 95 Shawmut Road asset due in part to the building’s physical quality and excellent access to major highways,” Blake commented of a building near the juncture of Interstates 93 and 95.

Being empty, the purchase of a 40,000-sf flex/industrial building in Raynham might seem a bit off the stable path embraced by Calare, but there were special circumstances there which Blake says the firm felt would improve the chances of quickly filling 480 Paramount Dr., one being its relative youth at just 11 years old and in having been leased for eight years to a national tenant who never occupied the building, “preserving the building’s pristine condition,” he outlines.

CBRE/NE principal Steve Clancy was retained as exclusive leasing agent after advising the seller of 480 Paramount Dr., and sure enough, by springtime he had brought a full-building occupant to the new landlord, that firm being OMNI, an organization involved in hip and knee replacements. President and CEO Rick Randall says the building “offers a premier home for OMNI’s new headquarters, featuring state-ofthe-art systems, fixtures and distribution components,” adding his company welcomes the opportunity to consolidate operations “working with a knowledgeable ownership like Calare.”

Another 2015 highlight for the Hudson-based real estate investor came last March when CBRE/NE was honored for Top Industrial Deal of the Year by the Commercial Brokers Association of the Greater Boston Real Estate Board. The winning entry involves a full-building lease of 401,325 sf at 25 Tucker Dr. in Leominster, a facility Calare had owned since paying $11.6 million in 2012, then infusing it with $2 million in upgrades and hiring the CBRE/NE team of Clancy, Gibson and Rachel Marks to find tenants, a chore they completed in one fell

swoop when office furniture systems manufacturer AIS committed to the structure, its advisors being CBRE/NE principals Robert McGuire and Mark Reardon. “We are honored to be part of the Industrial Deal of the Year” award for the second straight year,” Blake conveyed afterward, offering that “we truly value our relationships with our tenants and our brokers.” u

HAMILTON BUSINESS continued from page 164

derwriting an asset or allowing us to be more nimble on the construction side,” Valeri explains.

The line was tapped into for the Lexington apartments deal to the tune of $20.9 million.

If a bubble does burst, Valeri and other value-add investors are anticipating it will be on the upper end of the multifamily realm, and the Hamilton Co. president says macro forces at work should further help middle-market demand, one telling factoid for him being a drop in home ownership nationally from 70 percent to 62.9 percent, its lowest point ever and a metric that equates to 1.1 million more renters for every percentage point eroded. “They haven’t been building enough inventory to keep up,” Valeri says.

Many investors who anticipate peak pricing might start pruning their portfolio, but Valeri says that is not part of the company’s DNA. “We are more acquirers and holders of real estate—it is rare we would be a seller,” he relays, and that approach has helped the firm increase its vast holdings above $2 billion. As for now, however, it appears boosting that figure will be more organic for the company versus continuing the aggressive buying campaign heretofore.

“We are absolutely, extremely cautious right now and proceeding very carefully on acquisitions,” he says. “We just feel our energies can be put to better use elsewhere.” u

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