Annual Real Estate Investment Report - Greater Boston by The Real Reporter

Annual THE REAL

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THE GREATER BOSTON REAL ESTATE INVESTMENT YEARBOOK

A TOWN IN FULL UPSIDE  3 Downtown

PIER  Review

PART-TIME Lovers 

INDUSTRIAL Strength 

BROKER Records  4

NOTHING BUT Net lease 

A sincere Thank You!

Cushman & Wakefieldâ&#x20AC;&#x2122;s Boston Capital Markets Group

would like to Thank

Our Clients For making 2014

a record setting year!

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THE ANNUAL REVIEW 3

Office Sales Crest $8.8B in 2014 B BY JOE CLEMENTS OSTON — The “Blackstone Effect” was clearly a major cause, but Blackstone Real Estate Partners’ final harvesting of its downtown and Cambridge office holdings for $2.05 billion was among many components fomenting a blistering 2014 investment sales season where $8.8 billion in office product changed hands, the lion’s share urban core assets headlined in the portfolio purchased by Canadian investor Oxford Properties Group and JPMorgan Chase of 225 Franklin St., 125 Summer St. and 60 State St. OFFICE with Oxford separately taking on 100 High St. and 125 Summer St. The package PETER JOSEPH brokered by Cushman & Wakefield and Eastdil Secured accounted for 3.24 million sf of Class A space. “It was a big deal that got attention from everywhere,” recounts Eastdil Secured principal James McCaffrey, whose assignment earned his firm and C&W 225 FRANKLIN ST., BOSTON MA Capital Markets the 2014 Investment Sale of the Year Award from the Greater Boston Real Estate Board’s Commercial Brokers Association. The scope was “historic” in nature, marking “a generational change of” the SARAH LAGOSH metro Boston landscape, says McCaffrey, who heard plenty about it while splitting time this past year between Boston and Eastdil’s London operations, a realm where US CRE is considered a desired safe haven that has solidified during the European nosedive to put Boston “at the top of the heap” with the likes of New York, San Francisco and Washington, D.C., observes McCaffrey. The Association of Foreign Investors in Real Estate supports that view, its annual survey pegging metropolitan Boston JAMES MCCAFFREY seventh in the US for overseas capital flow. (AFIRE members will get a first-hand look at the phenomenon this September at its annual convention in Boston.) continued on page 56 60 STATE ST., BOSTON MA

Fan Pier Reels in Record $1.12B B

BY JOE CLEMENTS OSTON — When it comes to commercial real estate sales, HFF’s trading of Vertex Pharmaceuticals’ headquarters at Fan Pier for developer Fallon Co. and Cornerstone blew all its competition out of the water in 2014, that $1.12 billion blockbuster deal more than $500 million above

OFFICE

the closest stand-alone office property changing hands in New England last JOSEPH F. FALLON year during an unprecedented season for such heavyweight swaps, a surge led by various Boston and Cambridge buildings which Blackstone Real Estate Partners famously parted ways with in both booming JOHN FOWLER cities (see story this page). The “Blackstone Effect” was headlined by its $2.05 billion portfolio sale of a half-dozen prime towers to Oxford Properties, among them 225 Franklin St. in Boston’s Financial District in which the 943,600-sf high-rise brought $590.0 million, making that venture with J.P. Morgan the runner-up to REIT Senior Housing Properties Trust buying the Vertex HQ at 11 Fan Pier Blvd. and 50 Northern Ave. in what one expert main-

VERTEX PHARMACEUTICALS HEADQUARTERS AT FAN PIER, BOSTON MA

tains is Boston’s first a thrill to work on this semexchange ever of a single inal transaction” involving office building cresting the “two world-class buildings billion-dollar threshold. in one of the hottest subHFF and both the markets in the country,” Newton-based buyers and Benedict conveyed on Fallon/Cornerstone princibehalf of the team that pals did not respond to included Executive inquiries from Real COLEMAN BENEDICT BENJAMIN SAYLES Managing Director John Reporter regarding the landmark result, but HFF Fowler and Director Benjamin Sayles. Senior Managing Director Coleman Benedict Completed in Dec. 2013, the towers conissued a statement after the sale congratulating tain a mix of laboratory and office space with all both sides for its successful conclusion. “It was continued on page 60

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4 THE ANNUAL REVIEW

C&W in 2014 Did 72 Deals for $7.0B+ B BY JOE CLEMENTS OSTON — In emerging once again as New England’s busiest investment sales team following a 2014 where 72 assignments were completed accounting for more than $7.0 billion in volume, Cushman & Wakefield had its share of super-sized transactions—nine of $100 million or more and 18 in excess of $50.0 million—and featured a pair of portfolio assignments each eclipsing 10 figures, including the billion BROKERS $2.05 Blackstone deal brokered in conjunction with Eastdil Secured ROBERT E. GRIFFIN JR. (see story, page 3). Save for hotels, virtually every product type was in the C&W listing mix last year, ranging from raw land sites and stand-alone parking garages to industrial, laboratory, medical, office and retail. “It is certainly among the best years we have ever had,” C&W’s US Head of Investments Robert E. Griffin Jr. tells Real Reporter in assessing the 2014 campaign EDWARD C. MAHER JR. which began with a bang via the $307 million purchase by Shorenstein of 1, 2 and 3 Center Plaza in Boston’s Government Center and a $395 million closing of One Kendall Square in Cambridge to DivcoWest traded on behalf of Related Beal and Rockwood Capital. From there, business “was steady the whole time,” says Griffin, capped off by fourth quarter closings such as 55 Summer St. in Downtown MATTHEW E. PULLEN Crossing—a $48.0 million trade by Brickman Associates to DivcoWest and Synergy Investments—and 100 CambridgePark Dr. in Cambridge’s promising Alewife District, in continued on page 66 100 HIGH ST., BOSTON MA

Independent Brokers Soared in 2014 B BY MIKE HOBAN OSTON — In a year that saw blockbuster investment sales brokered by the large national firms dominate the CRE headlines, it would be easy to overlook the multitude of small and mid-market

BROKERS

transactions that helped propel the Greater Boston transaction volume to almost $15 billion – not to GARRY HOLMES mention the brokers who executed those deals. Led by Boston Realty Advisors $265 million in commercial sales last year, independent brokers – those unaffiliated with national commercial brokerage franchises – JOHN R. PARSONS JR. accounted for hundreds of transactions ranging from properties priced at less than a million dollars into the tens of millions. And while the shops may lack the recognition factor of Boston heavyweights Avison Young, CBRE/New JASON WEISSMAN England, Colliers International, Cushman & Wakefield, Eastdil or JLL, principals of the independent firms say

978-980 WORCESTER RD., WELLESLEY MA

there are a myriad of benefits and advantages to the model.

“ ”

We have a full co-broke policy on all of our sales. JASON S. WEISSMAN Boston Realty Advisors founder

“I’ve always enjoyed being independent, and it’s just what that word means,” offered Garry Holmes, president of R.W. Holmes Realty,

one of the region’s oldest independent firms. “I don’t have any pressures in terms of how we have to do business, and we think it’s a differentiator for companies that we work with for their national and international work. We’re not forced to stay in our network, so we can partner up in any market that we go into with who we consider to have the top local knowledge of any given market.” Founded in 1976 by Robert Holmes, Garry’s father, the firm has become a mainstay for companies and landlords in the MetroWest area for nearly 40 years. Market familiarity is another factor that independent brokers cite as an advantage that continued on page 61

2014 RESULTS 38 CLOSED TRANSACTIONS VALUED AT $9.5 BILLION IN THE GREATER BOSTON REGION

A WHOLLY OWNED SUBSIDIARY OF WELLS FARGO & COMPANY Securities products offered through Wells Fargo Securities, LLC

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WE WOULD LIKE TO THANK OUR CLIENTS FOR THEIR CONTINUED TRUST AND CONFIDENCE NEW YORK • LOS ANGELES • WASHINGTON, D.C. • SAN FRANCISCO • CHICAGO • ATLANTA • BOSTON • HONG KONG • LONDON

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6 THE ANNUAL REVIEW

Debt & Equity Flow Streams On B

BY JOE CLEMENTS OSTON — Senior Managing Director Riaz A. Cassum has lots of good things to say about the HFF investment sales group’s continued growth and with plenty of ammunition given $2.7 billion of volume and brokering the region’s largest single-asset sale in 2014 (see story, page 3), yet his debt and structured finance team nearly doubled RIAZ A. CASSUM that result this past year, cresting $5.0 billion in banking servLENDING mortgage ices across the gamut of product lines, among the highlights HFF’s $500 million refinancing of International Place for the Chiofaro Co. and a $240 million permanent loan for the developers of State Street Bank Corp.’s freshly minted headquarters in Boston’s Seaport District. Also, new kid on the block Oxford Properties CARLOS FEBRES-MAZZEI received a $150 million welcome note courtesy of HFF for the Canadian pension fund’s 125 Summer St., a 22-story, 487,300-sf tower purchased as part of Blackstone Real Estate’s $2.05 billion portfolio sale of trophy office buildings. Guggenheim Commercial Real Estate was Oxford’s lender of the fixed-rate first mortgage. “It was a huge year,” Cassum acknowledges in HEATHER BROWN detailing HFF’s four-pronged stream of business in acquisition, construction, recapitalizations and refinancings. It was fueled by a growing influx of institutional and overseas capital, including Asian sources that HFF has been establishing relationships with during the past decade along with forging similar contacts in the Middle East that are also eyeing US investments. “We saw the wave coming and wanted to be prepared for it,” says Cassum, who continued on page 68 INTERNATIONAL PLACE, BOSTON MA JONATHAN SCHNEIDER

Jumbo Season for NE Lenders BY MIKE HOBAN OSTON — While 2013 was undoubtedly the year of the refi for most commercial real estate lenders, the storyline for 2014 in the Greater Boston market was driven largely by a strengthening economy

LENDING

that finally propelled investors into a more robust acquisition and repositioning mode. That trend, comGERARD NADEAU bined with a heightened level of construction activity and a slower but still strong refinancing market, sparked a feverish level of competition that has some area loan originators concerned about a softening of lendCLAUDIA PIPER ing standards. “The underlying theme for 2013 was clearly refis, but last year was a huge acquisition financing year for us,” reports Goedecke & Co. Managing Member Peter L. Goedecke. “We did just short of $1 billion total SUSHIL TULI and about $500 million of that was related to acquisitions,” he recounts,

adding, “They came in multiple flavors—unstabilized assets for people trying to do value add plans as well as stabilized assets that people were buying because there’s no income anywhere else.” According to Colliers International Research Director Mary Kelly, investment sales for Greater Boston increased 58 percent year over year to approximately $15 billion in 2014. And while some of that total included blockbuster deals involving core assets such as the $2.05 billion Blackstone/Equity Office Boston portfolio (see story, page three), more 3 POST OFFICE SQ., BOSTON MA investors became willing to venture further out on the risk spectrum. “We closed $388 million in CRE loans in 2014, had clients who were mostly buying buildings instruments evenly split between acquisition that were going to be re-positioned—in both and refinance, added $220 million in new conBoston and the suburbs—typically with lease struction financing and originated an additional rollover coming up where they would expect to $340 million for other CRE-related purposes. In the second half of last year, Rockland Trust do some (tenant improvements), capture higher rents, hold for a few years and re-sell the build- provided approximately $27.8 million in financings for higher multiples,” affirms Rockland Trust ing for Synergy Investments and DivcoWest to continued on page 72 Co. Senior Lender Gerard Nadeau. The bank

33 Arch Street | One Boston Place | 501 Boylston 40 Broad Street (shown) 99 High Street | 51 Sleeper Street

TIAA-CREF personnel, through its investment management area, provide investment advice and portfolio management services through the following entities: Teachers Advisors, Inc., TIAA-CREF Investment Management, LLC, and Teachers Insurance and Annuity Association (TIAA). C22344 ÂŠ 2015 Teachers Insurance and Annuity Association-College Retirement Equities Fund (TIAA-CREF), 730 Third Ave., New York, NY 10017

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8 THE ANNUAL REVIEW

Early Birds Got Returns in 2014 B BY JOE CLEMENTS OSTON — A Who’s Who of investors made headlines in New England commercial real estate news during 2014, but a more definitive matter would be Who Was Where in the multi-faceted recovery, with those entering early served their just desserts from sell-

INVESTORS

WILLIAM GAUSE

GREEN DISTRICT REAPS $147M PAGE 134

ing a series of enterprising turnarounds while recent arrivals anticipating further upside seemed grateful to have gotten a place at the table. Doing so did mean BRIAN KAVOOGIAN swallowing bland capitalization rates that plunged into the 3 percent range for desired morsels including lab, office, multifamily, retail—and even the thin inventory of industrial inside Route 128—prompting many cashing out to DEKE SCHULTZE feast on opportunities elsewhere in New England and the US, paths taken by homegrown stalwarts Brookwood Financial Partners, the Davis Cos. and Marcus Partners, the latter firm recently adding CRE in Connecticut,

UNICORN OFFICE PARK, WOBURN MA

northern New Jersey and Washington DC while harvesting 225 Second Ave. in Waltham for a tidy $16.3 million in 2014 and more recently dispatching 111 Speen St. in Framingham for $22.7 million via Eastdil.

“

The institutional investors are back in the suburbs in a big way, especially along Route 128.

”

BRIAN KAVOOGIAN Charles River Realty Investor principal

Listed by JLL, the Waltham sale in spring 2014 came barely 15 months after MP paid $10.4 million to secure the property for its Fund X. The latest activity is being done on behalf of

a $250 million vehicle founder Paul Marcus launched this past autumn, its inaugural purchase a pair of office buildings at 8 and 10 Wright St. in Westport CT. The buyer JLL recruited for 225 Second Ave. was none other than laboratory giant Alexandria Real Estate Equities, a suitor so exacting one observer suggests that alone demonstrates the hunch MP took in buying the aging headquarters of payroll firm ADP during an uncertain economy was a correct one, a view Paul Marcus is willing to second. “It was a tired old building and a lot of people looked at it that way, but we came up with a concept of what could be done there and (Alexandria) has pretty much taken our idea and run with and they are doing very well,” he says. “We were very pleased with the execution of that one.” Another believer in the property was continued on page 78

Recapital Idea Finds Role in CRE B BY JOE CLEMENTS OSTON — In arriving here two years ago, even Cheers denizens likely did not know the name, but “Norges Bank” has a more familiar ring these days around local watering holes—or water coolers, at

RE CAPITAL

least—ever since the sovereign wealth fund steeped in Scandinavian oil money embarked on a CRE binge FRANK PETZ now at $4.0 billion strong invested in millions of square feet of Financial District towers. And they are hardly alone as evidenced in an Australian fund this spring teaming with Principal Investors to CHRISTOPHER PHANEUF buy 49 percent of Boston’s ornate 75 State St., that a consideration valued in the $610 million range for the 796,000-sf gold-leafed high-rise. During 2014, Norges Bank Investment Management (NBIM) committed JENNIFER H. WEISS approximately 47.5 percontinued on page 82

ATLANTIC WHARF, BOSTON MA

IN V ESTM E NT SA LES Chris Angelone Executive Vice President/Partner

Bill Moylan Executive Vice President/Partner

Patrick Cavanagh Senior Vice President/Partner

Nat Heald Senior Vice President/Partner

Bruce Lusa

CBRE boasts the leading fully integrated Capital Markets platform in New England with over $2.9 billion in transactions closed in 2014.

Vice President

Jessica Dowd Vice President, Client Services

John Meador Senior Associate

William Farmer

FE ATU R E D TR A N SAC TI ON S

Financial Analyst

Lauren Czorniak Client Services Associate

OFFICE SALE & ACQUISITION FINANCING

OFFICE

Daniel Korff Client Services Associate

M U LT I - H O U S I N G Simon Butler Vice Chairman/Partner

Biria St. John Vice Chairman/Partner

John McLaughlin Vice President

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Jim Troxell Vice President, Marketing

Kevin Murphy

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Senior Financial Analyst

Trevor Regensberg Financial Analyst

Aliza Ritsko Client Services Coordinator

DEBT & STRUCTURED FINANCE Kyle Juszczyszyn

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Scott Hutchinson Vice President

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

CBRE/NE Leads Multifamily Field B SIMON J. BUTLER

BY JOE CLEMENTS OSTON — Even outpacing their nearest competitor by more than a half-billion dollars, volume was “off” this past year to $825 million for eternal multifamily brokerage leaders Simon J. Butler

BROKERS

and Biria St. John. But while not equaling the $1.1 billion traded in the prior year, CBRE/NE’s tally of 31 deals and 6,150 units were 2014 bests versus all comers, of BIRIA ST. JOHN which there were several formidable groups who did win institutional-grade listings such as AvalonBay’s hilltop residential community that traded for $108.5 million via New England’s erstwhile Apartment Realty Advisors contingent, a crew TRAVIS D’AMATO that changed flags shortly after the Danvers deal closed after being bought by Institutional Property Advisors parent Marcus & Millichap. Elsewhere, JLL was broker in the $37.7 million purRICHARD ROBINSON chase of Andover Place in

AVALONBAY DANVERS, DANVERS MA

Andover, peddled Munroe Place in Quincy Center for another $35.3 million and worked alongside Boston Realty Advisors on a joint listing of 114 new apartments in Wakefield divested on behalf of the Richmond Co. for $25.3 million. As part of a season when it negotiated $214 million in multifamily activity, HFF handled the sale of 1440 Beacon St. in Brookline to Boston developer Steve Samuels and several of his relatives and also advised Invesco in its $94 million dispatch of The Residences at Stevens

Pond in Saugus acquired by Los Angeles investor JRK Multifamily, a group that was active throughout New England in 2014. Another premier sale was negotiated by Cushman & Wakefield’s team led by Michael Byrne, that the Maxwell Green Apartments in Somerville that were purchased for $87 million last spring by GID from developer Gate Residential. The 184unit complex in four buildings was financed with $43.5 million from Prudential Insurance Co. of continued on page 84

Multifamily Lenders Dole out the Green BY MIKE HOBAN OSTON — Despite a slow start in the opening months of 2014, the year turned out to be another exceptional one for multifamily mortgage providers, even without the heated market for

MULTIFAMILY

rate-driven refinancings that dominated 2013. “The first quarter was slow, as it was across the (entire) JOHN KELLY lending landscape, but it picked up substantially, and we had our best year ever, closing over $2 billion,” conveys Hayley Suminski, mortgage banking VP for Hunt Mortgage (formerly Centerline JAMES M. MURPHY Capital Group). The trend was validated by Fannie Mae’s final numbers, as the agency closed out the year with the issuance of $28.6 billion in multifamily mortgage backed securities— funds delivered primarily through their Delegated HAYLEY SUMINSKI Underwriting and Servicing (DUS) program—with $11.4 billion of that total

FOUNTAINHEAD APARTMENTS, WESTBOROUGH MA

issued in the fourth quarter. Hunt, which also sources capital through Freddie Mac, the Federal Housing Administration

“ ”

We had our best year ever, closing $2 billion. HAYLEY SUMINSKI and CMBS, accessed the DUS program to provide a $4.0 million acquisition loan for the 72-

unit Lynn Common Apartments at 132-138 South Common St. in Lynn, and a $3.1 million Fannie Mae DUS loan for the $3.8 million acquisition of another 72-unit property, October Hills Apartments in East Hartford, CT. The deals were among the $300 million that Hunt provided in the Northeast (including New York), much of it through the Freddie Capital Markets Execution (CME) program, according to Suminski. Freddie Mac was particularly aggressive on deals in New England and the Northeast, she observes, and the agency upped its game in the fourth quarter by introducing a new small loan program for continued on page 75

Boston Realty Advisors Capital Markets Group

AT-A-GLANCE a sampling of our sales

$23,600,000

$13,250,000

The Beacon Beacon Hill · Boston, MA Multi-Family · Condo Conversion

171 Newbury Street Back Bay · Boston, MA Mixed-Use · Retail/Office

$17,200,000

$11,329,000

40 Berkeley Street South End · Boston, MA Hospitality

CVS Wellesley Wellesley, MA Retail

$11,500,000

$3,850,000

The Mount Vernon Beacon Hill · Boston, MA Multi-Family · Condo Conversion

1180 Boylston Street Chestnut Hill, MA Retail/Office · Land

$11,600,000

$1,550,000

Green Line Portfolio — Parker Hill Mission Hill · Boston, MA Multi-Family · Apartment

655 Tremont Street South End · Boston, MA Retail

$10,391,456

$6,500,000

Zero Penn Street Quincy, MA Multi-Family · Land

150 A Street Needham, MA Office · Flex

$8,819,853

$8,050,000

380 Commonwealth Avenue Back Bay · Boston, MA Multi-Family · Condo Conversion

Green Line Portfolio — Harvard/Chester Allston · Boston, MA Acquisition Loan

Over $265 MILLION in Total Sales SUBURBAN OFFICE

MULTIFAMILY

RETAIL

DIRECTOR OF CAPITAL MARKETS

JEREMY A. FREID, SIOR 617.850.9602 jfreid@bradvisors.com

CHRISTOPHER D. SOWER 617.850.9633 csower@bradvisors.com

MICHAEL A. D’HEMECOURT 617.850.9670 mdhemecourt@bradvisors.com

JASON S. WEISSMAN 617.850.9608 jweissman@bradvisors.com

ADAM T. MEIXNER 617.850.9660 ameixner@bradvisors.com

JENNIFER R. PRICE 617.850.9626 jprice@bradvisors.com

WHITNEY E. GALLIVAN 617.850.9612 wgallivan@bradvisors.com

JORDAN B. SNEIDER 617.850.9611 jsneider@bradvisors.com

BENJAMIN M. KARP 617.850.9634 bkarp@bradvisors.com

JAIME A. RUSSELL 617.850.9663 jrussell@bradvisors.com

TYLER J. GRIFFIN 617.850.9657 tgriffin@bradvisors.com

DEBT & EQUITY NICHOLAS M. HERZ 617.850.9624 nherz@bradvisors.com URBAN OFFICE CHRISTOPHER J. DONATO 617.850.9618 cdonato@bradvisors.com

745 Boylston Street | Boston, MA 02116 | (T) 617.375.7900 | (F) 617.536.9566 | BRAdvisors.com

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

Investors Give Industrial its Due B B Y J AY F I T Z G E R A L D OSTON — Until recently, Massachusetts was not considered a particularly strong market for national investors searching for good deals on warehouses, manufacturing facilities and other industrial properties.

INDUSTRIAL

After all, the state had been experiencing a CATHERINE MINNERLY decades-long decline in its industrial base, as firms moved operations and jobs to other lower-cost parts of the country or overseas. Sure, many of the remaining industrial properties were still valuable and sought after by some OVAR OSVOLD investors, particularly if facilities were built in recent years. But the industrial subsector certainly hadn’t been as brisk and vibrant as the markets for office space within the Route 128 corridor or biotech CHRISTOPHER SKEFFINGTON facilities in Cambridge. Why get too excited about buying industrial properties in a post-industrial-peak environment? That attitude has most definitely changed. Thanks to the rise of e-commerce, advanced manufacturing, biotech R&D and other market trends, the demand for quality industrial space in eastern Massachusetts is strong once again—and deals throughout 2014 made that abundantly clear. “Now, all of a sudden, we’re back,” says

A PAIR OF INDUSTRIAL BUILDINGS IN SUBURBAN BOSTON BROKERED BY TRANSWESTERN RBJ BROUGHT CLOSE TO $50 MILLION IN THEIR PURCHASE BY NEW YORK LIFE INSURANCE FROM TA ASSOCIATES REALTY, INCLUDING 55 LYMAN ST. IN NORTHBOROUGH (PICTURED) THAT FETCHED $26.0 MILLION.

Frank Petz, managing director and head of capital markets in New England for JLL. “All of a sudden the local market makes sense for investors, especially national investors.”

“

The market is going to continue to get tighter and tighter.

”

CHRISTOPHER SKEFFINGTON Transwestern RBJ Capital Markets leader

Last year, the largest deal that industrialproperty specialists almost invariably point to as a prime “we’re back” example was the sale by Prologis of its portfolio of 19 buildings totaling 1.7 million sf, nearly all at Cabot Business Park in Mansfield. Prologis, whose properties were marketed by Eastdil Secured, was expecting to get about $100 million for the package—and the global industrial REIT was not disappointed“ (see story below). The portfolio, which also included a

300,000-sf industrial building in Brockton, was ultimately purchased for $113 million by a joint team involving a unit of Prudential Financial and Spaulding & Slye Investments. The Cabot Business Park deal last year seemed to set the tone, if not the pace, for the entire industrial-property market in eastern Massachusetts. Sale-and-purchase activity was sometimes fast and furious, particularly in the last quarter, as investors sought opportunities to put their money to good use. In many cases, due-diligence reviews were handled quickly to ensure deals went through as fast as possible, industry officials agree. “People just want income-producing properties in a good market,” says Thomas Phillips, a partner and chair of the real estate group at Brown Rudnick LLP in Boston. A major challenge, though, has been a shortage of quality, modern, high-bay industrial properties in the market. The result is a very tight market for those properties—and thus solid investment opportunities, Phillips and others say. For instance, Brown Rudnick represented Calare Properties in its recent purchase of 20 continued on page 88

Eastdil Advises Prologis on $113M Trade ANSFIELD — Eastdil Secured orchestrated what appears to be New England’s largest industrial transaction of 2014 in the Q4 trade of 1.7 million sf for $113 million on behalf of client Prologis to Prudential Real Estate Investors and Spaulding & Slye Investors. Among the 19 buildings changing hands was 31 Suffolk Rd. in Mansfield, a 41-year-old facility totaling BRIAN BARNETT 91,625 sf set on 6.4 acres in the Cabot Business Park where the bulk of the buildings were located. Real Reporter first unveiled the blockbuster deal in early December in an article which none of the parties involved responded to, making details of the pact challenging to uncover, with most of the information culled from registry of deeds and assessors’ office records that did show JPMorgan Chase Bank providing a 50 percent LTV loan of $57 million for the package that had been acquired by Prologis predecessor AMB Corp., a one-time global rival taken over

31 SUFFOLK RD., MANSFIELD MA

by Prologis. The Eastdil Secured Capital Markets team negotiating the deal with Prudential/S&S includes Brian Barnett, Peter Joseph, Sarah Lagosh, James McCaffrey and Christopher Phaneuf. One intriguing result is that the various properties changed hands in multiple closings, including a Red Roof Inn at 30 Forbes Blvd. in Mansfield that fetched $3.0 million in a standalone sale. On the other end of the spectrum

was a $39.0 million consideration for Mansfield assets at 110, 290 and 375 Forbes Blvd., 21-29 Hampden Rd. 11 Norfolk St., 21 Oxford Rd., 50 Suffolk Rd. and 515 and 574 West St. There was quite a variety in that pool, as the December Real Reporter story outlined, including the tiny 6,775-sf building at 515 West St. and a 1.7acre land parcel at 21-29 Hampden Rd. The biggest structure there is 290 Forbes Blvd., a continued on page 65

THE REAL

Reporter

T H E A N N U A L R E V I E W 13

Local Expertise. Customized Financing. Commercial Real Estate Solutions. Representative Transactions from 2014 30 INNERBELT RD., SOMERVILLE MA

C&W Industrial Exclusives Yield $75M+ in Three Sales BY JOE CLEMENTS EVENS — Multifamily, office and retail transactions comprised a major book of Cushman & Wakefield’s Capital Markets activity in 2014, but the group also processed a number of hefty industrial listings as well, including three major trades collectively exceeding $75 million. The largest of INDUSTRIAL those was a $34.0 mil- SAMANTHA HALLOWELL lion result that closed in December to investors Steven E. Goodman and John N. Matteson securing nearly 750,000 sf at 18 Independence Dr. and 66 Saratoga Blvd. in the Devens Industrial Park, with C&W advising seller CrossHarbor Capital along with procuring the winning bidders. Goodman began the action last summer in snagging a South Boston industrial property from Archon Group with $16.5 million of CMBS funding deliv- J.R. MCDONALD ered by Cantor Commercial to the borrower’s firm, GFI Partners of Boston. Robert E. Griffin Jr., Edward C. Maher Jr. and Matthew E. Pullen of C&W’s Capital Markets contingent oversaw the effort on both sides of the talks regarding an 88,250-sf facility dating to 1963 that is located on 4.2 acres in one of New England’s most dynamic business districts. In another marquee metropolitan Boston sale, C&W orchestrated the continued on page 96

Calare Off to Florida, But Roots Remain NE BY JOE CLEMENTS ILFORD, CT — Calare Properties launched a new website, revised the firm’s capital strategy and made its inaugural foray into the central Florida commercial real estate market in 2014, but the Massachusetts-based firm also showed its continued commitment to New England via a series of purchases focused on its chief target—industrial facilities—especially those offering WILLIAM L. MANLEY a value-add component. Led by founder/CEO William L. Manley and President Bryan C. Blake, Calare was busy right until the end of the 2014 campaign, scooping up 20 Seyon St. in Watertown in a December deal after earlier acquiring a trio of Framingham industrial buildings followed by its cross-border acquisition in Milford of 40 Pepe’s Farm Rd., a 200,000-sf facility. Manley told Real Reporter his firm was attracted BRYAN C. BLAKE by limited inventory in Fairfield County in buying the latter asset, plus close proximity to Interstate 95 and the building’s “bones” that provide a quality asset dating to 1981 with such aspects as clear heights to 30 feet and an efficient layout. A new roof is being added along with fresh paint to the exterior and incorporation of windows into the office component. Forty Pepe’s Farm Rd. was 50 percent leased at the continued on page 65

Office

Multi-Family

$29,850,000

$6,800,000

Refinance

Acquisition

Commercial Portfolio

Retail

$25,000,000

$4,400,000

Refinance

Diversified Funding

Condominiums

Multi-Family

$12,000,000

$6,400,000

Acquisition and Development

Acquisition

Office

Multi-Family

$35,000,000

$6,900,000

Acquisition

BrooklineBank.com

For more information contact: Robert Brown Darryl Fess rbrown@brkl.com dfess@brkl.com 617-927-7977 617-927-7971 Henri Soucy Wes Blair hsoucy@brkl.com wblair@brkl.com 617-927-7972 617-927-7974

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Member FDIC / Member DIF

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THE REAL

Reporter

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

Investors Shopping Hard for Retail B BY MIKE HOBAN OSTON — With capital markets steeped in cash, the cost of debt historically low and fortitudinous owners finally ready to bring assets to market, 2014 resulted in a banner year for CRE retail sales in Greater Boston despite a continued downward com-

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CHRISTOPHER ANGELONE

C&W BROKERS $1.2B DEMOULAS RE SALE PAGE 14

pression on capitalization rates. According to Real Capital Analytics (RCA), metropolitan Boston saw $1.38 billion in malls and strip centers trade hands WILLIAM MOYLAN last year, a 16 percent YOY increase versus 2013. The voracious appetite for retail was not restricted to the Northeast and urban hotspots, but spread nationwide as a record-setting $82.6 billion in such sales were transacted, according GEOFF MILLERD to RCA, a figure topping the previous high of $81.4 billion set in 2007. “You had a convergence of good things happening: A low cap rate environment, an abun-

WORCESTER CROSSING, WORCESTER MA

dance of capital that wants to be invested specifically in real estate here in Boston, the perception of future growth in our market and the perception

“

Institutional investors have had to redefine what their geography is because there is just not enough (retail) product.

”

GEOFF MILLERD C&W Executive Director

that Boston is still undervalued relative to other gateway cities,” observes CBRE/New England

principal and retail expert Christopher Angelone in explaining the robust season. “People who had acquired assets at a different point in the real estate cycle saw it was a compelling time to bring those assets to market for sale.” And they did so in droves. RCA’s 2014 Retail Market Review reveals that transactions for 55 strip centers totaling $729 million were recorded in Greater Boston in 2014, double the aggregate pricing for the previous year, and there were 71 “Mall and Other” trades completed for an additional $655 million. The buyer profile for core markets and beyond has been consistent over the past two years with institutions (pension fund money), public REITS and the private sector who are now extending their reach past Interstate 495 in search of available product now that urban opportunities are thinning from the activity. continued on page 91

$270M HFF Sale Rocks Retail B BY MIKE HOBAN OSTON — Brokering one of the largest portfolio sales of non-mall shopping centers in Massachusetts history might seem an imposing endeavor, but for HFF Senior Managing Director James

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M. Koury, the assignment was old hat. Koury, who along with Executive Managing Director John JAMES M. KOURY Fowler negotiated the $270 million deal for the 24-property, 1.4-million-sf retail portfolio located primarily in Greater Boston to Kimco, had been the broker when the collection of strip centers was sold nearly two decades prior to GPB Holdings, a division of Boston-based venture capital firm Bollard Group. “In 1996, I was retained by Stop & Shop while at Spaulding & Slye to sell 1.6 million square feet of their excess retail that they no longer occupied,” says Koury. There were 27 properties ranging from smaller neighborhood centers to larger Walmart-anchored property types, and GBP Properties purchased the portfolio for approximately $96 million. They managed it for 17 years, selling off three of the assets before bringing it to market in early 2013. HFF won the assignment, in part because the firm had an existing relationship with GPB, assisting on a pair of loans on the portfolio in

ABINGTON LOWE’S, ABINGTON MA

2011. “So in 2013 we were selling the properties with loan balances of $122 million that were fairly new,” Koury recalls. “We marketed the properties without a price and received some strong interest, narrowed it down to about six bidders, the mix including a private REIT, two public ones and two high net worth investors. It came down to some fierce competition at the end and Kimco ended up winning the deal at a cap rate of about 6 percent.” The portfolio was put under agreement in September 2013, but due to the length of time required to assume the loans, the deal closed in May. Twenty-one of the properties are in Massachusetts, including the 62,500-sf 727 Memorial Dr. in Cambridge (fully leased to

Micro Center, Sleepy’s, Starbucks and Trader Joe’s); 15 Washington St. in Brighton, home to Citizen’s Bank and Whole Foods; a 152,000-sf plaza in Westborough featuring Dollar Tree, Ocean State Job Lot and Planet Fitness; and 425 Washington St. in Woburn, a 199,400-sf center anchored by a Kohl’s and bolstered by Mattress Giant and Dollar Tree. While most of the properties are strip centers, a half-dozen are grocery anchored shopping centers, and a handful of single-tenant properties are also in the mix. Other locations include Abington, Chatham, Dennisport, Everett, Fall River, Falmouth, Framingham, Malden, Quincy, Revere, Salem, Springfield, Wakefield, Waltham, continued on page 105

2014 Acquisitions Real Estate Investment and Management

BRICKSTONE SQUARE ANDOVER, MA

DEDHAM PLACE DEDHAM, MA

1,006,657 square feet Office Building

160,910 square feet Office Building

CONNECTOR PARK LOWELL, MA

141 PORTLAND ST. BOSTON, MA

199,783 square feet Office Building

21,914 square feet Mixed-Use Building

KS Partnersâ&#x20AC;&#x2122; approach is to utilize the vast real estate experience of its management team in developing, operating, and maintaining properties while leveraging local knowledge and relationships, to help create value in all of their investments.

Getting deals done. 130 New Boston Street Suite 303 Woburn, MA 978.560.0560

150 East 58th Street Suite 2000 New York, NY 212.355.7474

www.kspartnersllc.com

200 Brickstone Square Suite G09 Andover, MA 978.475.4000

84 Brook Street Rocky Hill CT 860.436.5125

THE REAL

Reporter

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

Marcus & Millichap Team Trades $640M BY MIKE HOBAN OSTON — As Top 40 radio deejays from the 1960s used to say, “The hits just keep on coming” for Marcus & Millichap Vice Presidents Robert Horvath and Todd Tremblay. The Bostonbased team followed up a record year in 2013 with

RETAIL

an even more spectacular showing in 2014, closing $640 million in single-tenROBERT HORVATH ant net lease transactions spread across 18 states— nearly $150 million occurring in New England via 23 separate exchanges, with over 100 completed nationally. Combined with the then-record 2013 when $474 million was TODD TREMBLAY recorded puts the team above $1.0 billion during the prior two years. “It was just such a robust marketplace, and single tenant net lease in retail continued to be an asset class that worked well last year,” Horvath relays to Real Reporter. Horvath cites a deep mix of transactional velocity, capital flows from a myriad of clients, 1031 exchanges, and institutional capital, “and I see it being the same this year because of where the interest rates are. We really haven’t seen a slowdown in 2015 and I think we’re going to be even busier

THE CHELMSFORD CVS AT 16 BOSTON RD. BROUGHT THE SELLER $4.34 MILLION IN AN EARLY 2014 EXCHANGE BROKERED VIA THE MARCUS & MILLICHAP TEAM OF ROBERT HORVATH AND TODD TREMBLAY.

this year.” New England deals were dominated by pharmacy chains CVS and Walgreens along with a handful of banks and even a few IHOP franchise swaps. Horvath estimates the Boston contingent did approximately 40 deals for drug stores in 2014, with capitalization rates averaging about 5.5 percent for the assets. The largest New England-based deal for the pair was a quartet of drugstores—two CVS and two Walgreens—that traded for $38.6 million from a private New England-based real estate family trust led by Christopher Cabot of Beverly Farms to a private family represented by Sidney Insoft

of Wayland to complete a 1031 exchange. The drugstore portfolio was located in Massachusetts, New Hampshire and Florida, and included a 15,000-sf CVS in Foxborough for $10.5 million; a 14,325-sf Walgreens in Worcester for $9.4 million; a 13,600-sf Walgreens in Merrimack, NH that brought $7.4 million; and a 14,600-sf CVS in Clearwater, FL for $11.4 million. Horvath describes the assets as “well-located within their respective marketplaces” with all tethered to 25-year leases with numerous years remaining, plus options for renewal. continued on page 77

Among $954,000,000 in 82 Debt & Equity Transactions Closed in 2014 $24,500,000

$51,100,000

$11,120,000

First Mortgage Loan 200 River’s Edge Drive Medford, Massachusetts

First Mortgage Loan Student Housing Portfolio Durham, NH and Orono, ME

First Mortgage & Mezzanine Loans 10 New Road Providence, Rhode Island

115,000 Sq.Ft. Office Property

1,178 Beds

339,952 Sq.Ft. Industrial Property

The undersigned arranged the financing with

Sentinel Asset Management, Inc.

$22,000,000

Cantor Commercial Real Estate Lending L.P.

Redwood Commercial Mortgage Corporation

$31,700,000

$6,775,000

First Mortgage Loan

Monadnock Marketplace Keene, New Hampshire

Lowe’s Dowling Village North Smithfield, Rhode Island

300 Apollo Drive Chelmsford, Massachusetts

200,790 Sq.Ft. Shopping Center

135,000 Sq.Ft. Shopping Center

293,000 Sq.Ft. Office Property

The undersigned arranged the financing with

People’s United Bank

Eastern Bank

$7,000,000

$8,800,000

The undersigned arranged the financing with

AIG Asset Management (U.S.), LLC

$8,900,000

First Mortgage Loan

Construction Loan

First Mortgage Loan

The Marketplace St. John, U.S. Virgin Islands

Parkside on Adams Roslindale, Massachusetts

Westgate Plaza Albany, New York

53,570 Sq.Ft. Shopping Center

43 Unit Apartment Project

122,000 Sq.Ft. Shopping Center

The undersigned arranged the financing with

J.P. Morgan Chase Bank, NA

$20,650,000

Assurant Real Estate

Rockland Trust

$5,400,000

$29,500,000

First Mortgage Loan

Scott, Sayes & Commercial Wharves Newport, Rhode Island

Drive In Self Storage Portfolio Various, MA and CT

Legacy Farms Hopkinton, Massachusetts

Newport Yachting Center

829 Self Storage Units

730 Acres

The undersigned arranged the financing with

Bank RI & Bank Newport

East Boston Savings Bank

Goedecke & Co.,

10 High Street Boston, MA 02110

www.goedeckeco.com

Northern Bank & Trust

LLC

1720 Post Road East Westport, CT 06880

THE REAL

Reporter

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

207 NEWBURY ST., BOSTON MA

$100M+ Spent by UMNV In Late 2014, Early 2015 BY MIKE HOBAN OSTON — Novaya Ventures and Urban Meritage followed up a fruitful initial year as a CRE partnership with another prolific Newbury Street shopping spree in 2014, adding five assets along New England’s toniest retail boulevard and also buying the Hotel Commonwealth’s retail component in abutting Kenmore Square, a $38.5 million consideration separate from the partnership’s $200 million fund which has taken the Back Bay RETAIL by storm since its inaugural purchase in April 2013 of 79 Newbury St. for $10.0 million total followed a month later by 205 Newbury St., reeled in for an $8.06 million considerJAMES ALDEN ation. Kenmore Square might seem to be incongruent from their previous platform, but Urban Meritage cofounder Michael T. Jammen insists otherwise. “We bought a lot of vacancy” in their Newbury Street conquests, adding, “the vast majority of our retail is either vacant or is coming up vacant,” a strategy in line with those who anticipate an improving market will yield higher rents than those in place, while PETER CARBONE observers spoken to opine the savvy firm whose principals have cut their teeth repositioning Newbury Street buildings ahead of the curve are just the ones to bolster the Kenmore Hotel retail component, deemed “underutilized” by one observer considering the hotel component’s wild success that led to its purchase in 2013 for $79 million by Sage Hospitality, with the buyer then spinning off the retail structured as a commercial condominium in a JEFFREY THEOBALD deal negotiated by Eastdil Secured. UMNV began 2014 in a familiar place—on Newbury Street where Urban Meritage is located and from which it provides leasing services to the Jamestown holdings—with the partnership securing a quartet of acquisitions between Exeter and Fairfield Streets. In a deal seven years in the making, UMNV was able to pry the landmark Daisy Buchanan’s Restaurant site at 240A Newbury St. SCOTT TULLY and the adjoining 41 Fairfield St. from longtime restaurateur Joseph Cimino for a combined $14.1 million to begin Q2 of 2014. Jammen and Urban Meritage principal Vincent G. Norton, along with current Novaya CIO Peter Carbone III, first made overtures on the asset while assembling the “Newbury Line” portfolio marketed by Eastdil Secured and purchased by Jamestown for $226 million in 2011, a globally recognized deal the Eastdil Capital Market’s unit peddled on behalf of Taurus, the Boston-based investment firm where Carbone handled the Newbury Line agreement in-house three years ago before launching UMNV Novaya Ventures a year later with fellow industry veterans James M. Alden, Jeffrey R. Theobald and Scott R. Tully. The Daisy Buchanan transfer was followed up with a May purchase of 211 Newbury St. from private party Stuart Roseman for $2.06 million, continued on page 97

Thank You For A Successful 2014 $7.6 Billion of Boston Transaction Volume

VERTEX HEADQUARTERS

BOSTON RETAIL PORTFOLIO

INTERNATIONAL PLACE

DEDHAM PLACE

DDR GROCER-ANCHORED RETAIL PORTFOLIO

1,132,170 SF Office Investment Sale Boston, MA

1,434,824 SF Retail Investment Sale Various

1,830,696 SF Office Permanent Financing Boston, MA

160,862 SF Office Investment Sale Dedham, MA

1,478,259 SF Retail Investment Sale Various

1440 BEACON STREET

CROSS POINT

BARRY’S CORNER

30 DALTON

RESIDENCES AT STEVENS POND

136 Multi-family Units Investment Sale/Permanent Financing Brookline, MA

1,241,294 SF Office Permanent Financing Lowell, MA

229,906 SF Mixed Use Construction Permanent Financing Allston, MA

250 Multi-family Units Construction Loan Boston, MA

326 Multi-family Units Investment Sale Saugus, MA

BRICKSTONE SQUARE

ONE CHANNEL CENTER

BELVEDERE/DALTON

SCHNEIDER ELECTRIC

1000 WASHINGTON STREET

1,035,136 SF Office Investment Sale Andover, MA

501,650 SF Office Permanent Financing Boston, MA

Multifamily Development Investment Sale Boston, MA

235,943 SF Office Investment Sale Andover, MA

242,177 SF Office Joint Venture Equity Boston, MA

100 NORTHERN AVENUE

125 SUMMER STREET

PORTER SQUARE GALLERIA

300 GEORGE & 100 COLLEGE

200 CAMBRIDGEPARK DRIVE

377,404 SF Office Construction Financing Boston, MA

464,000 SF Office Fixed-Rate Financing Boston, MA

56,500 SF Urban Retail Trophy Investment Sale Cambridge, MA

1,027,000 SF Office Investment Sale New Haven, CT

221,676 SF Healthcare Permanent Financing Cambridge, MA

265 FRANKLIN STREET

130 LIZOTTE DRIVE

1900 CROWN COLONY DRIVE

27 DRYDOCK AVENUE

ONE KENDALL SQUARESOUTH OF BINNEY

350,569 SF Office Fixed-Rate Financing Boston, MA

100,000 SF Office Fixed-Rate Financing Marlborough, MA

128,682 SF Office Joint Venture Equity Quincy, MA

281,060 SF Office Fixed-Rate Financing Boston, MA

241,457 Mixed-Use Permanent Financing Cambridge, MA

100 CROSBY DRIVE

LINEAR RETAIL PORTFOLIO

BURBANK MARRIOT

108 MYRTLE STREET

SEAPORT ALOFT AND ELEMENT HOTELS

261,961 SF Office Joint Venture Equity Bedford, MA

224,001 SF Retail Permanent Financing Various

488 Hotel Rooms Investment Sale Los Angeles, CA

171,957 SF Office Floating-Rate Financing Quincy, MA

510 Hotel Suites Construction Financing Boston, MA

THE REAL

Reporter

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

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210 GROVE ST., FRANKLIN MA

Grossman Cos. Buys More, But Less is 2015 Approach BY JOE CLEMENTS UINCY â&#x20AC;&#x201D; The Grossman Cos. provided a measure of variety in its CRE activities this past year, increasing holdings by 500,000 sf even as select assets were put up for sale. Highlights ranged from the rapid-fire purchase of 45 residential properties in East Boston, an Allston apartment building groundbreaking and snagging a mix of office and retail in Connecticut while reaping $23 million from the trade of an urban self-storage facility. â&#x20AC;&#x153;We did exactly what we said we were going to doâ&#x20AC;&#x201D;broaden our reach and look at many different product types and risk profiles and see what might make sense for us to put on the market and we were able to accomplish our goals in every way,â&#x20AC;? Co-President David B. Grossman says in recapping 2014 during which eight investments were consummated (the East Boston residential buys considered one program). â&#x20AC;&#x153;We are very excited about the progress we made DAVID B. GROSSMAN and what we were able to add to our portfolio.â&#x20AC;? The firm also took steps to accrete income from existing assets, putting an industrial property in eastern Connecticut on the block through DTZ as well as a Rhode Island shopping center bought in late 2012. Boston Realty Advisors retail ace Michael dâ&#x20AC;&#x2122;Hemecourt has been hired for the Ocean State exclusive, that being 1400 Bald Hill Rd. in Warwick. Back in East Boston, the firm reaped a substantial gain selling the 1,097-unit self-storage facility at JACOB M. GROSSMAN 150 McClellan Highway to CubeSmart for $23.1 million in October after paying just $2.92 million in March 2003 (see story, page 22). The eclectic mix of choices has extended into 2015 where Grossman Cos. picked up a self-storage facility in Bostonâ&#x20AC;&#x2122;s Roslindale neighborhood, with David Grossman expressing delight in a March Real Reporter article after finalizing its $8.8 million acquisition of the 366-unit property, securing a LOUIS J. GROSSMAN cash-flowing complex on a 1.3-acre urban site the buyers predict could someday foment a larger project. The group had been courting its owner for some time and finally struck a deal this winter with James C. Dow and Christina M. Dow of Northeastern Realty Trust, whose family ownership dated to the 1970s (see related story this publication). Grossman Cos. has a variety of investment platforms, including its â&#x20AC;&#x153;Main Streetsâ&#x20AC;? tranch that covets RICHARD MCKINNON boutique CRE in established urban markets such as a Arlington, Brookline or Wellesley, and in 2014, the opportunities cropped up in Connecticut where Grossman has forged ties with a local partner, Summit Development, to invest in various ventures and used Main Streets to nail down a 12,700-sf office building and in Southport and Westport retail, each asset reliant on being adjacent to train stations connecting to New York City. The Class B Southport building offers ample parking on its 26,575-sf parcel and is within walking distance of affluent Southport Village and the Southport Metro North train station as does the 6,000-sf Westport retail asset at 60 Charles St. bought for $2.7 million in partnership with Summit (see related story, Connecticut section). The sole broker in the Southport deal was Vidal/Wettenstein principal Robert D. Lewis. A 2014 venture dripping with entrepreneurship resulted in the purcontinued on page 104

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THE REAL

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

Investors Moved by Self-Storage I B Y J AY F I T Z G E R A L D n recent years, the self-storage industry has emerged as a highly competitive and surprisingly lucrative subsector within commercial real estate. And that was quite evident last year and through the first quarter of 2015, as

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both large and mediumsized investors bought, sold, converted and develBRANDON KELLY oped a slew of storage properties in the Greater Boston and eastern New England areas. In 2014, the biggest deal was the Grossman Cos.’s $23 million sale last fall of 150 William F. McClellan Highway on SCOTT KELLY Route 1A in East Boston to CubeSmart LP, a publicly traded Pennsylvania company that has been snapping up prime self-storage facilities across the country. It was a sweet deal for Grossman Cos., which bought an aging industrial RICHARD J. KELLY building last decade for $2.9 million and proceeded to convert it into a first-class self-storage space with about 1,100

150 MCCLELLAN HWY., EAST BOSTON MA

units—just the type of property large investors like CubeSmart have been hunting for in recent years. The East Boston facility was operated under the Extra Space Storage brand for Grossman Cos.; JLL brokered the recent transaction through its Boston Capital Markets group with assistance from the firm’s National Self-Storage team and brokers Steve Mellon and Brian Somoza. “It was a great investment for us,” says David Grossman, co-president of Grossman Cos., a Quincy-based commercial real estate firm. Indeed, the East Boston deal, which was the Grossman Cos.’s first major foray into self-storage, turned out so well that the Quincy firm also

led by Co-President Jacob M. Grossman and Chairman Louis J. Grossman is now pursuing other self-storage investments. In early 2015, it spent $8.8 million to buy a 365-unit self-storage facility at 44 Lochdale Rd. in Roslindale. “We’d love to buy more,” says David Grossman. But there is just one problem: There is not enough supply to meet growing investor demand. Across the US, there are about 51,000 storage facilities of all shapes and sizes. Massachusetts has about 620 storage facilities, followed by 370 in Connecticut, 250 in New Hampshire and 182 in Maine, according to industry experts. continued on page 95

RECENT NORTHMARQ TRANSACTIONS

$58,000,000 73 Tremont Street SIZE: 303,000

SF CITY: BOSTON, MA LENDER: LIFE COMPANY

$20,500,000

$9,900,000

Village Green Development

Class “A” Industrial Warehouse

SIZE: 144

UNITS CITY: LITTLETON, MA LENDER: NATIONAL BANK

SIZE: 160,000

CITY: PEABODY,

LENDER: LIFE

COMPANY

35 Offices Coast-to-Coast

northmarq.com

NEW ENGLAND REGIONAL OFFICE | 617.728.9522 James Murphy

Joseph Hegenbart

Edward Riekstins

John Sullivan

Doug Nickerson

Matt Marshall

Ryan Demadis

Michael Chase

Stacie Yomtov

Katie Pontes

2014 SNAPSHOT

283-285 Newbury Street Suburban Flex/Office Portfolio

5 Building Portfolio of Flex/Office Buildings (382,320 SF) Investment Sale Chelmsford, Acton, Southborough, MA

9,487 SF Mixed-Use (Retail/Office) Building Investment Sale Boston, MA

Suburban Office Portfolio

11 Centennial Drive

118 Milk Street (22 Batterymarch)

The Millbrook Apartments

44 School Street

381 Congress Street

Waterfront Square E&F

110 Shawmut Road

3 Building Portfolio of Office Buildings (257,074 SF) Investment Sale Westborough, Braintree, Rockland, MA

217,600 SF Industrial Building Permanent Financing Peabody, MA

34,914 SF Class B Office Building Investment Sale Boston, MA

100 Multi-housing Units Construction Financing Somerville, MA

58,921 SF Class B Office Building Investment Sale Boston, MA

44 Multi-housing Units Permanent Financing Boston, MA

230-Unit Multifamily Development Investment Sale Revere, MA

Let Us Be Your Investment Guide.

70,350 SF Industrial

Investment Sale and Financing Canton, MA

David N. Ross

Robert Tito

Andrew Kaeyer

Carl Christie

Lawrence Goldstein

Andrew Ravech

Gina Barroso

Dan McGee

Henry D. Lieber

Executive Vice President 617.457.3392 dross@naihunneman.com Executive Vice President 617.457.3394 cchristie@naihunneman.com Sales Associate 617.457.3261 gbarroso@naihunneman.com

Executive Vice President 617.457.3231 rtito@naihunneman.com Senior Vice President 617.457.3357 lgoldstein@naihunneman.com Sales Associate 617.457.3266 dmcgee@naihunneman.com

Executive Vice President 617.457.3207 akaeyer@naihunneman.com Vice President 617.457.3245 aravech@naihunneman.com Sales Associate 617.457.3383 hlieber@naihunneman.com

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

THE REAL

Reporter

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

Suburbs Reach a Crossing Point L

BY JOE CLEMENTS OWELL — Local guys (and the occasional out-of-towner) have been making good at Cross Point Towers for the better part of a quarter century, and in 2014 a couJONATHAN DAVIS ple of Boston CRE veterans took on the 1.2-million-sf behemoth via a $100.0 million purchase that outdid all other single-asset office building exchanges in suburban Boston for the year. Cushman & Wakefield DAVID J. PERGOLA negotiated terms between Anchor Line and seller DivcoWest while financing of $77.6 million came from Santander Bank to acquire the complex that came on line in 1979 as home to Wang Laboratories. Anchor Line Partners BRIAN R. DOHERTY founders Brian R. Chaisson and Andrew J. Maher were joined by former Tishman Speyer principal Casey Wold plus Farallon Capital Management of San Francisco in putting together the winning entry JESSICA R. HUGHES to stave off several formi-

CROSS POINT TOWERS, LOWELL MA

dable contestants. Work was underway almost immediately after its closing at the stroke of midyear, including construction of a less imposing entrance to Tower Three. New ownership has vast experience in the tower trade, Maher a former leader at Equity Office Properties and Chaisson an alum of CrossHarbor Capital and Tishman, a major New York-based firm with interests in Boston’s Financial District and as developer of the Anthony’s Pier Four Restaurant. The transaction led by C&W Capital Markets principals Robert E. Griffin Jr., Edward C. Maher Jr. and Matthew E. Pullen followed that contingent’s handling of Cross Point’s sale to

DivcoWest back in 1998, that a $110 million consideration, although in Boston real estate lore, it was the low ball offer in the depths of the early 1990s recession when a trio of local real estate professionals banded together to buy the erstwhile Wang Towers for a mere $525,000, less than 50 cents per sf. When the notoriety of their gambit wore down, current C&W principal Luis Alvarado and developers Brian Kelly and Christopher Kelly fashioned several critical leases and made other maneuvers to accrete income and revive the cavernous structure taken back by Aetna Insurance following Wang’s high-profile bankruptcy, leading to continued on page 98

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THE REAL

Reporter

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

NAI/Hunneman Keeps Marching On B BY JOE CLEMENTS OSTON — NAI/Hunneman Commercial Co. has always overcome hurdles since being launched in 1929 just in time for the Great Depression, and the latest challenge occurred in spring 2014 when a crack Capital Markets contingent jumped to rival Colliers International (see story, page 51). The departure STUART PRATT was said to have been amicable and professional for all involved, and the indefatigable Seaport-based concern led by Chairman Stuart Pratt hardly folded the tent over at 303 Congress St., with its Capital Markets division— CARL L. CHRISTIE a consistent force in transactions up to $20 million—continuing to produce in 2014 from its stable of brokers who work in various teams, many operating for years. Among various deals of note, NAI/Hunneman was DAVID ROSS hired to peddle 22 Batterymarch St. for Taurus Investments, that global real estate company’s headquarters which is perched on the Rose Fitzgerald

Kennedy Greenway and the firm separately transacted a $20.0 million exchange of 44 School St. in the booming Downtown Crossing district. Principal Carl L. Christie, Dan McGee and Henry Lieber juggled numerous listings with a focus on multifamily throughout metropolitan Boston while industrial buildings listed throughout the region were also in the mix. David N. Ross negotiated the Taurus assignment while principal Robert Tito 22 BATTERYMARCH ST., BOSTON MA Sr. and Sales Associate Gina Barroso took the helm at 44 St. was acquired by 22 LLC and its manager, School St. (see related story, page 3). Senior VP Matthew Piccione. “It’s a great building in an David Gilkie and Associate Jason Rexinis were excellent location,” Ross told Real Reporter in busy north of town selling industrial buildings, assessing the 2014 season, praising Taurus for while the southern flank was ably covered by its stewardship of the building that dates to veteran Catherine Minnerly and Vice President 1943 and citing the greenway for dramatically Ovar Osvold (see related story, industrial sec- enhancing the four-story building’s surroundtion). J.P. Plunkett worked with the pair on ings. Meanwhile, the Class B office sector has another exclusive advising KS Partners in its enjoyed improving fundamentals during the past 18 months. $2.1 million sale of a Braintree flex building. continued on page 106 The 34,500-sf property at 22 Batterymarch

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THE REAL

Reporter

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

Campanelli Makes a Point In Quincy Buy BY JOE CLEMENTS ORTH QUINCY — Confidence of Campanelli’s stake launched here in 2013 upon buying a pair of empty office properties was displayed further in DANIEL DEMARCO this past summer’s $8.6 million purchase of 108 Myrtle St. adjacent to the other buildings which are dubbed Heritage One and Heritage Two. The third act is a 161,000-sf structure renamed Heritage Point while collectively the urban JEFF DEMARCO waterfront campus is being called Heritage Landing. The 2014 purchase makes Campanelli one of the largest property owners in Quincy, joining the likes of Boston-based firms such as Synergy Investments and ROBERT DEMARCO Related Beal. “Quincy is a great market to be in, and we are really happy with all of our investments in the city,” says Campanelli principal of acquisitions Steve Murphy who points to the STEPHEN J.T. MURPHY Northern tier’s access to

108 MYRTLE ST., QUINCY MA

Boston and Quincy Center via the MBTA Red Line as one attraction in signing more than 75,000 sf of leases at Heritage Two since paying $16.3 million for that and its companion and renovating it using Campanelli Construction into a modern, environmentally friendly facility featuring a high-end fitness facility, 80-seat conference center and café run by Boston eatery Sebastians. Murphy maintains the rent delta of $20 per sf compared to Boston will continue to benefit Heritage Landing—and already has, he details. “A lot of people are coming to think a 12-minute ride on the T is a pretty good alternative,” says Murphy, noting the Seaport District is just three stops away and

South Station only four, plus there is direct transit to Kendall Square in Cambridge. The allure was evident early, he recalls, with 55 percent hailing from downtown Boston and the Seaport accounting for 70 percent of the space already filled. The Myrtle Street building was listed by Cushman & Wakefield, the same team of Robert E. Griffin Jr. Edward C. Maher Jr. and Matthew E. Pullen broker for Campanelli’s prior acquisitions there, all three part of a massive corporate campus State Street Bank established along the Neponset River in the early 1980s. C&W was named leasing agent of Heritage Point with the continued on page 108

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THE REAL

Reporter

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

Maine CRE Gets Back on Track P B Y C A L E B E LW E L L ORTLAND, ME — Renowned as a tourist destination for its pristine beaches and natural beauty, Maine is increasingly being visited “from away” for a different reason: commercial real estate, as 2014 saw another year of

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increased investment growth in that arena after ED GARDNER slipping in the 2008 recession. The burgeoning Greater Portland market exhibited especially strong growth with a slight decrease in office vacancy rates and a couple of record office building sales. DTZ Executive Managing MATTHEW CARDENTE Director David J. Pergola, who worked on several Maine listings in conjunction with Capital Markets Senior Managing Director Brian R. Doherty, characterizes Portland as “one of the top two markets” regionally outside of metMICHAEL CARDENTE ropolitan Boston. DTZ’s Capital Markets crew worked with local Maine-based operation Cardente Real Estate on the sale of 511 Congress St. in

511 CONGRESS ST., PORTLAND ME

Portland. The 40-year-old property consists of approximately 130,000 square feet of Class A office and retail space and a freestanding drivethru ATM. It was marketed locally by Cardente Real Estate President Matthew Cardente and principal Michael Cardente and purchased by Ed Gardner via the investor’s Ocean Gate Plaza LLC. The property sold for $12.4 million in midApril 2014 with a cap rate set at 8 percent. Mathew Cardente stated “The purchase of 511

Congress Street is great opportunity for Ed and is a win for the city of Portlandi.” As of the closing by Gardner, the property operated at a 91 percent occupancy rate with anchor tenant AMEC, a solid credit company, leasing 35 percent—46,000 sf—in the building. Gardner reveals that since he took over the property, the vacancy rate has risen to 96 percent and he predicts that the building will be at continued on page 110

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

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$9.7 MILLION in financing for the acquisition of a 24,520 square foot, multi-tenant retail property in Newtown, Mass.

$8.8 MILLION for the refinancing of two hospital-leased medical office buildings in Providence, R.I.

$8.6 MILLION for the refinancing of a Class-A, 126,000 square foot office property in Fairfield, Conn.

$6.825 MILLION in financing for the acquisition of a multi-tenant, grocery-anchored retail shopping center in Sicklersville, N.J.

$4.84 MILLION in financing for the acquisition of a 50,000 square foot, multi-tenant property in Manchester, Conn.

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Florida Firm Pays $19M For Pair of Maine MOBs B Y C A L E B E LW E L L UGUSTA, ME — A pair of medical office deals completed in central Maine last year highlight investment growth in regions outside of the state’s more populous Greater Portland area. One facility is at 15 Enterprise Dr. in Augusta and the other at 107 First Park Dr. in Oakland. They sold for a combined $19 million to MMAC Acquisition Corp, a Florida corporation MAINE with a national reach. The property at 15 Enterprise Dr. was constructed in 2011 as a build-to-suit project for MaineGeneral Medical Center by an Augusta-based CHRISTOPHER PASZYC development company, Lot 18 LLC, an entity managed by Kevin Mattson. The two-story, 51,000-sf medical office sold for 14.7 million in February 2014. Located on 3.6 acres, the building is leased in its entirety to MaineGeneral. The office hosts the health care network’s Musculoskeletal Center and provides general orthopedic surgery, sports medicine and rehabilitation therapists, X-ray assessment, and treatment and rehabilitation services. It is located in close proximity to the state-of-the-art medical center, a $322 million dollar hospital that opened its doors in 2013. Mattson reportedly sold the building partly to free up capital in order to concentrate on his ongoing project to redevelop the former MaineGeneral Medical Center hospital on East Chestnut Street in Augusta. The sole tenant of the building, MaineGeneral has a lease until 2026, which will continue to be in effect under the new owners. The continued on page 77

Industrial Market Energized Via 60,000-SF Portland Deal B Y C A L E B E LW E L L ORTLAND, ME — Last September’s purchase of 400 Riverside Industrial Parkway provided a welcome opportunity for Unitil Co. to end its search for a new distribution operations center (DOC). The New England natural gas and THOMAS DUNHAM MARGARET O’BRIEN electricity company purchased the property to replace its existing MAINE Maine DOC at 1075 Forest Avenue in Portland. The $2.5 million sale was one of the many that took place this past year in Portland’s improving commercial real estate market. The new Unitil property consists of 60,000 sf of combined warehouse and office space. With a land area of just over five acres, the property allows con- JOSEPH PORTA siderable room for expansion and parking. Of the 59,400 sf available in the building, 55,000 sf is warehouse with an additional 5,000 sf of office space as well as a cafeteria and shop offices. Thomas Dunham, SIOR, brokered the deal for seller Grass Properties in conjunction with Joseph Porta, SIOR, of CBRE The Boulos Co. and Margaret O’Brien of Margaret continued on page 104

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

EXCEPTIONAL LEASE OPPORTUNITY GOEDECKE & CO. ARRANGED $16.4 MILLION IN CMBS FUNDING FROM BARCLAY’S CAPITAL TO ENABLE ALBANY ROAD REAL ESTATE PARTNERS TO BUY A 165,000-SF OFFICE BUILDING AT 1690 NEW BRITAIN AVE. IN FARMINGTON, CT FOR $20.5 MILLION.

30 Webster Street

CMBS Lenders Working To Regain Footing in NE BY MIKE HOBAN OSTON — The CMBS market has roared back in recent years on a national level after its colossal collapse—climbing to nearly $90 billion in originations in 2014, according to CMBS analyst Trepp— yet Greater Boston has still proven a less-than fertile ground for purveyors of the funding instrument since the economic recovery began regionally. And while there were some noteworthy CMBS deals in the market, such as Deutsche Bank’s $203-million loan to DivcoWest towards their $395 million purchase of One Kendall Square in Cambridge, there were only about three dozen deals in total recorded in SHAWN HERLIHY Massachusetts and New Hampshire in 2014, with an additional 47 in Connecticut, according to data provided by Trepp to Real Reporter. “The CMBS folks are underweighted from a national portfolio perspective. They’re not getting as deep a market share in New England as they are in other markets,” observes John Gorga, principal at Fantini & Gorga. “It’s not that they don’t want to be here, it’s just that they’re unable to get the volume that they want, and it’s basically a testament to the fact that we have very well-capitalized mid-tier community banks competing very hard for the same types of loans.” Fantini & Gorga did not close a single CMBS loan in New England in 2014, although Gorga reports his firm showed a number of loans to CMBS lenders which ultimately lost the deals to banks and life compacontinued on page 113

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THE REAL

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

Buyer Jumps into Wells Retail Market W B Y C A L E B E LW E L L ELLS, ME — The early 2014 sale of Wells Corner Shopping Center on Route One illustrates Maine’ s resurgent real estate market is extending to retail assets, joining better times of late for multifamily and office

MAINE

buildings in the state’s southern flank. The CASIMIR GROBLEWSKI 34,000-sf property was acquired by Wells Shopping Center LLC for $3.0 million on a listing marketed by CBRE The Boulous Group. Fantini & Gorga lined up acquisition financing for the buyer. The exchange brokered JOHN CUNNANE by Charles Day and Dan Greenstein from CBRE Boulous closed in March 2014. To finance the deal, the buyer turned to Fantini & Gorga, one of New England’s leading mortgage banking firms which specializes in arranging traCHARLES DAY ditional debt, mezzanine and equity financing for all commercial property types throughout New England and beyond. Led by Managing Director Casimir Groblewski

WELLS CORNER SHOPPING CENTER, WELLS ME

and Analyst Jason Cunnane, the effort resulted in a $2.3 million mortgage financing secured from Saint Anne’s Credit Union, based in Somerset MA. The property on 2.9 acres is comprised of two single-story buildings and anchored by Wells IGA food market. Other tenants include a Dairy Queen, Laundromat, Mitch D’s Family Restaurant and Sherwin Williams Paint Store. Its location on Route One affords it prime positioning to attract commercial traffic, with an estimated count of over 20,000 cars per day and the lot’s 165 parking spots allow ample room for these travelers. Speaking about the property, Groblewski remarked, “"It is basic,

bread-and-butter real estate that has been there a long time," adding, "It does super in the summer, and then slows down after that like everything up there, but they still do a good business." Cunnane says the opportunity “generated a great deal of interest from a variety of New England based lenders, all of whom recognized the desirable location of this asset as well as its occupancy history. The result was a very attractive fixed-rate, five-year loan.” The sale and its financing represent the steady performance of Maine retail as the economy and national market regains its pre-crash strength even in secondary areas. u

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

B Y J AY F I T Z G E R A L D OSTON — In 2014, the broad-based commercial real estate recovery did not benefit just brokers, buyers, developers, lenders and sellers within the industry. It also extended to major law firms and their

LEGAL

attorneys who helped negotiate acquisition and sales KENNETH GOLDBERG terms, arranged financings, reviewed major lease deals, handled thorny permitting and zoning issues, and dealt with a host of other matters that make up the full spectrum of the commercial real estate industry. From Goulston & DEBORAH S. HORWITZ Storrs’s involvement in the $190 million permanent financing of the new State Street Bank headquarters at Channel Center in South Boston to making sure permits were in order for redevelopment of old strip malls in the suburbs, law SALLY E. MICHAEL firms specializing in commercial real estate were busy in 2014. And it was all fueled not only by an overall improving economy, as measured by falling

unemployment rates for both New England and the US, but also plentiful money and low interest rates that finally encouraged many developers, investors and lenders that the time was right to put their cash to good uses. “There was a lot of money looking for deals,” says Thomas J. Phillips, a partner and chair of the real estate group at Brown Rudnick LLP in Boston. “A lot of deals came together and were finalized in 2014. All sectors are looking up—office, retail, mixed-use, industrial.It was much more active than in 2013. And more and more money is coming in this year.” So much money is coming in that it’s leaving some wondering how long the good times can last. Bernkopf Goodman LLP partner Kenneth Goldberg says there appears to be a “growing dichotomy” within the market: An existing belief that the immediate future is bright, but also there is a “wary eye” about its sustainability in the long-term. “People are a little watchful,” he says. “But I think that’s healthy. It’s healthy to have that attitude.” That lingering market wariness aside, last year was great for many law firms with commer-

Photo: Derek Szabo

CRE Action Keeps Law Firms Busy B

cial real estate practices—and 2015 is shaping up to be another good year. At Brown Rudnick, among the major deals it worked on last year involved DivcoWest, the San Francisco real estate investment and operating firm that has been very active in the Boston market over recent years. In early 2014, DivcoWest made a major addition to its area holdings with the purchase of One Kendall Square, the multi-building corporate campus in Cambridge. The $395-million acquisition has close to one million sf of space, including a parking garage and future potential development rights. The seller was a joint venture between Related Beal and Rockwood Capital, a partnership which acquired One Kendall Sq. in 2006 from JER Partners and Lincoln Property Co. for about continued on page 114

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THE REAL

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Fueled by $100M Fund, Albany Road Drives On B Y J AY F I T Z G E R A L D ounded only three years ago, Albany Road Real Estate Partners has already broken out of its original New England sphere of operations and is now expanding quickly via key commercial property acquisitions in Nashville, Atlanta and other areas of the Southeast. As it aggressively pushes southward, the BostonCHRISTOPHER J. KNISLEY based Albany Road also recently raised a new $25 million fund to snap up additional self-storage facilities in the Northeast, beyond the eight storage properties it has already purchased in the region. And Albany Road SCOTT CLOUD President Christopher J. Knisley says he is far from finished when it comes to expanding his firm’s commercial real estate reach, noting he has his eye on possible deals one day in the Southwest and midAtlantic areas. “We will MARK J. TRYDER continue to grow the entire operation, but it’s ultimately about finding the right type of deals that you can do,” says Knisley, whose company’s holdings will stand at

Boston Properties

about $425 million after a slew of recent deals officially close. Previously an executive at Burlington’s RJ Kelly Company and Rhode Island’s Koffler Group, Knisley formed Albany Road Real Estate the summer of 2012—and quickly began putting the $200 million it raised from investors to good use, buying up office, flex-industrial, retail and storage properties in New England, most of them in Connecticut. The company’s investment strategy: Pursuing CRE opportunities in the $10 millionto $40 million price range, a niche often considered too small by large institutional investors and too large by many smaller private investors,

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according to the company. Last year, Albany Road began applying its strategy to areas outside New England. Armed with a new $100 million fund, the firm opened a two-person office in Nashville TN and hired industry veteran Scott Cloud to oversee investments in the Southeast. The move was timed in conjunction with Albany Road’s purchase of four office and flex-industrial properties there totaling about 675,000 sf and costing more than $80 million. Albany Real Estate’s expansion into Nashville wasn’t by chance. Knisley graduated from Vanderbuilt University with a bachelor’s degree in economics and later an MBA from the continued on page 90

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T H E A N N U A L R E V I E W 41

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CBRE/NE Team Finds School Housing Rocks B Y C A L E B E LW E L L EENE, NH — Intensified demand for student housing was apparent this past year as demonstrated in numerous development, lending and property sales transactions across New England, and they continue in the Granite State at the start of 2015, with CBRE/NE pitching a new offering accommodating Keene State College attendees after the firm separately negotiated a BARRETT BILOTTA University of Maine sale in 2014.

NEW HAMPSHIRE

Higher education enrollment is rising across the country as Americans view such skills a necessity in the new millennium economy, and the housing market near colleges is pushing to meet demand where new supply may be limited. Serving the University of Maine’s flagship campus in Orono, 144 units built ROGER DIEKER on Empire Drive sold in May 2014 for almost $19.5 million. Orchard Trails was traded by Orchard Trails Housing LLC to Orion Student Housing via a listing utilizing Dan Greenstein and the multifamily sales team of Simon J. Butler and Biria St. John of CBRE. Orchard Trails holds 576 beds in a structure totaling 161, 275 sf. Each unit is comprised of four beds in a 1,120-sf suite, unlike standard multifamicontinued on page 125 DAN GREENSTEIN

Lebanon Apartments Reap $40M As SMC Cashes out in NH Trade BY JOE CLEMENTS EBANON, NH — Evidenced in the hotel acquired last month in Mansfield, MA, or from multiple multifamily projects underway, SMC Management Corp. is (as usual) actively buying and building across New England, but the prolific firm led by Stephen M. Chapman did complete an exit strategy

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on one asset here in the northern region, selling its 252-unit Timberwood Commons to a Pennsylvania investor for a healthy $40 million in a July 2014 sale negotiated by Apartment Realty Advisors. STEPHEN M. CHAPMAN The effort was led by ARA veteran Terence M. Scott, who opted against making the transition when the New England operation was acquired last year by Institutional Property Advisors, the multifamily arm of Marcus & Millichap. Scott’s longtime colleagues and he had an amicable departure, he tells Real Reporter, but the multifamily expert who specializes in the New Hampshire market has thrown out his own shingle, launching TMS Real Estate Investment Advisors TERENCE M. SCOTT late last year. “It has been super busy,” Scott reports, although there were a few ski vacations thrown in this past winter, including one to the French Alps. Besides Lebanon, Scott and the ARA crew also had an opportunity to celebrate harvesting the largest apartment sale in New England last year, the $108.5 million trade of AvalonBay Danvers continued on page 129

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Lots of advisors suit up, show up and keep up. But how many know when to speak up? RIDGEBURY CORPORATE CENTER, DANBURY CT

Washington Trust Thriving With Connecticut Platform BY MIKE HOBAN NFIELD, CT — With Rhode Island’s economy recovering at a slower rate than the other New England states, Westerly based Washington Trust has found their strategy of ramping up activity in neighboring Connecticut is resulting in huge dividends, as approximately 40 percent of the bank’s CRE lending volume of $350 million in 2014 came from that market. “We have more resources focused on Connecticut, more people on the ground doing Connecticut business, and that’s why it has been busy for us,” reports Julia Anne M. Senior VP CONNECTICUT Slom, and team leader of the bank’s commercial real estate group. Until just a few years ago, Vice President Suzanne Walsh Erno was the only commercial real JULIA ANNE M. SLOM estate lender working in the state for Washington Trust, before Vice President Mary K. Ettinger began splitting her time between Rhode Island and Connecticut. Approximately two years ago, Timothy Pickering joined the team after 15 years working out of Middleton for Citizens Bank. “And he’s made the difference in terms of the volume, because he’s completely focused on Connecticut,” Slom says of the industry veteran and Senior VP who has a quar- MARY K. ETTINGER ter-century of experience in the business. In 2014, Pickering arranged $12.8 million in financing for developer Mayfield Place LLC for construction of the first phase of Mayfield Place, a 340unit, luxury apartment community in Enfield. The first phase consists of 10 two-story buildings, with one and two-bedroom luxury apartment units. It will also include a business center, clubhouse, fitness center, leasing office, parking garages, pool, and TIMOTHY PICKERING storage areas. Pickering also arranged $4.1 million in financing for Metro Star Capital to purchase a 34,000-sf property in New Haven consisting of 10,850-sf of retail space and a 120-vehicle parking garage at 254260 Crown St. The property also houses two longtime restaurants, ‘Bar,’ and ‘Aladdin Crown Pizza.’ Metro Star Capital is a Connecticut real estate continued on page 96

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THANK YOU ! HARTFORD, CT

Encouraging Signs in Connecticut Rebound B Y J AY F I T Z G E R A L D ARTFORD, CT—Last year, Connecticut’s commercial real estate market continued at its slow but steady recovery in all subsectors, from offices to multifamily housing, thanks partly to a nationwide trend of younger people wanting to “live, work and play” in urban settings. In particular, downtown Hartford seems to be benefiting from the JOHN MCCORMICK CONNECTICUT urban LWP phenomenon, as numerous office buildings traded hands last year and in early 2015, all while the city anticipates adding new downtown housing for students and younger workers. “It has been a very measured pace of recovery,” says John McCormick, a principal at CBRE-New England. “Harford’s downtown is definitely alive and well and doing much better.” Hartford’s down- FELIX T. CHARNEY town office vacancy rate, for instance, has fallen to about 15 percent from 28 percent in 2011, says McCormick. Suburban tenants moving into the city are behind much of the surge, such as accounting firm CohnReznick’s decision last year to lease 50,000 sf of office space at the MetroCenter in Hartford, consolidating its suburcontinued on page 118

Institutional Property Advisors Tops Again in CT Multifamily BY JOE CLEMENTS TAMFORD, CT — The Connecticut multifamily sector was a bright spot in the 2014 lending and CRE sales arena, and to no one’s great surprise, the brokerage team from Institutional STEVE WITTEN Property Advisors was its shin- VICTOR NOLLETTI ing star thanks to a series of impressive transactions statewide, including the $75.1 million exchange of Cornerstone at Bedford here just outside of New York City. In that trade, Los Angeles-based JRK MF Opportunities acquired the 13-story, 368-unit luxury asset from Cornerstone Real Estate Advisers, with IPA Executive Directors Steve Witten and Victor Nolletti joined by Associate Eric Pentore handling both sides of the trade in which $200,000 per unit ERIC PENTORE was needed to win 1425-1435 Bedford St., a building which dates to 1963. Fairfield Bedford LLC was seller and Cornerstone Apartments Property Owner LLC the buyer. Another 2014 IPA conclusion involved 198 units in Middletown that sold for $16.4 million to Hunter Crossing LLC in which the brokerage team was on both sides, including seller Middletown Apartment continued on page 119

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ACQUISITIONS

DEVELOPMENT

CONSTRUCTION

PROVIDENCE, RI

RI’s ‘R’Word Now ‘Rebound’ B Y J AY F I T Z G E R A L D ROVIDENCE, RI — The recent recession was not kind to Rhode Island. For nearly three straight years following the 2008 Wall St. crash and subsequent deep economic downturn, the state’s unemployment rate near 12 RHODE ISLAND hovered percent, consistently far higher than the jobless averages for other ALDEN ANDERSON New England states and virtually all of the US as well. The entire Rhode Island commercial real estate market—industrial, multifamily, office and retail alike—suffered as a result. But “Little Rhody’s” economy has been slowly healing in recent years, as the jobless rate has steadily fallen to under 7 percent. While still higher than the US average of 5.7 percent and 5.5 percent LAUREL BOWERMAN in Massachusetts, for Rhode Island, it is a real economic improvement from the double-digit days after the 2008 recession. And that economic rebound can be seen in a host of supporting statistics and anecdotal evidence about the commercial real estate market in the state. The Class A office vacancy rate in Providence, for instance, is now about 8.6 percent while total office continued on page 120 MICHAEL GIUTTARI

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Paolino Properties Invests $75M in Providence Deals BY JOE CLEMENTS ROVIDENCE, RI — An encouraging sign since Rhode Island’s recessionary woes have begun to ebb is attracting investors from outside the state, but one of the biggest players of the past year has RHODE ISLAND been Paolino Properties, a homegrown group led by former Providence Mayor Joseph R. Paolino Jr. The firm JOSEPH R. PAOLINO JR. began 2014 by acquiring 100 Westminster St. in downtown Providence for $64 million along with the abutting 30 Kennedy Plaza and a parking lot on Weybosset Street, then separately later in the year committed to the purchase of the East Providence office building that houses operations of toy giant Hasbro Inc., that investment requiring a $10.5 million consideration. In the more recent exchange, Conhas I & II LLC traded 200 Narragansett Park Dr. to Paolino. The 123,000-sf asset is home to Hasbro’s administrative, data and R&D departments, employing approximately 400 people in a venue close to Hasbro’s headquarters in Pawtucket. In a statement after the latter sale, Joseph Paolino relayed that purchase is a way of “supporting the continued growth of Rhode Island’s economy and providing high-quality space for corporations and their employees,” and also “aligns with our objectives to grow and diversify the Paolino portfolio.” continued on page 97

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T H E A N N U A L R E V I E W 45

SELECTED COMMERCIAL REAL ESTATE FINANCING TRANSACTIONS ARRANGED BY:

CAPITAL ALLIANCE ADVISORS Ashworth Mortgage Corp. – Boston, MA Estreich & Company – New York, NY SALT POND SHOPPING CENTER, NARRAGANSETT RI

CBRE/NE RI Retail Sale Brings $39.2M for Client ARRAGANSETT, RI — Double-digit unemployment from the 2008 recession trickled down to negatively impact Rhode Island retail owners, and many are still struggling even as jobs have finally begun to return to their communities. A vibrant 185,000-sf plaza belying the Ocean State’s economic RHODE ISLAND ennui has been Salt Pond Shopping Center, its performance impres- JEFF DUNNE sive enough to generate a bidding war conducted exclusively through the CBRE/NE Capital Markets team that delivered $39.2 million for seller Cornerstone Real Estate Advisors in a Q4 2014 purchase by Dividend Capital Diversified Property Fund Inc. “We are happy to have assisted both parties in this transaction,” CBRE/NE principal William Moylan DAVID GAVIN relayed in a statement upon the multi-tenanted center’s closing. Joined on the assignment by principals Christopher Angelone and Nathaniel Heald plus Vice President Bruce Lusa, Moylan cites “a best-in-class, supermarket-anchored shopping center with exceptional sales volume and enormous barriers to entry” as key elements of the brisk response. Angelone’s group is active throughout New continued on page 90 NATHANIEL HEALD

Central Falls Project has East West Bank Support B Y J AY F I T Z G E R A L D ENTRAL FALLS, RI — East West Bank continues to make new loan inroads in New England after its purchase five years ago of the assets of the failed United Commercial Bank, a Chinese institution that had also focused on China-US lending deals. In one of its key 2014 commitRHODE ISLAND ments, California-based East West Bank, whose local loan office operates out of Newton, provided about $8.9 million to finish up the ambitious redevelopment of an old mill building in Central Falls, a mill community near the Massachusetts border just north of Providence. East West’s financing is allowing developers Louis Yip and Sunny Ng to complete the third, last and largest phase of their multi-year redevelopment of what now is known as the M Residential complex in an old mill along the Blackstone River. Phases 1 and 2, long since completed, entailed construction of about 70 “luxury loft” apartment units at M Residential, located on 4.5 acres of land along the river. But Phase 3, which is flanked by the previously built-out portions, will have about 90 rental units. One of the Phase 3 buildings is already completed, with tenants moving in. Construction of the second, which will have 53 units, is expected to be completed within about six months. East West Bank Vice President Ricky Lam says his bank’s rationale for backing the last phase of the M Residential project was very simple: the developAd 2 v6.indd 1 continued on page 81

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

Strong NH Retail Seen in Two Sales P B Y C A L E B E LW E L L ORTSMOUTH, NH — New Hampshire enjoyed a particularly robust year of retail real estate as the economy continues to rebound from the depths of the 2008 recession. Two major New Hampshire sales negotiated in 2014 by Cushman & Wakefield

NEW HAMPSHIRE

exemplify this growing trend as retail investors follow the consumers eager to spend their money in the tax haven of the Granite State. In Portsmouth the sale of Durgin Square to Dividend Capital for $24.7 million spoke to the strength of the property, as well as its anchor tenant, Shaw’s Supermarket, according to brokers at Cushman & Wakefield that includes Denis Dancoes, JUSTIN M. SMITH Thomas Farrelly and Sue Ann Johnson with retail experts Geoff Millerd and Justin M. Smith. Shaw’s, similar to the economy, has been showing steady improvement after a period of retrenchment. Perhaps due in part to its removal of an oft-criticized rewards card-program, the grocery giant has seen sales rise between 10 and 20 percent in the past year and appears poised to retain its No. 2 spot ahead of formidable competitor Market Basket, which did see volume drop as part of its infamous ownership dispute.

DURGIN SQUARE, PORTSMOUTH NH

The Durgin Square listing attracted a significant amount of institutional capital, with at least half a dozen national groups interested in the property according to Smith, who worked on the deal for the seller, Clarion Partners. The 137,000-sf shopping center also houses such tenants as HomeGoods, Petco and TJ Maxx and was 94 percent leased at the time of the sale. Durgin Square’s prime location in Portsmouth, a mecca for tax-conscious consumers, adds to its attractiveness, C&W officials outlined. In a statement, Millerd said Durgin Square” is ideally located in one of southern New Hampshire’s most dominant retail corridors,” and of Shaw’s

specifically he added, “Shaw’s has served as a fixture of the local community ever since the completion of the center in 1993 and has experienced a significant rebound since being acquired by Cerberus in 2013.” Millerd is quite familiar with the property, having been on the C&W team that sold it to Clarion in March 2008. C&W also took part in another significant retail deal in the Granite State this past year on behalf of the seller who they had introduced to the Derry Meadows Shoppes in Derry, Katz Properties, back in spring 2011 when the continued on page 109

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C&W Debt & Equity Group Keeps LCB in Growth Mode B Y C A L E B E LW E L L OUTH BURLINGTON, VT — The lucrative senior housing market is extending into New England as several financing deals completed over the past year by Cushman & Wakefield attest. Senior housing for a long time was mainly focused in traditional retirement states such as Florida; changing demographics and social practices, however, have massively extended the scope and reach of the market. C&W’s Senior Housing Capital Markets contingent capped off a successful 2014 with the announcement of $49.6 million in construction financing and joint venture equity to support two senior housing developments in northern New England. The firm arranged the loans on behalf of LCB Senior Living; the two developments will be its seventh and eighth senior housing projects since beginning operations in 2013. Former members of Newton Senior Living—an industry pioneer bought out in 2005—lead the LCB team. Newton Senior Living was the 16th largest senior housing owner/operator nationally until selling its portfolio, then its founders had to wait out a non-compete AARON ROSENZWEIG clause before launching the new company. The Residence at Quarry Hill in South Burlington is designed to be a 102-apartment/104-bed complex with accommodations for independent, assisted, and memory care residents. The project will be located on seven acres just outside downtown Burlington acquired as part of a larger deal that took place in 2014. Construction financing came via PNC Bank, with $18.4 million provided, while Virtus Real RICHARD SWARTZ Estate Capital committed $8.5 million of joint venture equity. The project which has an estimated completion of 2016 will have a library, a theater/presentation space and an Aquatic facility among its menu of amenities. The residence planned for Salem Woods in Salem, NH, will be an 84apartment / 88-bed independent, assisted and memory care community located in a three-story, 72,600-sf building also on a seven-acre site. Salem Woods will include a mix of studio, one-bedroom and two-bedroom apartments, and will feature a Reflections Memory Care wing, as well as a variety of common areas: cafes, a computer center, entertainment and living rooms, library and private dining facilities. The landscaped grounds will include walking paths for residents, plus multiple gardens, sitting areas and other amenities. Construction is planned to be complete by 2016. LCB Senior Living is headed by CEO Michael A. Stoller and Stephen D. Puliafico; since its organization in 2013 it has broken ground on eight properties and acquired six more across five New England states. The company holds $364 million in project capitalization with 1,343 seniors housing beds, 523 of which are currently under construction. C&W Director Aaron Rosenzweig, says of LCB “has demonstrated the ability to appropriately scale as a company, attract best-in-class employees and find highly desirable development sites and acquisition opportunities, all of which have resulted in attracting best-in class capital partners” for the ventures. “LCB had a tremendous 2014 which included four groundbreakings along with another four property acquisitions,” Swartz adds, while Stoller says his firm is “thrilled to enter into both the Salem and South Burlington markets, two areas we believe demonstrate excellent market characteristics.” PNC Bank, Wells Fargo and Virtus “have all been terrific on the execution of these transactions” orchestrated through the C&W team. Virtus was joined by M&T Bank in backing one of LCB’s 2014 acquisitions, that being Longwood Place at Reading, a 86-unit senior housing continued on page 125

T H E A N N U A L R E V I E W 47

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Investors Going All In on Inns B Y J AY F I T Z G E R A L D OSTON — Not all the hotel-industry pieces came together for operators, buyers, sellers, brokers and developers of hotels in the Greater Boston area in 2014. But enough of the pieces, especially in terms of occupancy levels and

HOTELS

room rates, came together SEBASTIAN COLELLA to make 2014 a stellar year

for the hotel industry— and officials are highly optimistic the positive market trends will continue through 2015. “From almost all aspects of the hotel industry, it was an outstanding DAVID MCELROY year,” says James O’Connell, principal at O’Connell Hospitality Group, a Danvers hotel broker. “It was a great year. And 2015 is expected to be as good or better.” Indeed, the new year has already gotten off to a DENNY MEIKLEHAM fast start in Boston, with the groundbreaking in January for the much anticipated Four Seasons Hotel & Private Residences development at 1 Dalton St. in

FAIRMONT BATTERY WHARF, BOSTON MA BROUGHT $48.6 MILLION IN ITS 2014 SALE TO AN ONTARIO INVESTOR.

Boston’s Back Bay. Commercial real estate and capital market services company HFF lined up $680 million in construction financing for the 61-story tower, which will include 180 luxury condos and a 211-room luxury hotel. Meanwhile, the hotel market in Boston has improved so much that National Development, developer of the high-profile Ink Block project in Boston’s Sound End, recently announced it is going to add a 200-room AC Hotel by Marriot at the site of the former Boston Herald headquarters along Harrison Avenue. None of this would be possible without the

impressive recovery of the hotel industry in Greater Boston since the Great Recession, marked by an extremely strong 2014 performance that encouraged investors and developers alike to finally act on adding new products to the mix. According to Boston’s Pinnacle Advisory Group, occupancy for the core BostonCambridge market alone hit 81.6 percent last year, as average daily room rates increased by 8.9 percent to $238 and revenue per available room (revPAR) increased by a whopping 10.4 continued on page 124

Eastdil Peddles Revere Hotel BY JOE CLEMENTS OSTON — There were many salient factors that led to the Revere Hotel Boston Common being the region’s most expensive hotel trade of 2014, according to brokers for the 356-room property

HOTELS

that brought $260.4 million from Pebblebrook to seller Northwoods JON E. BORTZ Investors, owners of 200 Stuart St. since Oct. 2010 when the cost of admission was only $143.5 million. The package harvested through Eastdil Secured also includes an attached 826-vehicle parking garage and adjacent land MOLLY PADIEN-HAVENS parcel sporting development potential. Eastdil Secured Capital Markets team member Christopher Phaneuf points to Revere’s prime position at the juncture of Boston’s Back Bay, downtown and Theater District as a substantial allure, as well as its $29.0 million renovation program undertaken in 2012 and impressive operational numbers. Those were the same elements Pebblebrook officials rattled off after the deal closed in late December, the firm’s commitment having first been unveiled by Real

REVERE HOTEL AT BOSTON COMMON, 200 STUART ST., BOSTON MA

Reporter in mid-October. “The hotel is ideally located near high-quality demand generators including Class A office space, some of Boston’s finest dining, upscale destination retail, theater venues and medical and educational institutions,” Pebblebrook Chairman and CEO Jon E. Bortz conveyed in a statement following the early December exchange in which the Maryland-based entity lauded Revere’s impressive occupancy rate of 87 percent and an average daily room rate of $231. “We are thrilled to announce our acquisition of the Revere Hotel and the expansion of our presence in the highly desirable Boston market,” Bortz added in his remarks, noting the Revere is also just blocks from Pebblebrook’s trendy W Hotel, those part of the trust’s holdings now numbered at 35 located in 11 states

and Washington. DC. “The hotel has traditionally done very well,” Phaneuf offered while declining to discuss financials and other terms of the agreement. In its announcement, Pebblebrook projected the hotel in 2015 will generate EBITDA of $18.0 million to $18.5 million and NOI after capital reserves of $16.2 million to $16.7 million. Revenue Per Available Room (RevPAR) for the hotel was $202 at the time of its sale. One complicating aspect of the pricing is the garage and its worth. Collectively, the $260.4 million would equate to $731,460 per key, but an expert familiar with the negotiations maintains the parking component could have equated to upwards of $125,000 per space, or $103.2 million were that the case, putting the average continued on page 122

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RESIDENCES AT STEVENS POND, SAUGUS MA

Berkadia Comes to Town Via Purchase of Keystone BY JOE CLEMENTS ARBLEHEAD — Commercial real estate borrowers were not the only constituency which had their dreams come true in 2014 from historic low interest rates and the region’s diverse economy. Lenders of all sorts are stoked as well about the robust conditions which enabled prized expansions among such lofty institutions as Berkadia Commercial Mortgage, Eastern Bank and Rockland Trust Co., each fulfilling long-held goals to broaden their territories in the region. Berkadia got a foothold here via purchase of Keystone Commercial Capital, a Phoenix group whose Northeast office headquartered in Marblehead eagerly welcomed the firm co-owned by Berkshire Hathaway. “We are really excited,” Keystone Senior VP Ryan Nelson said in a Real Reporter article after the agreement with Berkadia was inked and in which he announced the headquarters for Berkadia’s regional operation would be at KCC’s home at in Marblehead at 100 Pleasant St. Recently appointed Berkadia CEO Justin Wheeler JUSTIN WHEELER notes in an interview that the lender has a long track record in metropolitan Boston, but agreed that finally establishing a beachhead here “strengthens our position” as the Berkadia operation which is solid in the Southeast and most other areas is targeting any gaps or pockets where it sees opportunities for growth. The KCC deal is less about responding to current boom conditions and more creating a longrange blueprint for the lending business, Wheeler RYAN NELSON stresses even in acknowledging Boston “is a frothy market right now,” especially on the multifamily front where Berkadia is a leading player. “The New England market is very strong, but I see rising tides in many places,” Wheeler said following his selection as CEO where he adds the prospects are upbeat overall thanks in part to “a big refi wave coming through” created by all the 10-year CMBS loans and other financings struck from 2005 to 2008. ANTHONY GOLEBIEWSKI Wheeler had served as interim CEO since April 2014 until being given the title permanently this January while relinquishing his duties as COO of Leucadia National Corp. That group formed a joint venture with Berkshire Hathaway in Dec. 2009 to form Berkadia, one of its first moves being to take over the assets of Capmark Financial Corp. Berkadia had a definite impact on the local lending landscape in 2014 as evidenced by $75.6 million delivered to JRK Holdings for the Los Angeles-based investor’s acquisition of the Residences at Stevens Pond in Saugus. That $94.0 million purchase of 326 apartments from Invesco was among the biggest multifamily transactions of the season in New England in a sale negotiated by HFF. Being a Freddie Mac Program Plus lender, it is no great surprise that GSE was behind the Saugus financing, although Berkadia is also a Fannie Mae DUS(r), HUD, life insurer, LEAN and MAP originator and servicer as well in aiming to provide access to capital from a broad spectrum for the acquisition, construction and renovation of multifamily and commercial properties. Berkadia was also busy last year helping one of the area’s most established residential landlords—Chestnut Hill Realty Corp.—continue to continued on page 122

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Synergy Scales New Heights in Hub B BY JOE CLEMENTS OSTON — In the commercial real estate ballgame, Synergy Investments compares well to Red Sox MVP Dustin Pedroia—shows up before everyone else, relentlessly dives into its pursuits and usually does something productive— oft times amazing— with the object once secured. And in 2014, the Synergy team got a coveted trophy (fittingly in October) landing with GreenOak a 445,000sf downtown office building at a consideration of $143 million as the firm founded by Irish native and DAVID GREANEY PricewaterhouseCoopers accountant David J. Greaney leapt into another league entering its second decade in the industry. The contingent housed at 100 Franklin St. was active on both sides of the transactional field last seaBRIAN CROSSE son, reaping $52.7 million from a 103,000-sf Seaport District office building acquired for $10.5 million in Oct. 2011 and $8.8 million from 4 Liberty Sq., a boutique 27,000-sf property Synergy had since Jan. 2008, that asset as in the MATTHEW GODOFF case of multiple others of a more modest scale the firm cut its teeth on while compiling a substantial fiefdom of Class B product. They are concentrated along the MBTA Red Line which runs from Alewife in Cambridge (home of a MAURA GRIFFITH MOFFATT Synergy asset at 10 Fawcett St. that sold for $31.3 million in 2013) and out to Braintree, with holdings in Synergy’s

51 MELCHER ST., BOSTON MA

TEN POST OFFICE SQUARE, BOSTON MA

“

Dave (Greaney) is the poster child for monetizing some nice gains he earned by having the guts to buy early when everybody else was running away.

”

FRANK F. PETZ JLL Capital Markets Managing Director

control one station from Boston at North Quincy where the firm owns 350,000 sf at 100 Hancock St. and 200 Newport Ave. bought separately via C&W in 2011. Minus that assemblage, Synergy has primarily owned Back Bay, downtown and Seaport office and mixed-use assets, among them former warehouse-turned-office buildings overlooking Fort Point Channel at 250 and 253 Summer Street which serve as that booming district’s gateway and where 51 Melcher St. is perched a few blocks away and now owned by a European investor, Zurich Capital, after Synergy took a vacant building, renovated it and leased the building to full capacity. “It’s incredible,” Cushman & Wakefield Executive Director Matthew E. Pullen remarks of Synergy’s steady ascension that began with a modest mixed-use project in Dorchester. C&W has brokered a number of Synergy’s transactions, 10 Fawcett St. and 51 Melcher St. among them, while another C&W exclusive paid off handsomely in the Seaport District for Greaney and company when the group paired with Hub heavyweight DivcoWest to buy 353,000 sf in multiple office buildings and a parking garage for $53 million in May 2013, then sold 319 A St. last summer for $12.5 million while the garage brought $56 million alone in an early January purchase by Multi-Employer Property Trust and advisor Bentall Kennedy. Those two assets had cost $42 million in the May 2013 package and all of those deals which C&W brokered were initially unveiled by Real Reporter. An ornate 13-story building across from Post Office Square’s lush Norman B. Leventhal Park, Ten Post Office Sq. was sold on behalf of Broadway Real Estate Partners which had paid $108 million for it in April 2006, a deal also processed by the C&W Capital Markets leadership comprised of Robert E. Griffin Jr. and continued on page 126

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T H E A N N U A L R E V I E W 51

Every deal has a story. Nobo dy tells it more insightful, astute or pu nctual.

100 CAMBRIDGE ST., BOSTON MA

Finance, Sales Experts Join Forces at Colliers

BY JOE CLEMENTS OSTON — Moving and restructuring usually involves commercial real estate investments for the Colliers International Capital Markets division, but this past season those came in the relocation of four NAI/Hunneman Commercial Co. professionals to a revamped department led by debt and equity veteran and principal David Douvadjian in a conscious bid to meld the acquisitions and financing operations, an approach that did foment multiple assignments on both sides of the aisle in 2014. “The union of these two divisions into a singleservice offering will truly maximize value for our THOMAS J. HYNES JR. clients,” Douvadjian said in a prepared explanation upon the February announcement of Scott Dragos and Douglas Jacoby coming over to lead the sales platform while colleagues Michael McLaughlin and Lyndsey Ferreira took Associate and Assistant roles. They joined Senior VP Gail McDonough Assistant VP Anthony Hayes and Associate Tim Mulhall from the existing team to market “commercial properties of all types,” a mission they certainly fulfilled in 2014. The Dragos/Jacoby quartet did still have unfinDAVID DOUVADJIAN ished listings to complete under the NAI/Hunneman flag in keeping with industry custom while drumming up new business at Colliers and also seeing existing exclusives there to conclusion , among them the Franklin Street portfolio acquired by Zurich Alternative Asset Management in downtown in early January that brought Charles River Realty Investors and National Development $27.6 million for the three-building, 67,000-sf assemblage (see related story, page three). KEVIN PHELAN “We had a good year and represented some really nice properties,” Jacoby tells Real Reporter, acknowledging a switch can be challenging but praising the in-place staff for helping to get the process ramped up quickly enough to get a $270 million commitment for 100 Cambridge St. from state-affiliated MassDevelopment by Intercontinental Real Estate Corp. The swap that SCOTT DRAGOS finally closed this spring after being initially unveiled by therealreporter.com in late December was counted in the state’s coffers as a 2014 event. Brighton-based Intercontinental beat a fierce roster of competition for the 22-story, 600,000-sf high-rise including overseas money from as far a field as China. The tower was created from an environmentally condemned state office building into a LEED-rated facility that has discounted office space continued on page 128 DOUGLAS JACOBY

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Developing Situation for Hamilton Co. A BY JOE CLEMENTS LLSTON — Underscored from $500 million of CRE purchased locally since 2009—and marking 60 years in business last year while cresting $1.5 billion of assets—the Hamilton Co. has been on a roll this decade, increasing its platform to new heights. But while “things have never been better,” according to President Carl A. Valeri, the iconic group led by octogenarian Harold Brown is backing off its frenetic investment platform and turning towards development, a strategy many peers are also embracing as seller expectations ramp upwards on the investment scene. Already constructing 30 apartments in Boston’s Fenway that broke ground in 2013, the group founded in 1954 is now proposing another 48 next door to its Packard’s Corner headquarters. Another four dozen are on the dais in the South End and Valeri tells Real Reporter those ventures are just the beginning, with a parcel being cobbled together in Somerville’s Union Square while other sites throughout Boston and the inner suburbs are being reviewed for potential. “We are sitting on acres of land right here and we feel we can put them to good use,” Valeri says in reviewing the 2014 season where the spending spree did cool and a dedicated refinancing program undertaken over the past three years was winding down after securing over $200 million of fresh debt, often at steep rate discounts compared to loans being replaced. Numerous lenders benefitted though Valeri has an affinity for Brookline Bank and KeyBank, the latter institution delivering the lion’s share of some $20 million issued in 2014. The bulk of that came through Freddie Mac, so enamored the plucky company is rated a “premier customer” of the agency giant which has been much maligned but not by Valeri. “KeyBank and Freddie Mac have really been ahead of the curve,” he says. “I give them a lot

HAROLD BROWN AND CARL A. VALERI AT HAMILTON CO. 60TH ANNIVERSARY, BOSTON MA

of credit for being able to go up against the life companies.” Todd Goulet and John Shea are Hamilton’s loan officers at KeyBank getting a shout-out along with a former colleague of

“

When it starts to get like this, the best idea is to keep your powder dry and sit back for the right opportunity to come your way.

”

CARL A. VALERI President, Hamilton Co.

theirs who left the institution for rival Brookline Bank, that being Robert Brown (no relation to Harold). “Brookline Bank is a very capable bank,” says Valeri. “They are real brick-andmortar guys and very responsive and understanding to what we are trying to achieve.”

One sobering note for the lending legions— Hamilton is taking on a new approach of limiting its debt accumulation, instead engaging a mix of all-cash deals and using select lines of credit. “It is more efficient than borrowing from the banks, and then you sit back and let the cash flow pay off the lines,” he says, adding that the formula is aided by ongoing development and property upgrades in the portfolio, with hundreds of thousands of dollars saved on energy efficiency and other conservation measures. As a result of that and the white-hot rental market, “we are a cash-flowing engine,” says Valeri. There were a few select acquisitions this past year, among them a small retail building near Government Center bought through NAI/Hunneman for $2.2 million in an all-cash pact for 3,050 sf (see story, this publication). A strategic purchase was made of 1117 Commonwealth Ave. in Allston of a tiny 2,500sf retail building for $900,000 that gives Hamilton Co. control of the entire block just around the corner from the firm’s Brighton Avenue base. continued on page 127

RIGHTON — As the tiny monument a few doors down from Rockland Trust Co.’s branch here attests, Brighton Center has a storied history, that placard commemorating General George Washington himself’s visit to the cattle

REAL REPORT

yards back in the day. Yet the future is on the forefront in these thickly setCHRISTOPHER ODDLEIFSON tled parts now, with New Balance Corp.’s office and sports mega-complex up Market Street and expansion of Harvard University at Allston Landing just past the sneaker company’s $500 million project each tent poles of a quickly evolving district, and one Rockland Trust finds itself after completing its $130 million acquisition of venerable People’s Federal Savings Bank, a deal unveiled last summer which recently resulted in signage changes et al in the eight branches eagerly acquired, four of them in Boston including an Allston unit

and the flagship operation at the corner of Market and Washington Streets in Brighton Center where tens of thousands of people converge daily. “It is an exciting time to be in Allston-Brighton,” Rockland Trust Co. Commercial Lending Director Gerry Nadeau told Real Report recently in pointing to the diverse, vibrant borough where close to ROCKLAND TRUST BRANCH, BRIGHTON CENTER MA $1 billion is under construction or on the draw- any community (Somerville tops) in the markets ing boards. Perhaps no surprise given three where Rockland Trust is focused, the institution major colleges lie within its borders, Nadeau having grown over the past quarter century says Allston-Brighton has the second highest from a force in southeastern Massachusetts to concentration of millennials per deposit slip of continued on page 130

Photo: Derek Szabo

Rockland Trust Finds Home in Hub B

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ACTIVELY ACQUIRING

Urban & Suburban linearretail.com

UNIVERSITY APARTMENTS, WOBURN MA

Cornerstone Cements Clients for CRE Mortgage Brokering BY JOE CLEMENTS EXINGTON — Enjoying their best season ever, the professionals at Cornerstone Realty Capital made a borrower’s day at least once per week in 2014 to provide acquisition, construction and refinance funds for clients in the boutique mortgage brokerage firm’s target area of Massachusetts, New Hampshire and Rhode Island. “The last couple of years have been fantastic; 2014 was a hair ahead of 2013, but both have allowed us to continue growing,” founder and President Paul Natalizio says in estimating upwards of 30 different lenders were engaged as CRC shopped assets seeking financing last year, its strategy to pit one debt provider against the other and secure the most favorable terms possible for their clients who include some of the area’s leading CRE owners and operators. Having marked its 10th anniversary in 2014 when 74 loans were closed, Lexington-based CRC has experience in nine different product types ranging from golf courses, hotels and marinas to industrial and self storage plus mixed-use, office and retail, the latter accounting for multiple deals of note in 2014 across New England, although multifamily remains the category where CRC has distinguished itself in a PAUL NATALIZIO sector teeming with formidable competition. One repeat customer who secured $12.3 million to buy 92 apartments in Woburn last July is Somerville investor Philip Privitera, his 10-year, fixed-rate debt in the deal coming from Cambridge Trust Co. to finance the $16.3 million purchase negotiated by CBRE/New England. “Cornerstone’s assistance throughout this complex transaction was exceptional,” Privitera said in a statement after the garden-style University BRETT PAGANI Apartments were acquired by his company that has multiple apartment buildings throughout the inner suburbs, in this case taking on the asset from True North Capital Partners, another prolific value-add investor targeting older apartment communities whose founder Jeff Bruce also happens to be a grateful client of one Cornerstone Realty Capital, with Natalizio and Pagani having procured a $10.5 million mortgage after the Concord-based firm bought the University Park asset for $13.0 million on the final day of 2012. Loan proceeds enabled True North to institute a rapid upgrade of University Apartments at 48 Lake Ave. prior to Privitera’s arrival. True North then bought up a newly constructed apartment community in Wakefield from the Richmond Co. of Wilmington, paying $25.3 million for that 114-unit property at 105 and 109 Hopkins St. with a $19.5 million Fannie Mae loan selected by CRC from Walker & Dunlop. In a six-degree of separation moment, the buyer of Richmond’s similarly new residential project in Manchester, NH, got its $14.1 million loan through the CRC conduit, with those taking that route spoken to all claiming to have won the lowest rates possible and favorable terms including partial or total non-recourse allowances. That can be a non-starter for the banking industry which dominates commercial lending in the region and was a consistent source of loans for CRC clients last year even as CMBS funds fought to grab their share of the pie along with life companies and multifamily driven Fannie Mae and Freddie Mac. Natalizio agrees that the sponsor needs to be especially reputable for recourse relief but maintains many CRC clients earn those stripes while declining to identify specific borrowers. That is left up to the clients, who seem eager to comply, among them True North’s Bruce. continued on page 133

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C&W Brokers Brady Sullivan Buy M

BY JOE CLEMENTS ANCHESTER, NH — They literally do not get any bigger than this one, at least for commercial real estate in New England’s better half, as hometown heavyweight Brady Sullivan Properties added to its Queen City kingdom by purchasing City Hall Plaza for $19.7 million from a Texas REIT this past summer, getting in return a 20-story, 219,000 sf structure deemed the tallest CRE building north of metropolitan Boston at 275 feet. Cushman & Wakefield was again in the thick of the activity through its Manchester office that is led by Thomas P. Farrelly, Denis Dancoes and Sue Ann Johnson, that trio advising seller TIER-REIT in THOMAS P. FARRELLY its $19.7 million exchange of City Hall Plaza at 900 Elm St. on the Queen City’s main thoroughfare. C&W also procured BSP, which was on a buying spree in 2014, picking up over 800,000 sf of commercial product. City Hall Plaza DENIS DANCOES accounts for 219,000 sf of that increase, its nearest rival on the height issue being the new owner’s 20story tower at 1000 Elm St., the difference so scant that there has been an ongoing debate about which is actually larger. SUE ANN JOHNSON “No question they now own the tallest tower north of Boston,” Farrelly says, and since BSP had been the chief promoter of theirs having a loftier level, the lingering debate is expected to fade. More lasting is 900 Elm St. becoming part of a BSP Manchester office portfolio now cresting three million sf,

1155 MAIN ST., MANCHESTER NH

CITY HALL PLAZA, MANCHESTER NH

1000 ELM ST., MANCHESTER NH

with other addresses being 650, 1230 and 1750 Elm St. The City Hall Plaza conquest was “a deal for the ages” in New Hampshire CRE circles, says native Farrelly who has been practicing in the town since before 900 Elm St. existed, that coming on line in 1992 amidst one of the state’s worst fiscal periods ever after a majority of New Hampshire’s top banks—many on Elm Street— were shuttered by the federal regulators. There have been ups and downs into the new millennium, most recently the 2008 recession, but Farrelly expresses optimism southern New Hampshire is on the mend. A big coup occurred last year when Anthem Blue Cross Blue Shield took 45,000 sf at 1155 Elm St., an eight-story building owned by Farley White Interests. “That is a real game changer for downtown,” says Farrelly, whose team orchestrated the lease. At 900 Elm St., the tenant roster includes the likes of Citizens Bank and McLane Law Firm, a well-known regional prac-

tice filling nearly 75,000 sf. BSP Director of Commercial Real Estate Charles Panasis cited the asset’s tenant roster as one attraction, and says of the investment, “City Hall Plaza is a high-end gem in the city of Manchester and we are thrilled to expand our footprint.” Company namesake Arthur Sullivan agrees that “this is a very exciting acquisition for us” and predicts the flexible 55,000 sf available will get attention. “For small businesses or large corporations, it’s the perfect fit,” he opines, and benefits from a LWP atmosphere that includes a vibrant business district, several hotels and the Verizon Center arena and minor league baseball park. BSP said after the purchase it intends “to keep things status quo” of 900 ARTHUR SULLIVAN Elm St. while renovating the fifth floor by adding windows and upgrading its common areas. Occupancy was approximately 90 percent when purchased, several of the firms long-term denizens, with one document indicating asking CHARLES PANASIS rents in the upper sphere for New Hampshire of $23 to $25 per sf. More than a dozen bidders were in the final stages, according to Farrelly, who says there were four times as many pursuing City Hall Plaza at the outset. Supporting the New Hampshire crew in harvesting City Hall Plaza were the Capital Markets team for New England led by Robert E. Griffin Jr., Edward C. Maher Jr. and Matthew E. Pullen. Keeping that status quo meant retaining Farrelly, Dancoes and Johnson as exclusive leasing agents. As for that buying jag, BSP in 2014 acquired 3000 Goffs Falls Rd. and 1050 Perimeter Rd. in Manchester, plus The Center at Keene and Colony Mill in Keene. The Keene properties were secured last winter for a combined $4.5 million. Renovations are planned to the aging mill facilities at 222 West St. and 149 u Emerald St., aka the Center at Keene.

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125 CAMBRIDGEPARK DR. CAMBRIDGE MA

150 CAMBRIDGEPARK DR. CAMBRIDGE MA

OFFICE DEALS 2014 continued from page 3

Among industry professionals well aware of the capital flow from abroad and throughout the US into the Bay State is Christopher Angelone of CBRE/New England’s Capital Markets group, a contingent that did reap Blackstone benefits as agents for 125 and 150 CambridgePark Dr. in Cambridge, an exclusive listing leading to a $163 million sale of those office buildings totaling 470,250 sf acquired by CBRE Global Investors. CBRE/NE was also inundated back in Boston when hired by MassMutual as agents for ROBERT BORDEN 3 Post Office Sq. and 24 Federal St., a pair of Class ONE MEMORIAL DR., CAMBRIDGE MA B office buildings with ground floor retail in the heart of the Financial District. “That was the deal to us where you really came to understand the worldwide demand today VANCE MADDOCKS for well-located Boston properties,” says Angelone. “Foreign money chased this very hard along with domestic groups, pension funds, private capital—you name (the funding source), we had interest.” JAMES MCCAFFREY on the $2.05 billion The ultimate winner was Aegean Capital, a New portfolio sale by Blackstone in 2014 York-based investor who paid $47.1 million. CBRE/NE separately processed a three- take a minority stake as operating partner, an building portfolio trade in Boston’s Downtown arrangement the two firms also made in buying Crossing on behalf of Synergy Investments, with 38 Chauncy St. and 55 Summer St. from DivcoWest taking on 71 to 77 Summer St. in a Brickman Associates, two separate 2014 trans$20.7 million pact where the seller agreed to actions handled by C&W. Brookline Bank fueled the Summer Street acquisition with $21.4 million in financing. Yet another CBRE/NE Boston listing fetched $10.8 million when the office asset at 40-44 Bromfield St. was purchased by local investor William J. Thibeault, a trade in which the brokerage group advised seller King Street Properties and procured Thibeault for that 42,500-sf building which last went for $9.67 million in Feb. 2006. The new owner later secured financing of $8.25 million from East Boston Savings Bank. Yet another CBRE/NE assignment on Bromfield Street was concluded when Merchants National Properties of New York City plunked down $7.44 million on 43-51 Bromfield St. and adjacent assets totaling 32,000 sf, with a Dupont family trust retaining CBRE/NE for that listing. Between downtown and the suburbs, Angelone puts his team’s final 2014 tally at $1.02 billion for the industrial, office and retail activity compared to $681.5 million recorded in 2013 handling the exact same number of trans4 LIBERTY SQ., BOSTON MA

“

It was a generational trade that brought some exciting new players into the city, some absolute global heavyweights who were not here before.

”

actions. That puts the entire CBRE/NE Capital Markets crew at $1.84 billion for 2014 when the contributions of the Multifamily unit are factored into the total. “It was a good year for our team,” says Angelone. “We were able to represent many great clients and their buildings and we completed the sale of some very important properties in the market.” One satisfied customer was CBRE Global, the Los Angeles firm which took Boston and Cambridge by storm in 2014, with other conquests including Discovery Office Park in the latter community’s Alewife District (negotiated via Eastdil) and 100 High St. in downtown Boston, that 28-story tower flipped by Oxford through C&W after the client had tied it up as part of the Blackstone portfolio exchange (see story, page 4). On the CambridgePark Drive transaction that was 94 percent occupied when acquired, CBRE Global announced it will upgrade buildings systems, pursue a LEED certification and incorporate a “five-star worldwide service and amenity program” to the 1980’s-era buildings located on a corporate campus. “Cambridge is a desired infill location because it is home to numerous tech and biotech firms seeking an urban location and proximity to major research institutions,” says CBRE Strategic Partners President Vance Maddocks, adding that, “both the metro and submarket are expected to see continued improvement in absorption and rental growth rates over the next five years.” Joining Angelone and CBRE/NE group co-leader William Moylan on the exclusive metro assignments were Jessica Dowd, Charles Kavoogian, Bruce Lusa and John Meador. Angelone was unable to discuss another interesting sale in Boston, that being the $16.4 continued on page 57

28 STATE ST., BOSTON MA

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OFFICE DEALS 2014 continued from page 56

million purchase of 172 Tremont St. in Boston by a New York investor, a quietly marketed deal that closed at mid-year. The seller was Millennium Partners, a well-known developer of several downtown towers. Registry of deeds records show the property closed on an all-cash basis. Exchange of the 17,000-sf building that Millennium paid $4.0 million to land in Oct. 1999 was detailed prior to closing by Real Reporter in an early June article where neither the broker nor parties involved responded to inquiries. A plan was filed in late 2014 to construct a 31-unit residential condominium on the site, a use many had predicted in the prior Real Reporter coverage. The primary Blackstone disposition of 2014 was the cornerstone of an eventful year at Eastdil, details of which McCaffrey SEAPORT CENTER, 451 D ST., BOSTON MA and other team members were reticent to discuss regarding specific assignments as part of a corpoGINA BARROSO rate policy discouraging such discourse. McCaffrey does acknowledge the rarity of such a major piece of any urban center changing hands in one fell swoop, that portfolio the capper on a three-year program by JEFFREY BECKER Blackstone to sell off vast Bay State holdings that had made the firm Boston’s dominant landlord in both the downtown and suburbs. Prior Blackstone trades for which C&W, Eastdil and HFF were among the listing GREG LARSEN agents on the past two years included record pricing and deal size for multi- FENTON BUILDING, BOSTON MA ple transactions inside Route 128 while Eastdil was the advisor in 2013 when a 50 percent share of One Post Office Square was secured by ROBERT TITO SR. Blackstone’s equal partner, Morgan Stanley, an exchange priced in the $275 million sphere that helped kick off the firm’s aggressive selling campaign. Blackstone reaped $343 million in its sale of 28 State St. this past year as well through Eastdil, and that group was engaged to trade a 45 percent stake in Rowe’s Wharf, a recapitalization that again involved Morgan Stanley, with that firm already holding the remaining position in the waterfront mixed-use complex (see story, page 6). Interacting on a regular basis with overseas clients, McCaffrey says the allure of investing in Boston comes from a number of factors, including the highly regarded academic and healthcare institutions which are recognized globally and have made the city a leader in the life sciences industry, coupled with modernization programs from overhauling Logan International Airport and opening of the Ted Williams Tunnel connecting the airfield with downtown and the Seaport, plus depression of the Central Artery. continued on page 58 24 FEDERAL ST. AND 3 POST OFFICE SQ., BOSTON MA

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OFFICE DEALS 2014 continued from page 57

“It is the world-class airport and the infrastructure invested throughout Boston has also made a huge difference,” says McCaffrey, further pointing to the advent of new age and technology companies to the Financial District tenant mix, welcomed additions after the corporate, financial services and legal sectors were shrunk by the 2008 recession. “It all makes sense, and over the last 12 to 18 months, you have really seen this activity spill over into the commercial real estate space.” Eastdil’s 2014 resulted in $11.7 billion of volume involving between 55 and 60 transJESSICA DOWD actions, according to McCaffrey who explains the firm does not break its business out between capitalizations, equity sales and structured financing assignments. In winning the coveted CBA Sale of the Year desigCHARLES KAVOOGIAN nation, the brokerage professionals were lauded for handling such a massive assemblage of core properties in an exchange complicated by acquisition of partnership interests, a leasehold agreement and intricate financing eleJOHN MEADOR ments requiring the assumption of in-place financing and sourcing of three acquisition loans totaling in excess of $840 million, with Eastdil’s debt and structured finance division overseeing that consideration. Eastdil recipients of the CBA award along with McCaffrey include Brian Barnett, Peter Joseph, Sarah Lagos and Christopher Phaneuf plus Molly Padien-Havens and Steffan Panzone. Accepting for C&W at the March awards gala were Robert E. Griffin Jr., Edward C. Maher Jr. and Matthew E. Pullen. Deemed the largest stand-alone CBD portfolio sale in Boston’s history, the holdings that were 83 percent leased when swapped were highlighted by the recently overhauled 225 Franklin St. and One Memorial Dr., a 369,000-sf office building overlooking the Charles River in Kendall Square so prized that it went for more than $1,000 per sf ($1,097), a record in the market. “It was a generational trade that brought some exciting new players into the city,

CAMBRIDGE DISCOVERY PARK, CAMBRIDGE MA

172 TREMONT ST., BOSTON MA

some absolute global heavyweights who were not here before,” recounts McCaffrey. “That has been great to see and shows how popular Boston is today.” According to C&W’s Griffin, participation in the Blackstone deal was “one for the ages” and contributed to another stellar season for the Capital Markets team (see story, page four). The group got another plum when Oxford Properties retained C&W to divest 100 High St. after picking it up in the Blackstone portfolio. Although there was never any reason provided for parcel-

“

We were able to represent some great clients and their buildings and we completed the sale of some very important properties in the market.

”

CHRISTOPHER ANGELONE assessiing CBRE/NE’s 2014 investment sales season. ing off the 562,000-sf tower, some observers have speculated the asset was seen as more of a value-add play than trophy investments that Oxford appeared to be favoring in the other buildings, with those secured in partnership with JPMorgan save for 125 Summer St., owned outright by Oxford. The sale of 100 High St. to CBRE Global was first unveiled by therealreporter.com in late August 2014. As in the case of Eastdil, C&W was active

throughout the urban core in 2014, with other office building sales of note including 399 Boylston St., 38 Chauncy St. and 10 Winthrop Sq. in Boston and 620 Memorial Dr. in Cambridge, those exclusives helping support a prolific campaign in the suburban arena as well and in the industrial, multifamily and retail markets (see story, page four). Eastdil’s year hardly stopped at Blackstone’s door, either, although the Capital Markets troupe was involved in that group’s separate sale of 28 State St. to Rockefeller Capital, a Financial District office building that fetched $343 million—or an impressive $600 per sf— for the 572,000-sf tower which is located adjacent to Government Center and across from Faneuil Hall. Joseph declined to discuss that transaction in detail. Across the river in Cambridge, Eastdil represented Blackstone and procured Beacon Capital Partners in that firm’s purchase of One and Ten Canal Park, the former a 105,000-sf building constructed in 1988 that traded on March 25th at a consideration of $44.2 million followed a month later by the $46.2 million purchase of Ten Canal Park, that an 111,000-sf building constructed in 1983. A building Eastdil is quite familiar with at 451 D St. in the Seaport District was sold for $169.7 million to a partnership of Commonwealth Ventures and Meritage Properties. It was the second straight time the Eastdil team had orchestrated the 463,000-sf office building’s trade, having advised former owners Related Beal and Rockpoint Group when they sold it to Shorenstein in May 2012 for $115.0 million. Other completed 2014 assignments credited to Eastdil were 31 Milk St. in which the team aided Lincoln Property Co. in finding a new owner there in Aegean Capital, as the eventual buyer of nearby 24 Federal St. and 3 Post Office Sq. emerged the winning suitor for a $24.2 million purchase of the Milk Street asset that closed in February. Speaking of Lincoln, Eastdil separately had an exclusive to divest 40 Court St. on behalf of Brickman Associates and LPC stepped to the fore with a $31.0 million acquisition completed in May fueled by a $20.5 million mortgage from Berkshire Bank. It might seem like there would be nothing left after all those agreements, but plenty of other Boston and Cambridge office buildings continued on page 59

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were also put on the block in 2014, with JLL advising Synergy Investments in its $8.8 million sale of 4 Liberty Sq., a boutique property the investor had bought for $8.1 million in Jan. 2008. A New York firm, Abramson Brothers, bought the 26,000-sf office building with a $4.8 million mortgage from Manufacturer’s Trust. The Leventhal family of Beacon Capital Partners fame paid $9.85 million in another JLL Hub listing of the Fenton Building on Beacon Hill, with owner/occupant Massachusetts Teachers Association joining other non-profits in the neighborhood by cashing out on their real estate, a trend that has been prevalent during the past three years. The Fenton Building that went for $9.85 million is comprised of 16, 18 and 20 Ashburton Pl. Eastern Bank financed the buyers with $8.4 million in what reportedly will be a conversion to residential. Members of the JLL Capital Markets team involved in the urban activity include Managing Director Jessica Hughes, Vice Presidents Robert Borden and Matthew Sherry on a team led by Frank F. Petz. The group is presently in the final throes of selling another Boston office building in One Milk St. with Real Reporter unveiling this past week that the 38,500-sf property has been tied up by another Gotham-based concern, Midwood Investment and Development, with pricing anticipated in the $19 million range—eclipsing $500 per sf. 20 ASHBURTON PL., BOSTON MA DTZ’s Capital Markets Group took on anothExplaining that the buyer is an active player er Boston listing in 2014 for Synergy Investments where KS Partners emerged the in the metropolitan Boston CRE scene, most winning bidder to buy 141 Portland St. in a recently buying the House of Blues Building in $7.2-million exchange that closed in mid- the Fenway, Tito says that “44 School St. was September in an all-cash purchase. The DTZ not only an opportunity to continue their acquiteam of David J. Pergola and Brian Doherty han- sition goals, but also to invest in what is dled both sides of that listing during a year undoubtedly one of the hottest commercial real when the firm completed a series of suburban estate sectors,” adding that, “44 School St. is trades. Synergy had owned 141 Portland St. strategically located within walking distance to since paying $3.5 million in Feb. 2006 for the many development projects, including the 45 Province Street Condominiums and Millennium office/retail asset that totals 22,250 sf. NAI/Hunneman Commercial Co. got in on Tower, which will only increase the property’s the act last year as well, with Executive Vice future value.” Tito further relays that Tisoped came to the President Robert Tito Sr. joined by Senior VP Jeffrey Becker and Associate Gina Barroso ownership “with an aggressive, unsolicited offadvising the owners of 44 School St. on their market offer that made it almost impossible to $20.0 million sale of that 60,475-sf Class B refuse,” terming the result “a win-win for all office building to New York-based parties involved,” including the prior owners who had held 44 School St. since paying $10.3 developer/investor Tisoped Corp.

million in Aug. 2004. The building at the time of its latest sale was 99 percent leased to office and retail tenants, among its attractions being proximity to all major subway lines and the commuter rail. In another 2014 urban sale, Tito and Barroso were joined by Senior VP Greg Larsen as exclusive agents of 146 Mount Auburn St. in Cambridge, that a 4,150-sf office/retail building in Harvard Square that traded for $1.8 million. NAI/Hunneman advised the seller, Almark Realty TR, while Tom Johnson of Hammond Real Estate was agent for the buyer, Theodore Galante. “The property’s unique mix of retail and office space set in a prime location within Harvard Square made it very attractive to the investment community,” Tito relayed after that mid-summer closing, with RBS Citizens Bank financing the deal via a $902,500 mortgage.u

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1.08 million sf leased through 2029 to Vertex. Documents filed by SNH indicate the tenant is renting below market now at $62.50 per sf and with escalations of $5 in years six and 11, the lease will average out to $67.50 per sf over its entire existence. At maturity, that equates to $10.11 less than the 12-year-average projected for similar lab/office space in Boston and Cambridge, according to SNH estimates pegging that figure at $77.61 per sf. CBRE/NE negotiated both sides of that award-winning agreement, with Andy Hoar, ANDREW HOAR Timothy Lyne and Timothy Howe exclusive agents for Fan Pier and Greg Lucas and Adam Brinch advising Vertex. In announcing its deal with Fallon and Cornerstone, SNH President and COO David J. Hegarty TIM LYNE lauded Fan Pier as a “stateof-the-art property ideally located in Boston’s fastest growing downtown submarket and one of the nation’s top investment markets” and explains it was considered “a unique opportunity to further TIM HOWE diversify SNH’s portfolio and increase our exposure to the medical office segment.” Having Vertex and its 1,300 employees relocating from 10 buildings in Cambridge added to SNH’s comfort with the asset, Hegarty relays. “SNH believes Vertex represents a strong credit tenant,” he says of a company boasting an equity market capitalization of $19.0 billion when the sale was consummated. The new stewards further insisted the hefty price tag will not impact its financial health in an

8-K regulatory filing where it also reported receiving a five-year term loan for $800 million from Jeffries Finance and Wells Fargo Bank minus pre-payment penalties and with an interest rate of LIBOR plus 140 bps. SNH has an existing $750 million revolving credit facility it says will provide further flexibility. The REIT owns assisted living communities, MOBs, nursing homes and wellness centers across the US. As to Fan Pier, which cost approximately $682 per sf to land, SNH says in its SEC filings that NOI is expected to average 7 percent per annum aided by VERTEX PHARMACEUTICALS HEADQUARTERS AT FAN PIER, BOSTON MA parking revenue from a 740-space garage open to the public along with says in declaring it “one of the premier mixed50,000 sf of street retail pegged for such uses use developments in the country.” HFF’s is hardly a stranger to the Seaport as banking, daycare and restaurants. Officials District on both the capital also surmise SNH capital expenditure exposure markets and debt platis limited for a newly constructed building bearforms that delivered $2.7 ing triple-net lease covenants for 15 years billion and $5.0 billion of under which the REIT is only responsible to fund volume in 2014. The capital for roof, structure and certain other Capital Markets team in “long-lived assets.” 2012 was listing agent for SNH also embraces the changes occurring Brickman Associates in its in Boston’s Seaport where office rents have $106.7 million dispatch of escalated by 30 percent alone in the past 12 GREG LUCAS a 362,550-sf office portfomonths and now rival that of the Back Bay and lio in the Fort Point Financial District while a tide of new construcChannel section acquired tion sweeps into the 1,000-acre expanse that by DivcoWest in securing was for over a century defined as Boston’s 300 A St., 313 Congress working port. Now, multifamily, office and retail St., 330 Congress St. and development are all underway, the momentum 51 Sleeper St. HFF then greatly enabled by developer Joseph F. Fallon advised that firm in a flip of and Cornerstone finally being able to get the the latter asset, with TIAAFan Pier project moving following several failed ADAM BRINCH bids from their predecessors dating back a CREF paying $60.2 million—$400 per sf—to quarter century. “This transaction is a true vali- take on the 150,375-sf Class B office property dation to the exceptional impact Fallon and that is across the street from Fan Pier. HFF came Cornerstone have made on the city of Boston full circle on the Brickman assignment this wincontinued on page 64 through the development of Fan Pier,” Coleman

OFFICE J TOP GUNS 2014 STATS ‘14

BUYER 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

OMERS JP Morgan Norges Bank Invt Mgmt Senior Housing Props Tr MetLife DivcoWest Rockefeller Group Mitsubishi Estate Synergy RE Services GreenOak Meritage Properties CV Properties CBRE HTA (REIT) Jamestown, L.P Morgan Stanley BVK Beacon Capital Partners Blackstone Charles River Realty Investors WP Carey (REIT) Farallon Capital Partners Anchor Line Partners KS Partners LLC Deutsche AWM - US

CAPITAL GROUP Institutional Institutional Institutional Public Institutional Equity Fund Private Public Private Equity Fund Private Private Institutional Public Institutional Institutional Institutional Equity Fund Equity Fund Equity Fund Public Equity Fund Private Private Institutional

ACQ. AMT. (IN $M) 2,337.5 1,812.5 1,277.2 1,125.2 562.0 514.0 343.3 343.3 287.5 200.0 169.8 169.8 163.0 148.1 136.0 124.8 123.4 122.5 117.0 110.3 103.0 100.0 100.0 97.7 94.9

BOSTON OFFICE STATS # PROPERTIES 5 3 3 1 1 5 1 1 4 2 1 1 1 1 1 1 1 2 1 2 2 1 1 3 1

OFFICE Qtr

Volume

13H1

$1,621,790,472

13H2 14H1 14H2

YOY % Change # of Props

Avg $/Sqft

Volume

Total Units 7,803,666

$205

$1,467,446,958

$3,356,299,910

10,595,768

$348

$928,507,600

$3,145,302,265 $5,781,122,889

94% 72%

67 86

9,588,771 15,957,122

$337 $334

$672,497,934 $448,536,450

* Price per Unit/SqFt calculations are rolling quaterly averages

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the unaffiliated firms often have over their larger counterparts. “It cannot be said enough that all real estate is local,” said Sean Kenealy, president of Quincy-based Key Realty. “You’ve got to know the markets and be part of the fabric of the community, and that’s what we’ve done in the communities we serve for the past 40 years. We become the real estate department for a lot of small to mid-sized businesses and developers. What happens is that you’ll lease to a group (starting a company) 500 square feet, then they’ll take 5,000, then 25,000, then buy a building. So we become a NEIL DENENBERG team member in a lot of local businesses.” Boston Realty Advisors founder and principal Jason S. Weissman points to three factors for his firm’s spectacular yearover-year growth, including hiring experienced CRE SCOTT HUGHES professionals from other firms, an inclusive and collaborative marketing program, and what he deems foremost of the

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troika—independent ownership. “We don’t have to report to shareholders because we’re not publicly traded, so we can make decisions that are very much in line with what our clients need,” Weissman conveys. That independence allows BRA to implement a marketing process and other policies larger firms might eschew, asserts Weissman in citing a prime example a practice many national concerns are hardly thrilled over enacting. “We have a full co-broke policy on all of our sales, so we don’t sequester listings just for our firm, because we’re about maximizing the value

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It cannot be said enough that all real estate is local. SEAN KENEALY Key Realty principal

to the seller and also to the landlord,” says Weissman. “We also have an aggressive outreach program to find the outlier buyer, to find international buyers.” BRA principals annually attend MPIM in France as well as other international trade shows, and the firm also markets its properties on Chinese websites. BRA added a slew of experienced CRE professionals in 2014 wooed from other Boston area firms, including partner Nicholas Herz to the Capital Markets group (formerly of Colliers and CBRE/NE); Whitney Gallivan, partner, retail division (HFF, WS Development); Senior Associate Jennifer Price and Associate Jaime Russell, Associate—both AEW Capital Management alum—as well as Associates Chris Donato, Tyler Griffin and Ben Karp. The combination led to a year where BRA more than doubled their 2013 output of $130 million in sales across all food groups, with the multifamily team of Sower, Weissman, Andrew Herald and Price accounting for nearly $205 million of the $265 million total. The largest transaction of the year was the $56 million purchase by National Development and ASB Real Estate Investments of the Element, a 100-unit Class A apartment building that is one of a trio of properties in the Green District in Allston developed by the Mount Vernon Co. Other high-

lights for the multifamily team included the transformational sale of the Unitarian Universalist Association’s Beacon Hill holdings at 25 Beacon St. and 6-7 Mount Vernon Pl. ($23.6 million to DLJ Real Estate Capital Partners, Sea-Dar Real Estate and CNW Capital Partners LLC of Boston) and 39-41 Mount Vernon St. for $11.5 million to Daniel Rene Capital Partners and Xavier Giraud, an institutional investor JOHN EYSENBACH from France. BRA’s retail team, led by senior partner Michael d'Hemecourt, closed a number of retail deals in 2014, including the $13.25 million sale of the 8,500 sf 171 Newbury St. ($1,553 psf) in an all-cash transacCRAIG JOHNSTON tion by Bernard H. and Suzanne Pucker to a Dutch concern. The asset formerly housed the Pucker Gallery and Clark’s Shoe currently fills 2,650 sf at the location. d'Hemecourt, Sower and Weissman handled the sale, then completed the 1031 exchange for the Puckers by brokering the acquisition of a CVS at 188 Linden St. in Wellesley for $11.3 million. BRA also handled the sale of 40 Berkeley St., an 80,000 sf hotel/hostel, by an affiliate of Riverside Properties to the Mount Vernon Co. for $17.2 million. Key Realty enjoyed an outstanding year, recording a hearty $68 million in transactions in Boston and on the South Shore. The largest deal (in two separate transactions) was the $19 million sale of four multi-tenanted) retail buildings totaling 155,000 sf, which longtime client Atlantic Management Corp. deeded to Parkingway Q Business WHITNEY GALLIVAN Center LLC, an entity managed by Andrian Shapiro, with Kenealy representing both the buyer and seller (see related story, page six). Tenants in the buildings include Discount SelfStorage, Hollywood Tan, the International House of NICHOLAS HERZ Pancakes and PETCO. Kenealy became acquainted with Shapiro when he represented investor Yoram Katz (brother of Ranaan Katz of RK Centers) in the sale of 1505 Commonwealth Ave. in Brighton to Shapiro and partner Alex Matov for $7.5 milcontinued on page 62

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lion. The group will renovate the five-story office building into 80 apartments. Kenealy then coordinated a second exchange between the two parties, with Katz discharging a 21,600-sf retail strip center at 1500-1530 Hancock St. in Quincy to Shapiro for $4.12 million. Key Realty facilitated a number of other commitments, including the $7.5 million trade of a 132,000-sf office building at 1515 Hancock St. in Quincy which Kilem Management Corp. traded to John McGrail of the Mayo Group; Braintree’s Wood Road Business Center, a two- 140 AND 150 WOOD RD. (WOOD ROAD BUSINESS CENTER), BRAINTREE MA building, 95,000-sf office property harvested by KS Partners to BR O’Connor Corp. at a consideration of $4.6 million; the sale of 10 Granite St. Quincy, a commercial office condo XS Brokers Insurance Agency CHRIS DONATO Inc. dealt to Anodyne Corp. for $2.6 million; and the Broadway Electric portfolio on Freeport Street in Dorchester for $3.5 mil- WELLESLEY CVS, 188 LINDEN ST,, WELLESLEY MA lion. “There’s a lot of devel- Streetwear in the $2.5 million purchase of a from Middlesex Savings Bank. Just north of Boston, Burgess Properties opment going on in down- 36,250-sf office/warehouse building at 375 town Quincy,” observes Hopping Brook Park in Holliston (CBRE repre- found itself back in the commercial sales game TYLER GRIFFIN Kenealy in explaining the sented the seller); and Johnston advised Interim after a lull in recent years, representing sales activity being gener- Furnishings in the acquisition of a 46,000-sf Asahi/America in their $11.5 million acquisition ated in the City of office/warehouse building at 321 Central St. in of the 200,000 sf former Staples distribution Presidents. “Quincy is Hudson for $2.1 million. The trend continues facility located at 655 Andover St. in Lawrence. seven miles south of into 2015 as Eysenbach represented the seller Colliers International Vice Presidents Robert Boston and there are four and Johnston represented owner-occupier Cronin and Brian Flaherty represented the selltrain stops. Occupancy Precision Digital in the recent $5.4 million closer, an affiliate of the Lewiston Investment Co. rates are rising and rents ing of the 39,600-sf R&D building located at “Their needs were for 200,000-sf (they were coming out of 100,000 sf in Malden at their forhave grown in the last year 227-233 South St. in Hopkinton. BEN KARP The largest sale for R.W. Holmes in 2014 mer location) and it was the closest building of and a lot of retail deals are getting done in the down- was the $7.1 million purchase of 978-980 that size to Malden,” recounts President Phillip town,” reports the industry Worcester St. in Wellesley by an entity managed K Burgess. “It is a problem we’re running into veteran, adding, “Quincy by Wellesley Place LLC, managed by Louis P. with so many requirements in the last year: has spent several years lay- Minicucci of Minco Development Corp. and there’s just no product. And land is at an ing the groundwork for Michael F. Carr. In addition to the 24,500 SF absolute premium. I’ve got so many people downtown development, office/retail building which was an REO proper- looking for sites and there just aren’t any.” Burgess originally sold Asahi/America the and it‘s phenomenal to see ty, the property was permitted for 36 multifamthat coming out of the ily units which are currently under construction, Malden building at 35 Green St. that they vacatJAIME RUSSELL and Holmes has leased the vacant space to a ed for the new digs in Lawrence when he was ground right now.” Up the Massachusetts Turnpike and into the restaurant and has a couple of tenants “taking working with Combined Properties, which MetroWest, Holmes conveyed that while there a hard look” at the second floor space. The buy- owned the building. In a deal that closed this continued on page 63 were no headline-grabbing deals like the $55 ers are backed by $12.4 million in financing million sale of Boston Scientific’s former Natick headquarters to MathWorks that his firm oversaw for the buyer in 2013, R.W. Holmes still transacted 15 sales in 2014, with a half-dozen of those properties purchased by owner-occupiers. “Throughout the Northeast, companies are looking to control their overhead, and over the last several years they’ve had a lot more capital to work with and the values have been on the vacant real estate from a valuation standpoint,” Holmes observes. “Anyone that can take advantage of some of these empty buildings that are geared towards an owner/occupant are clearly getting some pretty good values.” For example, Holmes and Craig Johnston represented the owner and procured the buyer in the $2.7 million purchase of a 13,000-sf office building at 679 Worcester Rd. in Natick by Boston India Realty LLC, whose company TalentBurst now occupies the first floor of the two-story building; John Eysenbach represented 1515 HANCOCK ST., QUINCY MA

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March, the owners of Hoff’s Kitchen purchased the property for $7.0 million to establish an owner occupied bakery. Burgess added he expects his firm “to broker a record number of industrial sales in 2015,” and by all accounts, is off to a flying start. In the first quarter, Burgess sold a 26,000-sf industrial building at 25 Commercial St. in Medford for $2.2 million to Storage Bunker; a 17,00016-18 BALLARD RD., LAWRENCE MA BRET O’BRIEN sf industrial building at 1618 Ballard Rd. in Lawrence to Howard Michael market. Since the 2014 purchase, New Dover Realty Trust for $1.3 million (with Micah has leased 16,200-sf to Reliant Hospital Stubblebine of the Stubblebine Co. representing Partners and an additional 4,400 sf to Kuchnir the buyer); a 20,000-sf industrial building at Dermatology, and is closing in on a lease for an 445 High St. Randolph to Central Rock Gym for additional 3,500 sf to bring occupancy back to $1.2 million; a 15,000-sf 87 percent. Middlesex Savings Bank funded the warehouse building at 245 latest transaction with $4.2 million on the strucSumner St. in East Boston to be razed for a mixed-use property comprised of 34 rental units and ground floor commercial space, that a $1.2 million investJOEL AHO ment by Velkor Realty Trust. Fra m i n g h a m - b a s e d New Dover Associates, helmed by president Scott Hughes, also reported a GARRY HOLMES variety of commercial sales to complement their advi- ture built in 1971 on 2.9 acres. sory and leasing business. In addition to 125 Newbury St., New Dover The highlight was a $4.6 peddled a 13,400-sf office/flex building located DAVID CURLEY million acquisition of a in the East Natick Business Park at 9-11-13 Erie 33,500-sf office/medical Dr. to local investor Warren Cross, and negotiatbuilding at 125 Newbury ed the $2.2 million sale of 12-16 Southwest St. in Framingham by HCLP Park in Westwood, a 14,800-office/flex properNewbury LLC Scarlata- ty that Maric Inc. traded to private investors Wood Newbury LLC, enti- Richard and Cynthia Vito. And the momentum ties managed by Daniel has continued into 2015. “We’ve got multiple Candee. The property was buildings under agreement for the next two purchased by Jumbo quarters in MetroWest,” Hughes relays. ERIC O’BRIEN Capital in 2012 for $6.4 Although Denenberg Realty Advisors namemillion, but shortly thereafter, two tenants that sake Neil Denenberg anticipates 2015 “will be had comprised 85 percent of the space went the best year ever for us,”—with high value resbelly up and the property was put back on the idential properties and a large tech building, as

“

We can partner up in any market that we go into with who we consider to have the top local knowledge.

”

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well as bank and warehouse properties already queued up for sale—2014 was very productive as well. Denenberg brokered the $3.8 million sale of a 22,500-sf mixed-use office/retail building at 140 North Franklin St. in Holbrook to ABC Commercial Properties from 140 N. Franklin Corp. managed by Ferdinand J. Kiley III; the $2.0 million sale of the former Sparks department store at 86-90 Pleasant St. in Malden to private investor Mai Luo of Weston (who recently leased the entire space to Boda Borg, a Swedish “questing” center.); and in January handled a 2,800-sf historic retail building at 21 South Water St. on Nantucket which traded hands from private party John Arno to locally-based Water Street Investors for $2.9 million. Micah Stubblebine’s firm, the Stubblebine Co. of Lexington, had another busy year on both sides of the leasing and sales aisle, including a marquee deal in Braintree involving 2001 Washington St. The former home of Kindred Healthcare encompasses 103,000 sf on 20 acres that will be converted to an upscale private school run by an operation with three affiliated campuses in Great Britain. David, James and Micah Stubblebine orchestrated that agreement. They and Senior Advisor Ellen Garthoff separately hanELLEN GARTHOFF dled the exchange in Lowell of 22 Olde Canal Dr. for $1.65 million on behalf of Charis Trust to 22 Olde Canal LLC from Charis Trust. The new owner, Steven Goodman of GFI Partners, borrowed $3.17 million from Digital Federal JAMES DAVID Credit Union to buy and upgrade the building, while the Stubblebine Co. then leased the facility in its entirety to Habit OPCO and South Bay. The 32,000-sf structure is located on 3.2 acres just two miles from the confluence of Interstate MICAH STUBBLEBINE 495 and Route 3. Another firm active west of town is O’Brien Commercial Properties which oversaw such deals last year as the $1.35 million trade of 19 Brent Dr. in Hudson between seller ChaseWalton Realty LLC and its new owner, Borg Brothers. The two-story industrial building on 15.7 acres totals 58,000 sf that the owners, Borg Designs Inc., will occupy for their own purposes for their machining and engineering concontinued on page 64

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sulting services. Brokers Joel Aho and David Curley negotiated that agreement. Colleague Paul Mulroy negotiated a separate transaction advising South Shore Guinite Pools and Spas Inc. in the firm’s purchase of 12 Esquire Rd. in Billerica from the seller, who represented their interests in-house. Mulroy was subsequently retained by South Shore Guinite to peddle the firm’s MARCI ALVARADO existing properties at 7 and 9 Progress Ave. in Chelmsford, with 9 Progress Ave. sold for $950,000 a short time later. Leader Bank financed the 12 Esquire Rd. purchase with $3.24 million secured by the building VICTOR GALVANI that totals 60,000 sf. Robert E. Guarino is the manager of South Shore Guinite, which formed the 12 Esquire Road Billerica LLC to buy the property from the Esquire Realty Trust and its principals, Bradford A. Spencer and GARRETT QUINN Richard W. Kohn, who paid $1.5 million in Aug. 2002. Another firm active in the MetroWest is Parsons Commercial Group whose broker Victor Galvani represented both sides in the exchange of 109 Powdermill Rd. in Maynard last summer for $2.3 million. PCG advised seller Great Point Investors on the single-story flex/office building that totals 114,475 sf that was once owned by Digital Equipment Corp. Located on 10 acres, 109 Powdermill Rd. is zoned industrial but does allow for flex, manufacturing and warehouse uses. The buyer RICHARD E. PUTPRUSH is KaileyBoo LLC, an entity managed by Howard J. Hall who borrowed $4.23 million from Enterprise Bank & Trust Co. PCG Vice President Marci Alvarado negotiated the sale of three industrial condominiums in Woburn on behalf of the buyer, David’s World Famous Realty, which acquired Units 1, 2 and 15, for a total consideration of $740,000 at 10 Draper St. “The buyer wanted to accommodate their expanding business needs,” explains Alvarado, Seller Lily Draper Street LLC handled

FAN PIER continued from page 60

ter when DivcoWest retained the team to sell the remaining pieces. Bentall Kennedy and client Multi-Employer Properties Trust picked up that 212,175-sf portfolio for $105.6 million. The HFF contingent was also broker for Angelo, Gordon & Co. and National Development when Clarion Partners paid $128.5 million to secure 407,000 sf in six Fort Point buildings just as the district was emerging as a new hotspot for millennials, life sciences entities and technology firms lured by billions of dollars in public and private investment.

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the transaction in-house. Colleague Garrett Quinn oversaw a similar transaction in Boston when he advised buyer Vell 185 LLC in the $903,820 purchase of an office condominium

at 185 Devonshire St. in the city’s Downtown Crossing District. NAI/Hunneman Commercial Co. principal Jeffrey Becker negotiated on behalf of the seller, Suffolk Devonshire LLC, whose manager is Michael J. Rauseo. The buyer will occupy the space for its Vell Executive Search company, a retained executive search firm that

specializes in recruiting board directors, CEOs and C-level professionals in the software industry. Earlier in the year, Quinn was broker for the buyer in the $1.90 million sale of 60 Pleasant St. in Ashland while REP Realty Advisors principal Richard Putprush advised the seller, Gamewell Realty Inc. owners of the 73,475-sf industrial warehouse set on 4.1 acres since paying $965,987 in July 1997. “The property offers flexible floor plans, a cost-effective rate and a superior location to major routes,” Quinn said following the transfer that clears the way for his client to occupy a portion of the property while upward of 50,000 sf will be leased to third parties, with the broker retained as exclusive leasing agent. This building is one of only a few in this market featuring heights to 24 feet, he says, and is fully air conditioned with a location one half-mile to the commuter rail “and is in good condition,” he adds. u

The HFF investment sales pipeline does not end in Boston’s Seaport, as evidenced in the team’s 2014 handling of a $56 million netleased sale in Andover and luxury apartment buildings in Brookline and Saugus totaling $140 million during 2014 (see related stories this publication). The unit was also broker for the $152 million sale of 116 Huntington Ave. in the Back Bay to Columbia Property Trust, that deal delayed until the first week of January. Also in 2014, HFF completed two critical land transactions on behalf of the First Church of Christ Scientist as part of their transformative development of the Christian Science Plaza on Huntington Avenue that is yielding a pair of

high-rise buildings, one a multifamily structure and the other a mix of hotel rooms and condominiums being built by Carpenter & Co. “I am extremely proud of our investment sales activity,” HFF Senior Managing Director Riaz Cassum says in reflecting on a division that had been limited prior to this decade. It has since charged onto the stage to be among the most prolific shops in that regard. Their growth scored a key personnel victory last month when Eastdil Secured veteran Christopher Phaneuf arrived to help advance the multifamily and urban retail platforms after the prior season bringing in James Koury to oversee its entire retail group and Denny Meikleham for the hospitality sector. u

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Land is at an absolute premium. PHILLIP K. BURGESS Burgess Properties President

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CALARE PROPERTIES’ continued from page 13

time of its off-market purchase that was brokered by Sean Duffy and Timothy D’Addabbo of Cushman & Wakefield. According to Manley, the $11.0 million Watertown investment was worth the price of admission thanks to being another attractive flex/industrial structure with solid demographics in a rapidly evolving neighborhood on the edge of downtown Waltham. The mix of in-place cash flow ROBERT G. FLYNN and future upside as part of the Pleasant Street Corridor Zoning District makes the 95,000-sf building and its 5.5 acres a solid long-term investment, Manley told Real Reporter in opining the special zoning could NICHOLAS EDDY enable a “higher-and-better use” down the road for his firm which was introduced to that opportunity by CBRE/NE and its team of Christopher Angelone, William Moylan, Bruce Lusa and John Meador. Blue Hills Bank loaned ANDREW IGLOWSKI $7.25 million to CPI 20 Seyon LLC, the Calare affiliate formed to control the Watertown asset that came on line in 1981 and was purchased from Hilco Real Estate, as the prior article outlined. CBRE/NE principal Robert Gibson is handling leasing duties at the facility that was 100 percent occupied when purchased. In August, Clinton100 CPI LLC paid $3.3 million on 157,000 sf in two Framingham buildings and an adjacent parking lot owned since 1920 by Dennison Manufacturing Co. That all-cash consideration brought Calare 71 Bishop St. and 100 Clinton St., the latter in excess of 136,000 sf and part of nearly 10 acres the buyer secured in a community Manley says is enjoying a rapid rebound after the

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downtown was hit by the 2008 recession. Manley reporting multiple tenants previously Calare in early September took out a $10.3 mil- intending to leave the portfolio that was 70 lion loan on the holdings through Calmwater percent occupied when purchased have instead Capital 3 LLC. renewed, enthused by the The Sunshine State endeavors sate a yen by new landlord which manhis firm to invest in the area Calare has been ages $500 million of CRE considering since the mid-2000’s, Manley also totaling over 15 million sf outlined to Real Reporter, but until its 231,000across the Northeast and sf purchase of two properto Colorado, Texas and ties in St. Petersburg and now Florida. Tampa there was no deal The Calare fiefdom can that provided the “critical ROBERT GIBSON be tracked on the new mass” to make it a viable website launched last year strategy, he explained. at calare.com, part of a “We are very happy to be program to evolve the capthere,” Manley expressed ital structure from one SEAN DUFFY in relaying his family has relying on high-net-worth stakes in the Tampa/St. Petersburg area. One investors to also target colleague familiar with that wish list was CBRE institutional capital. The Vice Chairman Christian Lee, a Boston naming of Blake as presiUniversity classmate of Manley who has been BRUCE LUSA dent and Robert Flynn to in Florida for a quarter century and introduced chief operating officer were done to support Calare to the listing which was being handled that strategy, relays Manley, who launched by Rick Brugge of Cushman & Wakefield, advi- Calare a dozen years ago. There were also two sors to seller Wells Fargo Bank. Similar to the new hires with institutional experience brought Calare hands-on platform, Bay Tec Center at to the team that is based in Hudson, with 2810-2880 Scherer Dr. in Tampa and Airport Nicholas Eddy matriculating from First Corporate Center in St. Petersburg are being Winthrop Corp. to the position of associate upgraded physically with their roofs, mechani- and Andrew Iglowski coming on board as cals and landscaping being repaired or director following a stint at AEW Capital replaced. Already it appears to be working with Management. u

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290,000-sf building dating to 1974, followed by the 168,875-sf warehouse at 11 Norfolk St. Two more Mansfield holdings brought $18.0 million, those being 35 Hampden Rd. (70,825 sf and built in 1982) and 50 Hampden Rd. (203,525 sf and built in 1978.) Close behind on pricing was an assemblage that yielded $17.5 million from a mix of two land parcels at 55 Suffolk Rd. (3.4 acres) and 520 West St. (2.8 acres) plus 250,000 sf of existing space at 31 and 33 Suffolk Rd., 1970’s-era buildings renovated in 2003. Rounding out the portfolio was a 201,000 sf warehouse at 71 Hampden Rd. in Mansfield that traded for $13.5 million and a 203,525-sf distribution center at 31 Plymouth St. that brought Prologis $14.1 million versus the prior sale in June 2002 when it sold for $5.8 million. The remaining property changing hands is 525 Campanelli Dr. in Brockton, a 300,000-sf property dating to 1970 on 18.2 acres that went for u $7.8 million in its latest swap.

35-41 HAMPDEN RD., MANSFIELD MA

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which Roseview Group paid TransAtlantic Management $41.5 million for the 135,572-sf office building. On Dec. 19th, CarVal and Nordblom gave Great Point Investors $34.0 million for the Solomon Pond Office Park in Marlborough, a 495,000-sf asset purchased with $25.5 million in funding from Cambridge Savings Bank. DEBRA GOULD Griffin says the steady stream of activity that has pushed into 2015 is indicative of how revered metropolitan Boston has become from a global capital perspective. “If you are not 100 CAMBRIDGEPARK DR., CAMBRIDGE MA doing well in this market, broker Debra Gould provided last year which demographics on multifamily show what the you’d better re-evaluate helped hasten the sale of 25 First St. in best places are going to be for rent growth,” DAVID MARTEL your business model,” he Cambridge, a 211,000-sf lab/office building explains Griffin. “It gives you a true sense of purchased by Jamestown for $136 million in what conditions are like and what direction they says. No such retooling is late November. “That played a big role,” says are moving in when you have people out there regarding every day.” required for the C&W Griffin Having helped machine operating around Gould’s insights. One clean out Blackstone’s Griffin’s 30-plus years in Kendall Sq. relied on Massachusetts cupthe business joined by the C&W leasing team board in its portfolio longtime colleague Vice there of Juliette Reiter, exchange to Oxford Chairman Edward C. David Townsend and JULIETTE REITER and JPMorgan, C&W Maher and Executive Mark Winters, while found the New YorkDirector Matthew E. Pullen downtown Boston’s veterans based seller on the leading the charge to pace leasing other side of the table the region on investment include Gould and Director when Blackstone in sales again for the fourth Executive September paid straight year. Many David Martel. ROBERT E. GRIFFIN JR. Having “boots on $117.0 million for 399 observers credit the consisCushman & Wakefield principal Boylston St., the tency partly to C&W’s inte- the ground” throughgrated approach of cross- out the region was a factor in C&W being 229,375-sf Back Bay office building secured DAVID TOWNSEND selling its menu of services among the early cheerleaders of metropolitan from Shorenstein Properties. That West Coast and utilizing in-house Boston in the wake of the 2008 recession which concern had paid $90.8 million in March 2007, experts such as leasing and crippled the economy through 2009 before a deal also orchestrated by C&W. Pullen maintains it is not surprising to see management professionals recovering rapidly to begin the 2010s, a to give clients street-level rebound C&W used to promote CRE in a nas- Blackstone back on the prowl after divesting insight on recent trends cent part of the up cycle. Many who listened are millions of square feet in the area over the past needed in an evolving cli- now reaping the rewards, including multiple two-plus years, noting that other firms have mate, and in those regards, clients that C&W brokered those initial invest- quickly rushed to replace holdings they have ments to who have since churned those proper- sold with new properties, as DivcoWest has Griffin agrees. MARK WINTERS “We use real-time ties for substantial profits. “We have two million done in churning several buildings this past year information to get a 360-degree view of what is square feet of (leasing) requirements available bought earlier. That included 25 First St., a prophappening,” he says, pointing to guidance at any time to evaluate the intensity of the mar- erty dating to 1860 and also known as the regarding an important tenant that C&W urban ket and where things are headed, and our continued on page 67

“

It gives you a true sense of what conditions are like and what direction they are moving in when you have people out there every day.

”

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Davenport Building that had been bought by the seller through C&W in March 2012 for $79.0 million. C&W has spent a good deal of time in Cambridge over the past two years, including a number of assignments in the Alewife District on the city’s western flank. Following up on several lab and office closings orchestrated there in 2013, C&W in 2014 oversaw the sale of One Alewife Center ($21.6 million for 89,975 sf) 87 CambridgePark Dr. ($14.8 million for 62,500 sf); and the 100 CambridgePark Dr. result. Closer to midCambridge, an office lab facility totaling 216,450 sf FRANK NELSON brought $39.7 million to C&W’s client, Pfizer Pharmaceuticals, from the June harvesting of 200 CambridgePark Dr. to King Street Properties. In Boston, besides the Blackstone portfolio, C&W was broker for Synergy MICHAEL GREELEY Investments in the developer’s adroit conversion of an empty 102,725 sf office building into a fully leased structure that went for $52.7 million in midAugust, well above the $10.5 million Synergy had paid for 51 Melcher St. in THOMAS GREELEY an Oct. 2011 deal handled by C&W. A separate exchange of 400 Atlantic Ave. on Boston Harbor resulted in a $50.0 million purchase by a lone net-worth investor from New York City of that 99,750-sf asset C&W brokered for Colonnade Properties, also of New York City. The firm also advised Broadway Real Estate Partners at Ten Post Office Sq., the Financial District office building acquired by Synergy Investments last autumn for $143 million. A stand-alone parking garage close to 51Melcher St. was another C&W assignment of note in 2014, with Bentall Kennedy paying $56.0 million for that 588-space garage to a joint venture of DivcoWest and Synergy. Bentall Kennedy was acting on behalf of client MultiEmployer Property Trust as part of a $250 million spending spree by that entity last year resulting in the purchase of nine buildings total-

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ing 650,000 sf in three separate transactions in the Hub. One piece of that action was a medical office package in Boston’s South End that C&W’s Medical-Academic Practice Group listed on behalf of the seller, Boston Medical Center. MEPT acquired those assets that include two

C&W’s Medical-Academic practice group sold New England Sinai Hospital in Stoughton for $23.3 million in 2014. fully leased buildings at 660 and 720 Harrison Ave., three buildings slated for redevelopment at 575 Albany St., 100 East Canton and 123 East Dedham St., plus a two-acre site being eyed for multifamily development. MEPT took on those holdings in a joint venture with Leggett McCall Properties. Joined by Gould, members of the medical-academic team on the case included Frank Nelson, Michael Greeley and Thomas Greeley. Michael Greeley says the South End offering which closed in mid-December “got a ton of interest,” and he predicts the experienced partnership will fare well with the package that has cash-flowing aspects from the medical office facilities and a cluster of healthcare uses around the medical center. Then there is the South End itself, a once-gritty part of the city which this

RENOVATED CENTER PLAZA, BOSTON MA (RENDERING)

decade has welcomed a number of new developments in the area led by the Ink Block mixeduse project situated close to Albany Street. “That corridor is on fire right now,” says Michael Greeley. MEPT’s portfolio manager at Bentall Kennedy, David Antonelli, has a similar view, offering that “the assets acquired on behalf of MEPT provide a balance of both stabilized, cash-flowing components and value-add development opportunities which position the fund to benefit from further economic expansion.”

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The published price for the BMC portfolio is $80 million, but according to some market watchers, the venture could be expanded to upwards of a $180 million invested should other pieces be acquired, a concept Michael Greeley declined to speculate on, instead focusing on the unique opportunity to acquire such holdings so close to a major medical facility. “It’s very rare” to find such deals in a mature district such as the South End, he says. The C&W Medical-Academic contingent was active in other parts of the region as well in 2014, with other deals of heft including $8.07 million for a 17,575-sf property at 303 Boylston St. in Brookline, $15.6 million for 31 Stiles Rd. in Salem, NH, which totals just under 47,000 sf, and $23.3 million for New England Sinai Hospital in Stoughton, that a multiple-building purchase containing a total of 180,750 sf. u

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leads HFF’s Global Capital Initiative and was in the Pacific Rim this past year drumming up business and reconnecting with established groups who are beginning to come ashore in the Hub. That was evidenced when a pair of Chinese lenders backed Tishman Speyer’s redevelopment of the Anthony’s Pier Four Restaurant site on Boston Harbor, a financing that even caught the Wall Street Journal’s eye. It soon could become old hat, advises Cassum, relaying that Asian capital is eager to participate in multiple strategies and risk profiles. DONALD CHIOFARO Among other endeavors, Chinese players “like development a lot,” says Cassum. “They’ve done it, they understand it 125 SUMMER ST., BOSTON MA and they are not afraid of it.” In that regard, the Pacific Rim set is not ment,” adds LaBine, while ARA principal Kirk alone, as evidenced in the vast number of con- Helgeson calls the venture “a terrific opportunistruction loans arranged by HFF in 2014, includ- ty to invest in a residential and commercial ing Northwestern Mutual Life funding as part of development in a market with strong demand a $204 million package provided for develop- for housing,” plus one adjacent to Harvard ment of a mixed-use project at Barry’s Corner in Business School on the banks of the Charles Allston by Samuels & Associates and S.R. River. Former CBRE Global Investors principal Weiner. Northwestern Mutual loaning $83.6 Jeffrey Miller oversees national capital placemillion while American Realty Advisors brought ment for ARA, a firm with $6 billion in assets in the remainder comprising of joint venture under management that acquires assets directly or via equity, preferred equity, mezzanine and equity. “The capital sources got comfortable with hybrid debt to developers and investors across the vision Samuels has with the Barry’s Corner the US. Miller says Boston has been a key target site as it mirrors the successful Trilogy project of ARA and the firm has been pursuing other they developed in the Fenway a few years opportunities in the market. Other HFF construction deals arranged in back,” outlines HFF Managing Director Greg LaBine, who took the lead on the financing ini- 2014 included $85 million to Normandy Real tiative that will produce 325 apartments, Estate to build a new headquarters for 35,000 sf of retail and 220 parking spaces plus TripAdvisor in Needham, $97 million for two three open spaces. “Both American Realty hotels in Boston’s Seaport District, the Aloft and Advisors and Northwestern Mutual worked well Element, projects that will bring 510 rooms to together to ensure a smooth closing process in the market; and $89 million in acquisition and order to expeditiously commence develop- redevelopment monies to King Street Properties

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used in last summer’s $54.5 million purchase of two Alewife laboratory buildings that will be upgraded to modern standards by the Walthambased developer led by Thomas Ragno and Stephen Lynch. The package of floating-rate loans from Cornerstone Real Estate Advisers includes $22 million for 87 CambridgePark Dr. and $67 million for 200 CambridgePark Dr. “King Street has a long and successful track record repositioning laboratory facilities in Waltham, Lexington and west Cambridge,” LaBine says of that client. “In addition to the exceptional sponsorship, Cornerstone was attracted to the high quality of the assets and the strength of the location.” Cassum, Director Lauren O’Neill Goff and Paulsrud advised Rubenstein Partners on its purchase of a stake in 1000 Washington St., a multi-tenanted office building in the South End that still has Nordblom Co. retaining a minority partnership while Rubenstein paid $75 million for the portion previously owned by CarVal. The same team advised Nordblom and Rubenstein in securing first mortgage financing of $51.0 million from EBSB. The lender was represented by Senior VP Mark Terry KIRK V. HELGESON and Vice President Jonpaul Sallese. LaBine, Senior Real Estate Analyst Brett Paulsrud and Real Estate Analyst Martha Nay arranged $10.4 million with Blue Hills Bank for CURO Enterprises used to JEFFREY MILLER purchase two suburban office properties, 130 Lizotte Dr. in Marlborough and 118 Turnpike Rd. in Southborough, assets that together total 180,000 sf. CURO has now acquired three properties in the Interstate 495 Central corridor over the past year, and LaBine continued on page 69

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points out that Blue Hills Bank has been their finance partner on all three, “a shining example that relationships are still of paramount importance within the banking community today.” Spurred by low interest rates and maturing debt, refinancings were another big piece of the HFF pie in 2014, including one of the largest in New England’s history when Cassum was joined by Executive Managing Director John Fowler and Real Estate Analyst Patrick McAneny on the International Place assignment that took two BARRY’S CORNER MIXED-USE PROJECT, ALLSTON MA (RENDERING) major lenders to accomplish. New York Life Insurance Co. and Northwestern Mutual beat out several others vying for the opportunity to refinance the landmark office complex totaling 1.8 million sf. “It was a great opportunity,” Cassum says of the property HFF lauds for “having defined the Boston skyline with its two signature office towers” providing unobstructed 360degree views and are fronted by the Rose Fitzgerald Kennedy Greenway. Linear Retail used HFF to refinance a half-dozen KYLE JUSZCZYSZYN of its convenience oriented properties on what amounted to a $50.6 million commitment from Allianz Real Estate of America used to pay off existing debt. The assemblage of 224,000 sf that is 97.7 percent leased CHRIS COUTTS includes Burlington ONE CHANNEL CENTER, BOSTON MA Marketplace in Burlington, Flint Village Plaza in Fall $48 million in construction monies to develop a Febres-Mazzei characterizes last year as River, Peabody Gardens in Residence Inn in the Fenway District. Senior “one of price discovery and pricing breakPeabody; 345 Main St. in Managing Director Frederic Wittmann and through that a lot of us were waiting to see Reading and Westford’s 1 Senior Real Estate Analyst Robyn King were on occur in the office market. We were waiting for Carlisle Rd. (Rite-Aid) plus that assignment for Boylston Properties and its the mega-sales and the large multifamily trades 1000 Bald Hill Rd. in founder, William McQuillan. The 10-year, fixed and the blockbuster retail deals, and all of that Warwick, RI. “It is always rate mortgage was provided by Cornerstone finally came together in 2014.” On the office TAYLOR SHEPARD rewarding to work with Real Estate Advisers for the eight-story, front, CBRE/NE arranged financing for CBRE truly professional organizations such as Linear 154,675-sf property at 125 Brookline Ave. Global Investors in its separate purchases of Retail and Allianz,” commented Cassum, who Somehow, HFF did leave plenty of other 100 High St. in Boston and a pair of Cambridge handled that debt placement with Paulsrud for opportunities for competing debt and equity assets, 125 and 150 CambridgePark Dr. The the borrower, a Burlington-based firm led by camps to provide monies for clients, with High Street tower was received $182.5 million William J. Beckeman which controls 76 assets CBRE/NE overseeing some $800 million in vol- from GE Capital Real Estate and CBRE Global’s totaling 1.8 million sf valued at close to $500 ume for 2014, according to principal Carlos $163 million purchase of the Cambridge propmillion. Febres-Mazzei. “It was really a breakthrough erties that total 470,250 sf was financed by Cassum had similar praise for Synergy year,” he says in pointing to a series of “mega- $42.1 million from Wells Fargo Bank. Investments, the well-known Boston-based sales” such as the Blackstone portfolio and sevAs with HFF, Febres-Mazzei says his firm’s landlord which used HFF to refinance debt at eral other tower trades to go along with an global capabilities have enabled the group to 250 Summer St. in Boston’s Seaport District, active construction and refinancing season. continued on page 70 with $24.6 million provided by Eastern Bank on the 104,700-sf office building overlooking Fort Point Channel, with the loan replacing an acquisition mortgage from HSBC written in 2012. In the One Channel Center arrangement, Managing Director Anthony Cutone and Paulsrud structured a $50 million mezzanine note to go with $190 million in permanent financing for the borrowers, Ares Management and Commonwealth Ventures. Completed last June, the 501,000-sf building is accompanied by a 967-vehicle parking garage as part of the 2.1-million-sf Channel Center mixed-use enclave. Hotel financing was another part of the HFF debt and equity lineup in 2014, including a permanent loan arranged after previously securing FLINT VILLAGE PLAZA, FALL RIVER MA

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interface with overseas funds, including Asian monies. “We have visited with many different sources of capital who are looking to do development and non-development deals, including Chinese operators who are looking to partner with someone local,” he says. “That is very active right now.” Construction loans were delivered for a hotel in Hyannis backed by $12 million from Cambridge Savings Bank. FebresMazzei and CBRE/NE principal Kyle Juszczyszyn orchestrated that loan at ANTHONY CUTONE 867 Iyannough Rd. (Route 132) for Simon Konover Co., the developer, which enabled the replacement of a 99-room Days Inn with the 125-room Fairfield Inn & Suites by Marriott. “We are proud to have partnered with CBRE/NE and GREG LABINE greatly appreciate the market knowledge and experience that the team brought to our deal,” Simon Konover Co. President James Wakim said regarding the funding he calls “a critical milestone” in “creating a newly LAUREN O’NEIL GOFF renovated, expanded and vastly up-flagged hotel,” with other members of the debt and equity team on the assignment including Chris Coutts and Taylor Shepard. Febres-Mazzei and Juszczyszyn also arranged a first mortgage BRETT PAULSRUD construction loan for Realty Financial Advisors, developers of a shopping center in Latham, NY, with $45 million secured from M&T Bank to build The Shoppes at Latham Circle, a 370,000-sf shopping center anchored by a Super Walmart that replaces a failed 660,000-sf mall. As with many Capital Markets divisions, CBRE has been steadily growing its operation in recent years, with a focus on multifamily as evidenced in the hirings of superstar brokers Simon J. Butler and Biria St .John two years ago and debt expert John Kelly. This past season, another multifamily debt veteran was brought on in Steve Wendel as FHA Lending production chief. Chairman of the Mortgage Bankers Association’s FHA Advisory Committee, Wendel was most recently at Berkeley Point Capital where he led the FHA, Seniors and Student Housing programs, areas of interest to the CBRE/NE lines. “We look forward to his leadership of our production team, along with his extensive experience and strategic vision as we continue to grow our FHA team,” CBRE Capital Markets Managing Director Stephanie McFadden said in making that announcement. As detailed further in the multifamily lending section, Kelly had a busy 2014 as the First VP arranged $12.6 million from Hingham Institution for Savings for The Second Avenue Group LLC in its purchase of a two-property, 74-

WESTFORD CORPORATE CENTER, WESTFORD MA

unit apartment portfolio known as the hiring of GE Capital veteran Heather Brown to Brickview Portfolio. The assets are at 4-8-12 work with Senior VP Jonathan Schneider. “We Elko St. in Brighton and 121-123 Highland Ave. really stepped up our game with the hiring of in Somerville and were acquired last May for Heather and we had a lot of great clients to $9.02 million. “Specific to this transaction, the work with,” says Schneider. “It was a very strong lender was able to provide a revolving line of 2014 and that has continued into this year.” credit for planned capital improvements as well Brown joined at mid-year after 13 years in as giving a 35-year amortization period,” says New York City working on GE’s NortheastKelly, while borrower Jeff Bruce of True North focused institutional accounts team where she Capital Partners praises CBRE/NE in “securing originated more than $2 billion in senior and financing that mirrored our business plan,” one subordinate structured debt and CMBS financthat sought to “acquire more units in the ings. JLL Capital Markets leader Frank F. Petz dynamic Somerville and Brighton submarkets” calls her “a seasoned finance professional” after a 2013 investment of two other buildings, whose experience “brings fresh ideas and valuone in each community. able insight to our debt and equity platform” as Longtime client Advanced Realty she focuses on negotiating, originating and Management borrowed $4.2 million through structuring debt across all property types Kelly for the Park Plaza Apartments at 507 Main throughout New England” in support of the St. in Worcester over the summer, that $5.0 milCapital Markets operation. lion purchase by Main Five Zero Seven LLC “Lending across Northeast includes a nearby parking lot. The lender, Digital markets is competitive and Federal Credit Union, was able to complete the Heather is a powerful addifinancing against a tight timeline, explains Kelly, tion . . . and will make an while ARM principal Joseph Donovan credited immediate impact for CBRE/NE as well for “excellent speed and execlients trying to navigate a cution provided” by the group’s debt and strucchanging finance unitured finance platform which got a loan com- FREDERIC WITTMANN verse.” mitment within two weeks and closed the deal Brown helped JLL close out 2014 on a roll inside of 30 days from start to finish. Developer after a season in which it loaned on a variety of John McGrail of the Mayo Group was signatory acquisition, construction and refinancing assignon the DCU loan. ments when she arranged $19.3 million to facilAnother C&W client, Beacon Communities continued on page 71 President Mark Epker, hailed CBRE/NE’s direct-agency platform for “providing a smooth processing of a transaction that had many moving parts” in the $6.2 million refinancing of Pine Homes, a 114-unit affordable housing community at 469 Pine Grove Dr. in Brockton. Kelly arranged a loan funded through HUD’s Section 223(f) program that provides a 35-year, fully amortizing loan structure. “Through the loan program, we are reinvesting in the property and we are now well-positioned for the future,” says Epker of a 43-year-old property last renovated in 1998. Kelly cites the low interest rate climate that makes the extended hold period even more valuable. JLL’s debt and structured finance operation took “a giant leap forward” in 2014 via the 250 SUMMER ST., BOSTON MA

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itate Albany Road Real Estate Partners’ $20.8 million purchase of the Westboro Executive Park in Westborough in which East Boston Savings Bank provided the financing for a three-building, 220,000-sf flex/office portfolio. East Boston Savings Bank also stepped up earlier in 2014 to back the purchase of 32 Derne St. in Beacon Hill from Suffolk University by a Brookline developer with plans to convert the building into residential condominiums. As in the case of Westboro Executive Park, JLL was listing broker for the transaction. Schneider was also called in when Brickman Associates won the bidding on several CambridgePort laboratory buildings listed via JLL that traded for $31.5 million-$405 per sf—in September. GE Capital was the lender there, financing $25.7 million for the purchase and monies for tenant improvements and leasing commissions. A proven sponsor and Cambridge’s tight laboratory and office market fundamentals TIMOTHY HOSMER helped fuel lender interest in that asset, according to Schneider. Blackstone Science Square had been owned by Centremark Properties of Boston, having paid $10.5 million in 2007 for the properties set on 1.3 acres at 13-23 JAY WAGNER Blackstone St. and 233-249 Putnam Ave. that total just over 77,000 sf. Ground up development and redevelopment

of older assets has been on the rise during the past 18 months, according to Schneider, and that was further represented last year when TD Bank provided $23.5 million in acquisition and construction financing for Brookside Square, a mix of 74 residential condominiums and commercial space at 50 Beharrell St. in West Concord, with the loan arranged on behalf of its developer, Oaktree. “That is a real trend,” Schneider says of the development boom, with JLL presently juggling a number of condominium financing assignments. “The supply is incredibly tight,” Schneider notes, with another of his group’s WILLIAM J. BECKEMAN financings an $8.4 million loan from Eastern Bank to fund purchase of the Massachusetts Teachers Association’s Beacon Hill headquarters at 20 Ashburton Place for $9.85 million. Buyer FAROS 20 Ashburton LLC, which includes members of Boston’s Leventhal family of Beacon Capital Partners fame, spent $9.85 million for the building. A substantial book of business for JLL comes supporting the Capital Markets activities, but the refinancing activity also contributed to 2014’s improved performance, including $11.5 million from Citizens Bank to the owners of 150 Newport Ave. in Quincy, that being Foxrock Granite LLC, an entity managed by Jason Ward that bought the building for $13.9 million. Cushman & Wakefield’s Equity, Debt & Structured Finance team was kept busy in 2014 supporting clients of the Capital Markets group who were active buyers of CRE regionally, including the $116 million provided by Mesa West Capital to fund purchase of Ten Post Office

Square by Synergy Investments and GreenOak Real Estate, a 445,000-sf office building in the heart of downtown that was acquired from Broadway Real Estate Partners for $143 million, as first unveiled by Real Reporter. “The lenders that pursued the financing understood Synergy’s value-add strategy in the highly desirable core of the Financial District,” C&W Managing Director Jay Wagner observed after the loan he and Associate Timothy Hosmer was finalized. A property that needs little TLC purchased and financed through C&W last year is 850 Winter St. in Waltham, a fully leased office building acquired by GI Partners on behalf of the California Public Employees Retirement System (CalPERS), with $29.3 million of fixedrate CMBS monies loaned by Cantor Commercial Real Estate. “There has been a notable trend of spread tightening over the past two months, particularly for financings with strong borrower sponsorship and lower leverage,” Wagner said after Hosmer and he completed that deal. “We were extremely pleased with the ultimate execution of this transaction,” Wagner added regarding the 180,000-sf building purchased for $72.7 million in May from its developer, Marcus Partners. CCRE was also the lender of $16.5 million arranged by C&W for the purchase of 420 E. St. in South Boston by GFI Partners, a midsummer asset which fetched $20.9 million. The development is an industrial facility leased mainly to DHL. A refinancing assignment for Normandy Real Estate Partners resulted in $21.5 million loaned by CIT Bank, the US commercial bank subsidiary of CIT Group Inc. The senior secured note is written on Westford Corporate Center at 3-5 Carlisle St., an 18-acre campus that serves as home to Cynosure Inc.

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acquire 38 Chauncy St. in Boston’s Downtown Crossing; $35 million in refinancing to Signature Healthcare for their Brockton facility; and $8.8 million to fund construction of 41 apartments in Roslindale. Earlier in the year, the bank provided $26 million in refinancing for The Procaccianti Group's Hilton Providence Hotel and $13.8 million to the Holland Cos. to develop a luxury condominium building in Back Bay at 451 Marlborough St. and a EAST BOSTON SAVINGS BANK LOANED GATE RESIDENTIAL AND TRANSDEL $41.5 MILLION TO DEVELOP THE mixed-use property located 230 APARTMENTS AT THEIR ONE NORTH OF BOSTON PROPERTY IN CHELSEA (RENDERING) at 477 Harrison Ave. in the tioning deals and refinancing. pretty much always stuck to our guns, so if it’s South End. DARRYL J. FESS “What we try to do is hold to our standards not a 65-35 loan-to-value or less, we’re going The anticipated spike in interest rates never materi- as best we can” says Piper. “I think we’re no dif- to require some recourse.” Fess estimates Brookline Bank originated alized last year, and 10- ferent than anyone else, and when you have a year US Treasuries actually strong sponsor that you have a deep and suc- $350 million in new commitments and added declined, dropping 100 cessful track record with, you’re going to be a another $100 million in refinancings, with basis points from January little more aggressive.” She reports that 30 to approximately $85 million in construction, $35 to January to go below 2.0 40 percent of Webster’s business came from to 40 million in multifamily and about $220 milpercent. So while one new sponsors, and that included deals with lion to $225 million in “general CRE,” a figure JULIA ANNE M. SLOM would naturally surmise DivcoWest ($51 milwhich included financing for acquiring and that investors originating lion for the One re-positioning of new loans in 2014 would Kendall Sq. garage assets. Highlights of take advantage of the low with Eastern Bank) 2014’s second half Paradigm rates and lock in, Nadeau and included $19.7 million explains that was not the Properties ($10.2 milfor 24 Federal St. and 3 case. “During the last two lion for acquisition and Post Office Sq., in quarters of 2014, 70 per- repositioning of a forBoston, assets purcent of our real estate bor- mer Lowe’s Home PETER BROCKELMAN rowers elected to float on Center in Haverhill). chased in early November for $47.1 their loans. A couple put The bank also provided GERARD NADEAU million; $14.2 million swap agreements in, but $28 million in conRockland Trust Co. Senior Lender to Mount Vernon the underlying note was struction financing for floating,” he says. “So repeat customer SMC Management and princi- Partners (a venture between Daniel Rene Capital what borrowers are telling pal Stephen M. Chapman for the 190-unit Partners and French institutional investor Xavier us is that they saw rates Wellington Parkside Apartments in Everett and Giraud) to convert 39-41 Mt. Vernon St. in being low for a continued $18 million to Wood Partners for 94 apartments Beacon Hill from office space previously owned and occupied by the Unitarian Universalist period and were comfort- at Two Washington St. in Melrose. PETER L. GOEDECKE able taking that risk.” Brookline Bank Senior VP of Commercial Association into upscale condominiums; and Nadeau adds that com- Real Estate Darryl J. Fess echoes the sentiments $24.7 million in acquisition financing to Taurus petition for loans continued of Nadeau and Piper regarding the heated lend- Investments to buy Waltham’s Bear Hill flex and to ramp up in 2014, and ing environment. “I think the story in 2014 was office portfolio from King Street Properties. frets that may be creating competition on the lending side, with a lot of Another $21.4 million was loaned to DivcoWest an unhealthy environment different players coming into the markets,” Fess and Synergy Investments for their purchase of from a best practices stand- affirms. “The CMBS markets are back in full 71, 77 and 87 Summer St. Both that and point. “The competition is force and the agencies seem to have their act Rockland Trust’s loan for 38 Chauncy St. to the at least as strong as it has together as well. I also think we’re starting to same borrowers were arranged by the CBRE/NE NICHOLAS K. MOISE been since 2004-2005, and see a little relaxing of credit standards. We’ve continued on page 73 it’s reaching the point both on pricing and terms where there’s just way too much money chasing too few deals,” cautions Nadeau. “There are deals being done where the economics just don’t make sense, and PAUL C. DAVIS risk is at an elevated level.” Claudia Piper, Senior VP of Commercial Real Estate at Webster Bank, concurs with Nadeau in relaying “there continues to be an extreme amount of competition on every single transaction,” an environment she adds may have cost Webster some business in aiming to be fiscally prudent. But overall, the Connecticut-based institution exceeded their commitments and originated approximately the same volume as the year before, about $200 million. Of that figure, about $45 million to $50 million was mul- CAMBRIDGE SAVINGS BANK DELIVERED $25.5 MILLION IN ACQUISITION FINANCING TO AN AFFILIATE OF tifamily construction in close-in suburbs, with NORDBLOM CO. TO ACQUIRE THE SEVEN-BUILDING, 475,000-SF SOLOMON POND PARK AT 150 TO 500 the remainder split between acquisition/reposi- DONALD J. LYNCH BLVD. IN MARLBOROUGH MA.

“

There are deals being done where the economics just don’t make sense, and risk is at an elevated level.

”

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Debt & Structured Finance team. TD Bank Regional Director Peter Brockelman recalls that in 2014 and into 2015 borrowers have been taking advantage of the low interest rates and locking them down, but were trying to extend interest only periods on the existing stabilized assets. While declining to reveal numbers for the year, Brockelman states that “we hit budget and did well, and expect to have the same level or a little higher this year. In our first fiscal quarter this year (Q4 2014), we had some good project level financings that closed.” TD provided $29.0 million to Beacon Capital Partners for its One Canal Park office building secured by the firm last March for $44.2 million; $10.4 million to Cabot Cabot & Forbes to purchase and convert an office property at 135 Wells Ave. in Newton to a 334-unit multifamily project; and a $30 million acquisition loan to Paul Ognibene of Urban Spaces to procure 1047 Commonwealth Ave near Boston University to construct upwards of 220 micro apartment units. Besides being active throughout New England, TD also provided financing out of the region to existing customers. “We’ve done some stuff along our footprint from Maine to Florida, so we follow our primary relationships where they want to go,” he says. “(Customers) like the benefit of having a bank that will follow them.” Washington Trust Co. closed out 2014 with a flourish, originating 25 commercial real estate loans in the fourth quarter to provide the Rhode Island-based bank with its best quarter and “best year ever,” according to Julia Anne M. Slom, Senior VP and team leader for the Washington Trust commercial real estate group. “In terms of new loan originations, our fourth quarter was nearly half of what we did all year, and our gross closings were over $300 million

CAMBRIDGE SAVINGS BANK LOANED CHARLES RIVER REALTY INVESTORS AND NATIONAL DEVELOPMENT $23.0 MILLION LAST JULY TO FACILITATE THE $16.0 MILLION PURCHASE AND RENOVATION OF A 200,000SF OFFICE BUILDING IN WESTWOOD.

for 2014,” Slom relayed. “Going into the fourth quarter, we were still in the red (for CRE loans), because our pay downs were more than our net closings. We were a victim of our client’s success. But November and December is where we

“

November and December is where we went solidly into the black

”

JULIA ANNE M. SLOM Washington Trust Co. Senior VP

went solidly into the black.” The majority of the bank’s CRE business in 2014 was divided nearly equally across three states, Massachusetts, Connecticut and Rhode Island, but Washington Trust also ventured into New Jersey to provide existing client Katz Properties with $6.8 million in financing towards the $10.3 million acquisition of the 107,220-sf

ROCKLAND TRUST CO. DELIVERED $28.9 MILLION TO DIVCOWEST AND SYNERGY INVESTMENTS USED TO BUY 38 CHAUNCY ST. IN BOSTON LAST JULY FOR $39.5 MILLION.

shopping center Gloucester Town Center. Eastern Bank also closed 2014 with a flourish after doing $160 million in production in the first half of the year. “We ended up doing over $550 million last year, and we had a couple of deals that we did at the very end of the year that drove those numbers up,” said Nicholas K. Moise, Senior VP of commercial real estate for Eastern Bank. There was a 55 to 45 percent split between refis and acquisitions, coming off a previous year that was dominated by refinancing. And like other lenders, Moise indicates competition was fierce. “The lending environment is extremely competitive,” he says, pointing to a diverse pool of lenders. “Banks, insurance companies and the CMBS lenders are back in full force—and we’re all chasing the good deals. Pricing continues to come down and credit terms continue to soften up. We’ve gotten a little bit more aggressive, but we’re doing it with the right sponsors, and we’re trying really hard to maintain our integrity and our credit standards.” Highlights for Eastern included providing Synergy Investments with a $24.6 million in refinancing for 250 Summer St. in Boston; a $16.1 million acquisition/construction loan to Farley White Investments for a 166,000 sf call center located in Hudson NH (fully leased to Comcast); and a $16.6 million acquisition/construction loan to Brady Sullivan to convert a mill known as the “Junction Shops” in Worcester into 172 apartments. Eastern also refinanced much of the SOWA district portfolio for GTI Properties and owner Mario Nicosia, who bought out his business partner, and as mentioned earlier, joined with Webster Bank on a $51 million mortgage for DivcoWest’s acquisition of the Kendall Square garage. Cambridge Savings Bank also recorded another stellar year. “We thought 2013 was going to be a peak year, but it turned out that 2014 was an even better loan production year. Our group did $525 million in new originations and we’re looking for a repeat in 2015,” conveyed VP Paul C. Davis. “What we’re seeing is a lot of value add repositioning going on, whether it be (tear down) ground up construction or repositioning of under-leased or vacant assets.” A prime example was the $25.5 million acquisition loan to an affiliate of Nordblom Co. to acquire the seven-building, 475,000-sf Solomon Pond Park at 150 to 500 Donald J. Lynch Blvd. in Marlborough which was 70 percent leased at the time of the mid-December purchase. CSB also provided National Development $18.5 million to develop senior housing at University Station in Westwood as well as a $23 million continued on page 74

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acquisition loan to acquire the 200,000 sf office property vacated by State Street Bank at 105 Rosemont Rd. (also in Westwood) with partner Charles River Realty Investors. While some regional banks posted record numbers for CRE lending in 2014 and the remainder uniformly reported solid years, the big banks and life insurance companies were not denied their share of the lending pie. JPMorgan Chase Bank provided nearly $2 billion in loans in Massachusetts alone, including $399 million in financing for Prudential Real Estate Investors’ acquisition of 14 industrial and distribution buildings in the Cabot Business Park from Prologis, a $113 million pact brokered by Eastdil Secured, and $54.7 million to KS Partners and Oaktree Capital to acquire Brickstone Square in Andover from Pearlmark, that deal orchestrated by HFF. In other notable TD BANK PROVIDED $29.0 MILLION TO BEACON CAPITAL PARTNERS FOR THE BORROWER’S ONE CANAL PARK OFFICE BUILDING IN CAMBRIDGE SECURED BY THE FIRM LAST MARCH FOR $44.2 MILLION. financings, Wells Fargo Bank provided $123.3 million to refinance the Emerald Corporate complex under construction in Chelsea; a $22.0 ing arena, First Republic Bank originated a couCenter in Chelsea and $50 million in acquisition million construction loan to Soho Development ple of dozen CRE mortgages in 2014, including financing for Life Care Centers of America Inc. LLC to develop student housing at the three loans for the Mount Vernon Co. to buy to purchase a skilled nursing care facility from University of Massachusetts Lowell; and provid- multifamily properties in Boston’s Mission Hill HCRI Massachusetts Properties Inc. Bank of ed acquisition loans to Albany Road Real Estate ($7.8 million for 198 Hillside St. and 40-44 America provided $48 million to Griffith Partners ($19.3 million mortgage towards the Parker Hill Ave.) and the Back Bay ($6.0 million Properties to refinance 181-187 and 200 $20.8 million spent to purchase Westboro for 4 Marlborough St. and $2.2 million for 176 Ballardvale St. in Wilmington. People’s United Executive Park in Westborough) and Derne Commonwealth Ave.), and originated five sepaBank provided a pair of mortgages ($92 million Street Partners (a $26 million loan to buy and rate mortgages totaling $12.9 million for entiand $67 million) to MS Properties in Newton for convert Suffolk University’s Fenton Building on ties controlled by prolific local investor Dr. a trio of Valvoline franchises and a Shell gas sta- Beacon Hill into condos). Needham Bank was Gerald Chan of Newton to acquire Cambridge tion as well as a $25 million mortgage to also busy last year with over 50 originations, multifamily assets at 9 Eustis St., 168-174 Synergy Investments for the 204,750 sf office with most occurring within the $1 million to Hampshire St., 20 Marie Ave., 1-11 Marney St. building located at 100 Hancock St. in Quincy. $10 million space and with a number of multi- and 10-12 Pleasant St. Belmont Savings Bank The life companies were also a major factor family acquisition loans included. In Boston produced a similar number of originations last in the lending arena, particularly for core assets. Needham Bank provided Oranmore Enterprises year, including the $13.5 million refinancing of Prudential Insurance Co. of America provided $10.2 million to acquire and renovate a mixed- a sports medicine facility at One Orthopedics Dr. $125 million in refinancing for the Devonshire use property at 229 Dorchester St. and 9 F St. in Peabody as well as $11 million in financing to NY-based owners the Ruben Cos., and $87 and $8.3 million to Koby Kempel, CEO of for the repositioning of Franklin Shoppers Fair in million to GID to acquire Maxwell’s Green, the Pegasus Luxury Homes, to purchase 245 Franklin to the Alevizos Group. 184-unit apartment complex in Somerville con- Commonwealth Ave., a four- to six-unit properAnother lender which trolls both the comstructed by Gate Residential and K.S.S. Realty ty constructed in 1899 and renovated in 2002. mercial and residential realms is Boston Private Partners; New York Life Insurance Co. and The With over 200 banks in the Greater Boston Bank & Trust Co. On the commercial end, 2014 Northwestern Mutual Life Insurance Co. com- region, CRE investors and developers have a loans included $13.8 million used for the $8.8 bined to provide $500 million to refinance 1 multitude of options to choose from, and a million purchase and renovation of 380 and 2 International Pl. in Boston for Prudential number of those institutions were especially Commonwealth Ave. by Sea-Dar Construction. Real Estate Investors; and the Oxford Properties active in 2014. Arlington-based Leader Bank The property is part of the Harvard Club and is Group obtained mortgages from Midland delivered a $16.2 million mortgage to Taurus being converted to luxury condominiums, while National Life Insurance Co. ($150 million for Investments to acquire The Meadows, a 180- another $4.5 million backed the $5.9 million 125 Summer St. in Boston) and $295.8 million unit apartment complex in Chelmsford, and purchase of 110 Shawmut Rd. in Canton by from Prudential Insurance Co. of America (for 60 $12.6 million to Somnath Hospitality to acquire Grander Capital Partners from Paradigm State St.) to finance the blockbuster portfolio 104 Canal St. in Boston and convert the former Properties. Boston Private Bank loaned $6.72 deal with Blackstone Real Estate Partners. Bank of America branch into an 80-key bou- million to facilitate the $8.97 million purchase East Boston Savings Bank was among the tique hotel. Avidia Bank originated two dozen of a Walgreens unit at 235 South Main St. in most active regional lenders in the area in mortgages in the $1 million to $5 million range Middleton by borrower Davis Holland Corp. 2014, originating over 75 CRE mortgages. during the year, including a $4.7 million mortSalem Five Cents Savings Bank provided an Included in that total was a $41.5 million mortgage to Capasso Associates to acquire a 25,000 entity managed by Edward Dattoli of Danvers gage to Gate Residential and TransDel Corp. for sf Waltham office building at 880 Main St. $11.1 million to replace the former Liberty Bell the 230-unit One North of Boston apartment Besides being active in the residential lend- Roast Beef at 170 West Broadway in South Boston with a five-story, 46,000- sf mixed use building combining 33 residential condos with 4,300 sf of commercial space, and Hyde Parkbased-First Highland Development a $5.25 million mortgage to acquire an industrial property at 780 Dedham St. in Canton. Bank of New England financed a number of acquisitions in the 2014 campaign, providing Waterford Development Corp. of Needham a $12.6 million loan to acquire (from Normandy Real Estate Partners) and develop 320 Baker Ave. in A $28.0 MILLION WEBSTER BANK CONSTRUCTION MORTGAGE FINANCED CONSTRUCTION OF THE Concord into a hotel, and $9.4 million in financWELLINGTON PARKSIDE APARTMENTS (RENDERING) BEING DEVELOPED BY SMC MANAGEMENT CORP. AND ing to Howland Development Co. to purchase 45 Industrial Way in Wilmington. u ITS PRINCIPAL STEPHEN M. CHAPMAN IN EVERETT MA.

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deals valued at $5 million or less which Suminski predicts will provide the agency a product that will allow them to better compete in the region. “The rates are really aggressive, at close to 3.0 percent with very flexible prepay options,” explains Suminski. “This will be an excellent product for deals in New England and will compete well against regional banks—offering longer term, non-recourse RIVERBEND ON THE CHARLES, WATERTOWN MA ANDREW GNAZZO at very low interest rates.” Andrew Gnazzo, Senior VP at Walker & Dunlop, relays that in Greater Boston last year, the competition for the agencies for the lowerleveraged business was essentially life insurance companies. “We didn’t see a lot of competition from the banks, which I was surprised by, but it was obviously an indication of the aggressiveness of Fannie and Freddie and their really low rates,” opines Gnazzo, whose firm finished No. 1 lender for Fannie Mae and No. 3 with Freddie Mac. “They had a lack of volume early so they got aggressive,” Gnazzo JAMES M. MURPHY continues, adding, “They were pricing tighter and giving more (things like) interest-only to win busiTHE MEADOWS APARTMENTS, CHELMSFORD MA ness because they have a Charles, a 170-unit, Class-A apartment communi- lot of stuff from 2006 to 2008 before the crash cap they need to hit.” Walker & Dunlop had a ty in Watertown, from a joint venture partnership happened, so it’s a huge refinance opportunity “huge year,” recounts between AEW Capital Management and Criterion for folks like us.” And while refinancing was the dominant Gnazzo, and the numbers Development Partners. MICHAEL J. CHASE bear it out. Walker & While many of the larger W&D deals in New storyline in 2013 and carried over into last year, Dunlop’s total loan volume England in 2014 were for the acquisition of the dynamics behind the refinancings in 2014 in 2014 was $11.4 billion, properties, Gnazzo is anticipating a surge in shifted, according to Fantini & Gorga principal an increase of 35 percent refinancing for agency loans in the near future. Tim O’Donnell. “In terms of permanent financover 2013, and their mar- “Over the next few years, there is a huge bulge ing, there was a lot of refinancing in 2012-2013 ket share grew to 12 per- of Fannie and Freddie maturities coming up, a that was rate motivated, and people paid subcent with Fannie Mae and continued on page 76 STATS ‘14 10 percent with Freddie Mac. From a local standDOUG NICKERSON point, Gnazzo estimates that loans were equally divided between acquiBUYER CAPITAL GROUP ACQ. AMT. (IN $M) # PROPERTIES sitions and refinancing. While the season began 1 JRK Asset Management Institutional 116.4 2 with a slow opening frame, by the fourth quar- 2 Bell Partners Private 115.4 2 ter business was “flying high,” he says. 3 DSF Advisors Private 108.5 1 Active in Connecticut, Massachusetts, New 4 GID Private 87.0 1 Hampshire and Rhode Island, Walker & Dunlop 5 Northland Private 83.8 1 provided 24 New England mortgages totaling 6 Berkshire Property Advisors Institutional 66.0 1 nearly $500 million in 2014. That figure included a 7 TIAA-CREF Institutional 57.6 2 dozen HUD-GNMA (Government National 8 National Development Private 56.0 1 Mortgage Association, or Ginnie Mae) deals priced 9 ASB Capital Management Institutional 56.0 1 in the sub-$10 million range, with the remainder 10 Acumen Real Estate Advisors Private 55.0 1 split between Fannie and Freddie for acquisitions 11 UDR Public 40.0 1 and refinancings. W&D also provided a $37.2 mil- 12 Mack-Cali Public 37.7 1 lion construction loan to development firm Becker 13 StructureTone Private 35.3 1 + Becker to convert the former Bank of America 14 Guardian Life Insurance Co Institutional 31.5 1 tower on 777 Main St. in Hartford into 285 rental 15 John M Corcoran and Company Private 31.5 1 apartments. Bay State highlights included a $70 16 Stockbridge Equity Fund 29.8 1 million loan (Freddie) to Newton-based Northland 17 Universal Realty (MA) Private 25.8 1 Investments to acquire Fountainhead Apartments 18 Mount Vernon Co Private 22.9 3 in Westborough, a three-building apartment com- 19 Red Oak Properties Private 22.0 1 plex totaling 562 units, for $83.7 million; a $70.5 20 Taurus Invt Holdings Private 20.0 1 Private 20.0 1 million acquisition mortgage to the DSF Group to 21 Water Street Investments Private 20.0 1 acquire Avalon Danvers (renamed Halstead 22 New Atlantic Development Private 16.9 2 Danvers), a 433-unit apartment community, for 23 True North Capital Partners Private 16.3 1 $108.5 million; and a $42.9 million loan to the 24 Philip Privitera Institutional 12.0 1 Berkshire Group to acquire Riverbend on the 25 TA Realty

MULTIFAMILY J TOP GUNS 2014

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Management. North of Boston, Kelly arranged $16.1 million through Leader Bank to enable the $20.0 million purchase of 180 apartments at The Meadows on behalf of Taurus Investments and partner Water Street/PhilMor Real Estate Investments, itself a partnership led by CRE veteran Phillip H. Bakalchuk and Morgan P. Hanlon. “It was a pleasure working with the sponsors and their team,” Kelly recounts of that assignment by the firm’s multifamily debt and structured finance platform. Giving their clients “superior access to the right capital” allowed them the opportunity “to seamlessly execute continued on page 105

BOSTON MULTIFAMILY STATS

APARTMENT

COWESETT HILLS APARTMENTS, WARWICK RI

Qtr

Volume

YOY % Change

# of Props

13H1

$1,467,446,958

5,990

$186,417

13H2

$928,507,600

4,962

$203,990

14H1 14H2

$672,497,934 $448,536,450

54% 52%

28 30

3,644 2,436

$197,559 $190,742

* Price per Unit/SqFt calculations are rolling quaterly averages

Total Units

Avg $/Sqft

stantial prepayment penalties in order to refinance,” recounts O’Donnell. “But 2014 was less active in that kind of rate-oriented refinance because rates were higher and so many people had already done it.” There was also an abundance of funds available to build new product in 2014, O’Donnell states, with construction financing coming primarily from banks except in the case of larger projects, which were primarily the domain of insurance companies. “There was an increase in multifamily PARKSIDE COMMONS APARTMENTS, CHELSEA MA JOHN GORGA construction, projects of all sizes,” relays O’Donnell. “A few years ago there were larger, 100 to 150 unit projects being built, but there is a shift to more infill, 15-unit developments which are easier to finance. People can GEORGE J. FANTINI JR. (finance) them with banks and many private developers do it with their own equity, so that’s become more active as well.” Fantini & Gorga managing director Casimir WINDSOR TERRACE APARTMENTS, HOOKSETT NH Groblewski arranged one such deal, a $12 million the largest agency lenders in the country (Fannie, TIMOTHY O’DONNELL financing package for the Freddie and HUD) with approximately $8.0 bildevelopment of lion in agency loans originated, a total that was Renaissance Station, an 80- pushed closer to the $13.0 billion mark when unit, transit-oriented, other sources (CMBS, banks, life companies) mixed-use development in were included. And while CMBS is lagging in the Attleboro for an affiliate of Greater Boston market, other non-agency capital Crugnale Properties LLC. sources were extremely competitive, he affirms. “In this market, the banks President John Gorga and are very active, very competanalyst Jason Cunnane HEATHER C. BALDASSARI itive, so we did a lot of busiarranged $27.5 million in ness with the local, regional permanent first mortgage financing for the and national banks,” says Cowesett Hills Apartment community in Kelly. “We also did a handWarwick, RI, placing the financing with one of ful of life company deals in their national insurance company relationships 2014. Our platform lends on behalf of the 456-unit Cowesett Hills itself to doing deals with Apartments for an affiliate of The Picerne Real JOHN EDWARDS Estate Group, a Rhode Island-based real estate over 100 capital sources in the funding of our developer. The same team also arranged $17.2 transactions.” CBRE/NE also saw an increase in million in permanent first mortgage financing for their HUD/FHA practice, including several transa trio of apartment complexes totaling 338 units: actions using HUD’s 223F program. Locally, Kelly the Fairfax Village Apartments in Warwick and secured a loan of $3.3 million to finance 135 the Western Hills and Garden Village Apartments Beacon St., a multifamily brownstone building in Cranston, RI. Senior VP Heather C. Baldassari located in Back Bay for owner J.F. Perroncello, oversees loan servicing for the firm’s correspon- and secured $4.2 million in acquisition financing for the 90-unit Park Plaza Apartments located at dent lenders amounting to over $400 million. John Kelly, VP for CBRE/NE's multifamily 507 Main St. in Worcester for buyer Main Five lending arm, reported “another great year” for Zero Seven, LLC, an affiliate of Advanced Realty

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INVESTORS SHOP RETAIL continued from page 16

Horvath says much of his team’s clientele pursuing single tenant net lease assets consists of high net worth private families in the $100 million to $150 million range, with many looking to complete 1031 exchanges. “A lot of people are coming out of multi-family and capitalizing when they see the price points in Boston or New York are selling in the mid-3 or 4 percent caps, so why not exit and buy (net lease properties)?” he asked rhetorically. Other notable New England deals involved additional Walgreens transactions, the first being a Chelsea location where a Florida-based investor acquired a 13,900-sf drugstore at 1010 Broadway from Bruce Ginsberg of Ginsberg Taunton Properties for $4.86 million. Another involved the trade by Brookline-based SF Properties of the 14,800-sf Worcester Walgreens at 99 Stafford St. for a sale price of $8.2 million (and a 5.5 percent cap rate), again to a private family represented by Sidney Insoft of Wayland. Walgreens has 19 years remaining on the original 25-year triple-net lease, which includes 10 five-year options. New England transactions not involving pharmacies were also plentiful for the Horvath/Tremblay crew, including one IHOP in Plymouth that fetched $2.14 million, a Fall River McDonald’s that traded for the same amount; and a Webster Bank branch in Enfield, CT, that brought $5.84 million. Lending institutions are a popular net-leased vehicle, and the team in 2014 traded several, among them a Santander Bank in Wethersfield, CT, that brought $3.1 million; a Digital Federal Credit Union branch in Fitchburg, harvested for $4.34 million; and BayCoast Bank in New Bedford which changed hands for $2.05 million. A pair of Rhode Island listings accounted for $7.85 million to the Horvath/Tremblay recordsetter, with the larger sale involving the Centre of New England Retail Center in Coventry ($4.40 million) and a plaza housing Corner Bakery and Red Wing Shoes in Warwick ($34.5 million.) North of Boston, another multi-tenanted plaza near the Maine Mall in South Portland with Mattress Firm and Starbucks as tenants went at a price of $4.78 million.The team also scored a number of non-pharmacy deals out of the region, including a pair of Florida assets—a BJ’s Wholesale Club for $15.1 million and an LA Fitness Center for $17.1 million, as well as a 200,084 sf Walmart Supercenter in Mobile, AL which sold for $18.4 million.

MAINE MOBS continued from page 32

$14.7 million deal was brokered by Dan Greenstein and Chris Paszyc of CBRE The Boulos Co. The duo utilized CBRE’s extensive marketing platform to reach a variety of national investors. In a press release, Greenstein indicated that there was significant interest beyond the Florida firm which emerged victorious. “The investment offering was well-received in the national marketplace,” Greenstein says, adding, “There is a strong appetite for single tenant net-leased investment properties both locally and nationally, and we identified several interested parties.” In March 2014, the buyer expanded its operations in Maine, picking up an additional property on 107 First Park Dr. in Oakland. The

A NEW RETAIL PROPERTY HOUSING DIGITAL FEDERAL CREDIT UNION AT 350 JOHN FITCH HWY. IN FITCHBURG WAS SOLD BY MARCUS & MILLICHAP LAST YEAR AT A PRICE OF $4.34 MILLION VIA THE TEAM OF ROBERT HORVATH AND TODD TREMBLAY.

THE NATIONAL REACH OF MARCUS & MILLICHAP’S BOSTON OFFICE LED TO A $15.1 MILLION DEAL FOR THE BJ’S WHOLESALE CLUB UNIT IN PORT ORANGE, FL, DURING 2014.

Horvath predicts another big year for single tenant net lease sales for the same reasons that sales for the last two years have been so robust. “You’re buying a bond basically, that’s the reality,” he explains. “It’s a MARCUS & MILLICHAP TEAM LED BY ROBERT HORVATH AND TODD TREMBLAY BROpassive invest- KERED THE 2014 SALE OF A WEBSTER BANK BRANCH IN ENFIELD, CT. ment, they tend to be triple net in nature, Horvath and Tremblay juggernaut continues to they’re estate planning tools for people coming add new professionals, with recent arrivals out of labor intensive assets like multi-family or Michael Alvarez and Matthew Nadler bringing hospitality or home parks, so they’re a natural the current unit up to 11. Other key members progression for a lot of families, and institutions include Jeremy Black, multifamily experts love them because they’re predictable revenue Dennis Kelleher and John Pentore and streams and you get a lot of institutional capital Brokerage Administrator Leigh Shepard. “We are growing to meet the demand,” relays chasing it.” u Now operating across the country, the Horvath. 20,000-sf MOB was sold by Harper’s First Park LLC for $4.3 million. The building is also leased in its entirety to MaineGeneral Medical and hosts laboratory services, mammogram and bone density screenings, and orthopedic and rehabilitation services. Greenstein opines that “the sale of both of these properties endorses the fact that institutional investors are interested in purchasing Class A properties in tertiary markets such as Augusta.” Buyer Montecito Medical Operating Company is one of the nation’s largest privately held real estate companies and specializes in acquiring and developing hospitals and MOBs. In a press release, the company revealed that it invested $90 million in medical office buildings last year, creating a portfolio of over $600 million in medical office buildings for the company.

On its website the company says it has an additional $1 billion in capital that it is prepared to invest in medical buildings. The Maine sales took place in an environment of market growth, both across the state and nationally. Medical real estate has exhibited particularly robust growth as exemplified by these sales and an even more impressive national showing with medical-related real estate sales topping $11.3 billion in 2014. This growth is deemed by market observers to be due to a variety of factors including demographic changes, national health care policy and the economic recovery. Regardless of the reasons, the ability of tertiary real estate markets in central Maine to attract private institutional capital provided mounting evidence of the expanding medical market. u

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Cambridge Savings Bank, which loaned MP $12.1 million to make the necessary design changes and renovations to get the process underway, whereas Alexandria bought into 225 Second Ave. on an all-cash basis. Marcus recently told Real Reporter Fund II has a similar value-add approach to his prior vehicle, and will be looking from Boston to Atlanta and points in between at a mix of industrial, medical and office THOMAS M.ALPERIN product. Westport was partly a reflection of his 800 FEDERAL ST., ANDOVER MA firm’s belief in that market, Marcus says, but also resig- a market like Westport where it is very difficult nation that the metro to add square footage, you have to be happy Boston playground compa- with that,” he says in predicting 8 and 10 nies of his ilk enjoyed for a Wright St. is an MP capital improvements prolong period after the reces- gram away from becoming relevant again in the sion is crammed full by area. “It is going to be like night and day, and BRYAN CLANCY capital players. “It is very the interest we are getting from tenants shows difficult to buy in Boston that we were right in our vision for the buildright now,” Marcus ing.” (See related story, page 28.) accedes. “It is a big, imperfect market, and you can always find something that makes sense if you are patient, but I would agree that pricing is very full here JACK O’NEIL right now, so you either have to have (a tenant in tow) or a fresh idea to make it work or start looking at other areas for opportunities.” DEKE SCHULTZE Northern New Jersey Rubenstein principal appeals to Marcus even The tight regional environment might be though he is getting a few THEODORE R. TYE raised eyebrows. “A lot of frustrating on one level, but for those who people have been scratching their heads on why entered 2014 with deals nearing the end of we want to be in that market, but we see good their hold period, timing could not have been things happening and think it is the right time better, a situation Marcus and colleague to be (investing) there,” he says. On Westport, Jonathan Davis of the Davis Cos. witnessed last Marcus says he was drawn by both the building year in a record-setting sale in Waltham of 850 and its surroundings. “Anytime you can buy into Winter St., an office building they constructed

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You want to be able to understand where a market is going to be five years from now—that is something we are always trying to gauge.

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on spec just when the market was tanking, but they soon signed Alkermes to an anchor lease of 146,000 sf at the 180,000-sf building that was acquired last May for $72.5 million, that another C&W exclusive which was a high-water mark for Route 128 office space at $401 per sf. While portending that “if the record hasn’t already been eclipsed yet, it is to going to be,” Marcus acknowledges the accolades of one CRE colleague that the 850 Winter St. project was “a grand slam” result. “We were very pleased with the execution there,” he says and even in divesting that property, the partnership with Davis still owns more than one million sf in the Reservoir Woods park that 850 Winter St. shares with numerous other firms. Since its completion, fellow Route 128 denizen Burlington to the north of Waltham has been staking a claim as the new king of America’s Technology Highway, a concept Marcus says does reflect that community’s ascension as a destination for that element, but he points out that Waltham and Wellesley rents are $10 per sf higher compared to what their landlord brethren are commanding up the road. “In the end, it is really about having two nodes versus one, and they each appeal to different types of tenants,” Marcus says. “If you are a software firm, you are not going to Waltham, and if you are a corporate headquarters, you probably are going to consider Burlington second and not first.” As in the cases of Marcus Partners, the Davis Cos. and a bevy of others who took risks during New England’s darkest hours, plenty of the participants were on both sides of the investment sales aisle in 2014, at times having espied what they believe to be better opportunities as in the case of Synergy Investments landing Ten Post Office Sq. after founder David Greaney feasted the prior 10 years on smaller Class B deals (see story, page 3) or joined by capital partners seeking a seasoned local operator, as that firm has done with GreenOak of New York at Ten Post Office Square and earlier acquisitions leading up to that purchase. Nordblom Co. played a similar role in 2014 by staying in on 1000 Washington St. in Boston’s South End when Rubenstein Partners roared into town, buying out Cargill’s majority stake in that prominent office building, a $75 million consideration as first detailed by Real Reporter in late December. Having owned it since paying $34.5 million in 2006, 1000 Washington St. was stabilized with a series of leases including ValueOptions Inc. taking nearly continued on page 79

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40,000 sf while Berkshire-Hathaway signed on for 28,875 sf, deals generated by exclusive leasing agent CBRE/NE’s team of David Fitzgerald, Bill Crean and Kristen Jensen. HFF not only brokered the sale on a team with Riaz Cassum, Lauren O’Neil and Brett Paulsrud, the trio also secured $51.0 million in financing from East Boston Savings Bank and its lending team of Senior VP Mark Terry and Vice President Jonpaul Sallese. Nordblom separately bought into a Marlborough office building with Cargill, that a $34 million purchase of Solomon Pond Office Park, whereas Rubenstein invested in a large office campus in DAVID RUBENSTEIN Tewksbury along Interstate 1000 WASHINGTON ST., BOSTON MA 495, in that case teaming with Genesis Management Group, a homegrown firm known for its repositioning skills. Hailing from Philadelphia, Rubenstein and Nordblom had a prior relationship before coming PAUL MARCUS together on 1000 Washington St. through an HFF listing, with the two partners at 55 Walkers Brook Dr. in Reading just before that retail strip exploded with activity drawn by a Jordan’s Furniture-anchored retail 850 WINTER ST., WALTHAM MA MICHAEL FRISOLI center built atop the town’s former landfill. multiple leases. As for 2014’s activities that increased Nordblom and Rubenstein took a corporate-occupied Rubenstein’s portfolio by nearly one million sf, building similar to what Schultze says “we are very excited by what we 1000 Washington St. once were able to accomplish in the Boston market was and converted it to a last year . . . It is going to be tough to match multi-tenanted property that in 2015, but we are chasing a few things while accreting value by very hard.” RORY WALSH Regarding the vision thing, Charles River selling two sites for restaurants and developing an ancillary structure for a Realty Investors and National Development are nearsighted on geography and farsighted in the healthcare group. Deke Schultze, Rubenstein acquisitions partnership’s many endeavors which resulted in director for the region, explains his firm has a multiple 2014 trades eclipsing $200 million in flexible approach to real estate that was on dis- total, and CRRI principal Brian Kavoogian sees a play between the Boston purchase and 495 correlation for such marquee ventures as a trio Business Center, a former Wang Laboratories of office/retail buildings on Franklin Street facility bought through JLL for $13 million in a bought when the stalled Filene’s renovation submarket that struggled during the downturn project had the district being compared on as many large companies opted to move into or national TV to “downtown Beirut.” “We knew it wasn’t going to look like closer to Boston and Cambridge. The Tewksbury property bought from Baupost Group and Beirut forever,” recounts Kavoogian of the Capital Commercial Investments did so at just 67,000-sf assemblage which also had an uncertain rent roll and was listed at a time $18 per sf for the 722,000-sf complex. “We look at 495 Business Center as a basis when the city’s economy was still in limbo. play and like the South End investment for Been there, seen that, recounts the 30-year being in an emerging market that is only going industry veteran whose partnership is stocked to get better,” explains Schultze, with that con- with similarly seasoned professionals such as sideration a key part of the strategy. “You want Thomas M. Alperin, Theodore R. Tye and Jack to be able to understand where a market is O’Neil on the NatDev side and Bryan Clancy a going to be five years from now—that is some- fellow principal at CRRI. “We were all aware thing we are always trying to gauge.” It appears that the Class B market in Boston tends to rise to have worked in Reading and on another ven- and fall, and when there are tough times, it ture in Waltham teamed up with homegrown tends to fall further and takes longer to recovSaracen Properties at 41 Seyon St. that er, but it eventually will come back and that Rubenstein sees as another evolving corridor on gave us the confidence to buy when a lot of top the building providing cash flow through people were holding off . . . For us, being where

it is right around the corner from Post Office Square and at the basis we got it at, we felt very good we could make it work.” Using a leasing team from Colliers of Lawrence Epstein, Kevin O’Brien and Lauren Vecchione, the partners set about filling the vacant office and retail before this past year retaining Colliers International as exclusive agent on a deal that ultimately attracted Zurich Capital as first detailed in mid-December by therealreporter.com, with the sale price of $27.6 million equating to $411 per sf. “It was easy to see that the market was going to recover in downtown Boston, and we think it is only going to get better,” says Kavoogian, adding, “We would have loved to have kept it . . . I think Zurich is going to do very well there.” CRRI and NatDev took a similar approach in suburban Boston in prior cycles, paying $76.6 million for 600,000 sf at Unicorn Park in Woburn, a complex visible from Interstate 93 where it meets Route 128/I-95 CRRI/NatDev bought in late summer 2011 when the northern edge of Boston’s office cluster was still struggling. As they were in that deal, Eastdil Secured just advised the partnership in a $98 million disposition of a portfolio pared down in separate sales of individual assets from the original investment. That included $3.05 million for 100 Unicorn Park to a user almost immediately after the Aug. 2011 portfolio purchase, while another building leased by the new owners for medical office functions was acquired in Dec. 2013 by a client of Bentall Kennedy for $26.1 million. continued on page 80

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Besides an affinity for making savvy side deals—be it selling an asset or developing excess land—Kavoogian says the two firms benefit from keeping the portfolio limited in scope. National Development’s handle belies its constricted geographic universe, and CRRI has a similar approach that Kavoogian deems a strong suit. “When you are out there every day in a single market, it is much easier to identify opportunities before others who might not be as focused are able to see their potential, and we think that is one of our advantages in SOLOMON POND OFFICE PARK, MARLBOROUGH MA getting ahead of these cycles,” he observes. but we felt if we could stabilize the rent and the portfolio, with C&W brokers Michael Frisoli, J.R. Having bought Unicorn tenants and sell a few properties off, that would McDonald and Rory Walsh overseeing that LAWRENCE EPSTEIN Park from a pension fund be our strategy,” he reflects in outlining how a assignment. Frisoli also had an equity stake in client of JPMorgan, different result occurred when six of the modest- the venture. The sellers brought in another $8.6 Kavoogian says the inten- sized structures were purchased by individual million from the other half-dozen assets, includtion was to boost occupan- groups, three of them firms intending to own ing the last of those—20-30 Nagog Park— cy from about 80 percent versus rent. “We never predicted the users which InfoTree Inc. paid $1.17 million to acquire in Jan. 2014 with $940,000 from North and stabilize the buildings Middlesex Savings Bank. Eric O’Brien and to await a similar capital Joseph Belsito of O’Brien Commercial Properties source once conditions advised the buyer on that deal, a local firm reloimproved. “We need to be KEVIN O’BRIEN cating from 268 Great Rd. to the building that ahead of the core buyer has 6,625 sf on two levels. and execute our business A similarly successful hands-on investor plan and get the core buyreaping their rewards in 2014 on suburban ers back into the market plays in Andover and Tewksbury was Leggat and we were able to do McCall Properties. Both assets which were that at Unicorn Park,” impacted negatively during the regional slump notes Kavoogian. “The WILLIAM GAUSE were had for bargain-basement prices and institutional investors are Leggat McCall Properties principal repositioned prior to their separate sales as back in the suburbs in a on repositioning 600-800 Federal St. LAUREN VECCHIONE big way, especially along core, net-leased opportunities. An Andover would be as active and pay the higher prices office property acquired empty in June 2010 Route 128.” that was expanded and CRRI/NatDev wrapped up another multi- that they did,” he says. “We knew there would leased to Schneider Electric tiered execution when the last three of nine be some appeal for that, but with the attractive sold last October for $56 buildings and 385,000 sf acquired at Acton’s financing available, it made sense for a lot of million, that exchange comNagog Park in June 2010 for $12.5 million were them, and that worked out very well for us.” pleted with HFF as exclumonetized in a three-building package secured C&W was on that assignment from beginning to sive agent for LMP and by GFI Partners and Matteson Cos., an agree- end, bringing CRRI/NatDev the listing and then Dead River Properties. A ment first detailed by Real Reporter on Dec. marketing the properties for sale while also two-building office park at 12th. That portfolio purchase was a far different helping to lease the excess space. The 210,000 Ames Pond in Tewksbury play than Franklin Street or Unicorn Park, sf bought by GFI and Matteson was at 97 per- JOSEPH BELSITO brought another $15 milaccording to Kavoogian. “We knew an institu- cent occupancy, up from 62 percent when 31, lion. The latter asset was tional investor was not ready for Nagog Park, 33 and 43 Nagog Park were acquired in the acquired by Tritower Financial Group. Yet another dramatic transformation for LMP came at Woodland Park in Andover where lender UBS ERIC O’BRIEN had taken over several underwater properties once the 2008 recession hit and practically gave them away five years ago, with 600 and 800 Federal St. had for a mere $30 per sf, or $8.25 million. This past October, after expanding 800 Federal St. by 75,000 sf and renovating it to LEED standards before signing Schneider Electric to a long-term deal for all of the building, LMP traded the 235,925-sf asset to W.P. Carey for an astounding $56 million. That exchange was handled by HFF which now has 600 Federal St. on the block. LMP principal-in-charge William Gause recalls it “was a different time” when the I-495 assets came available, but as in the case of CRRI/NatDev and Downtown Crossing, his firm 31 NAGOG PARK, ACTON MA continued on page 81

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It was all about the basis with Andover and we felt good we were in a strong position on that.

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“had seen the cycle before” where companies gravitate to stronger locations and better buildings in a tenants’ market and do a reverse commute when the pendulum swings in the landlord’s favor. The Andover approach was to finagle a lease with an existing firm at 600 Federal St. while 800 Federal St. was positioned to capture an anchor tenant by upgrading the facility that had been constructed in 1998 and was completely empty when purchased. Leasing agent Cushman & Wakefield proceeded to identify Schneider Electric, DAVID FITZGERALD which took the entire building to consolidate regional operations. “It is incredible what they did with that building,” HFF Capital Markets Director Benjamin Sayles told Real Reporter. “It is probably the best office BILL CREAN building up there today.” While HFF is not providing an asking price, some observers anticipate the companion building at 600 Federal St. could bring upwards of $115 per sf, a figure that would crest $13 million if that were to occur KRISTEN JENSEN at the 115,000-sf property. Gause declined to speculate about future gains, but concurs that “we were very happy with the investment” that was made when office vacancies throughout I-495 North were into the 30 percent range and sent many assets such as those at Andover’s Woodland Park into foreclosure. While many buildings remain in limbo, Gause credits the resurgent Bay State economy and sticker-shock among companies

225 SECOND AVE., WALTHAM MA

presently in space nearer and in Boston and Cambridge for leading the rebound. “There was a lot of fear in 2009 and 2010 but that has now abated and people feel more confident and that has brought a lot more capital back to the market,” he says. “We have been through it a few times, and we felt good that (Interstate 495) will always have demand from users, and that is what happened” at 800 Federal St. “It was all about the basis and we felt good we were in a strong position with Andover.” LMP is now onto its next adventure, the latest in Boston proper but in an emerging part of the city where partner Multi-Employer Property Trust and advisor Bentall Kennedy are betting ongoing changes such as that which inspired Rubenstein to the neighborhood will translate into the Albany Street district where they acquired two fully leased medical office properties next to Boston Medical Center, the buildings being 660 and 720 Harrison Ave., plus they also landed 100 E. Canton St. and 123 E. Dedham St. for redevelopment and a two-acre

site being eyed for multifamily. “We are in the early stages of figuring out exactly what we are going to do down there, but we are very optimistic about that neighborhood,” says Gause. “Boston Medical Center is a great economic driver and we think there are many other things happening there that should allow us to take advantage of the market as it continues to grow.” Pricing for the package was in the $80 million range, but one estimate says the venture could be nearer $180 million. Of course, that is old hat for LMP which not only serves as operating partner but also a development and planning advisor whose current endeavors include an overhaul of the troubled Cambridge Courthouse in East Cambridge and also has been advisor to the First Church of Christ Scientist as the religious order retools the Christian Science Center in Boston’s Back Bay which in 2014 led to a pair of key land parcel sales, including one less than two acres that went for $65 million and the second for $30 million. HFF was broker on both of those transactions. u

EAST WEST BANK LOAN continued from page 45

ers already had a track record of success, both with M Residential and other development projects in Rhode Island. “They’re very reputable,” says Lam of Yip and Ng, who control the 521 Roosevelt LLC entity handling the millcomplex redevelopment. Lam explains his bank has worked with the developers on other real estate projects over the years, though East West wasn’t involved in the financing of the first two phases of the current mill project. Located minutes from a commuter MBTA rail station and Interstate 95, M Residential is about six miles north of Providence and about 45 miles south of Boston, putting it in a convenient location for anyone commuting to and from either city. East West Bank burst on the local scene in 2010 after it purchased the assets of the UCB, an institution which was based in San Francisco and had offices in Boston, New York, Seattle, Houston, Atlanta, Hong Kong and Shanghai, among other places. Based in Pasadena, East West Bank describes

East West Bank New England Commercial Banking Manager Donna Barry (fourth from the right) at last spring’s groundbreaking ceremony for the M Residential multifamily project in Central Falls, RI, which the lender whose regional office is in Newton, provided the construction financing for through loan officer Ricky Lam. The three participants to Barry’s left are developers Sunny Ng and Louis Yip and project designer Dana Newbrook of Architect Ai Designs Lt. Immediately to Barry’s right are Rhode Island State Sen. Elizabeth Crowley and Cranston Mayor Allan Fung.

itself as a “financial bridge between the United States and Greater China.” The operation whose parent company is East West Bancorp Inc. is led regionally by Commercial Banking Manager Donna Barry. East West Bank doesn’t break out its regional numbers, but the bank last year had about $28.7 billion in assets and a loan portfolio of about $21.8 billion, up 20 percent over 2013. While not providing precise numbers, Lam says East West Bank’s loan activity in this region last year “matched our expectations.” In New England, East West Bank is most active in Massachusetts, which has a larger and more vibrant economy than the Rhode Island market, where unemployment has remained stubbornly high in recent years. But Lam says East West’s financial transactions ultimately come down to the specific pluses and minuses of individual deals, not whether a deal occurs in one state or another. “We’re happy with our performance,” he says of his bank’s overall dealings in New England. u

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RECAPITAL IDEA cent of the $562.5 million their partnership with MetLife paid to land One Beacon St. a few blocks up Beacon Hill from the aforementioned haunt of Cliff and Norm where the 34-story tower can be seen in the show’s opening. The sellers were Allianz and Beacon Capital Partners in a deal where Cushman & Wakefield and Eastdil Secured provided advisory services to the process. A dramatic encore came last October when NBIM paid $1.51 billion to take a 45 percent position in three office towers encompassing 1.7 million sf with Eastdil Secured negotiating terms for landlord Boston Properties and Norges. The assets include Atlantic Wharf and 100 Federal St. in Boston and 601 Lexington Ave. in New York City. Norges already has a 47.5 percent share of One Financial Center in Boston with MetLife after a $390 million invest- ROWES WHARF, BOSTON MA ment by the tandem in late 2013 at that 46During that quarter-century, New England story tower next to South Station. Observers say was not on NBIM’s radar until fund officials in the Norway based SWF favors select relation- Feb. 2013 acquired 49.9 percent of Boston’s 33 ships and those two are also in league at build- Arch St. plus four other towers in New York City ings in San Francisco and Washington, D.C. and Washington DC owned by TIAA-CREF, with Its $882 billion in assets give NBIM plenty of the pension fund giant happily tossing Norges a worldwide recognition as the biggest fish minority position in return for $1.2 billion, a among dozens of domestic and foreign SWFs structure allowing the group to remain in contargeting US CRE. NBIM is followed by the Abu trol of the entire 1.9 million sf portfolio. Due to Dhabi Investment Authority ($773 billion) and onerous tax laws for buying a larger share, SAMA Foreign Holdings from Saudi Arabia many foreign SWFs and other overseas funds ($757.2 billion) based on rankings from the invest in US real estate only up to 49.9 percent SWF Institute that shows a dozen players with of its value. assets each cresting $100 billion, the smallest Prior to 33 Arch St., the recapitalization $175.2 billion for the Investment Corp. of strategy was less overt as a real estate topic in Dubai, a non-commodity SWF founded in 2006. these parts, but Greenberg Traurig attorney and NBIM was launched in 1990. tax expert Jennifer H. Weiss says there is a like-

Photo: Derek Szabo

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ly chance transactions have been happening and simply not getting discussed openly. “I imagine it has been used quite a bit because it is such a powerful tool for investing in real property without encountering (substantial) taxes,” explains Weiss who estimates she has been handling such matters for over 15 years in a 30-plus year career that also includes federal and REIT taxation law acumen and addressing

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Boston has been consistently popular to foreign investors.

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JAMES FETGATTER Association of Foreign Investors in Real Estate CEO

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pension real estate investments of unrelated business taxable income. “It is nothing new,” the alum of Boston University and New York University Law Schools says of attorneys helping clients address the Foreign Investment In Real Property Tax Act and its clunky acronym, FRIPTA. Dating to 1980, the measure applies a levy equal to 10 percent of the amount realized for any US property changing hands by a non-US resident possessing majority control. As with all tax regulations, the process can be complicated to navigate, but Weiss cautions failure to address its existence could prove costly. “There is a lot of money at stake,” she says. Boston Properties agreed to sell Norges the 45 percent piece hometown and its New York City tower in an arrangement brokered by Eastdil Secured’s Boston office team including Brian Barnett, Peter Joseph, Sarah Lagosh, James McCaffrey, Christopher Phaneuf, Molly Padien-Havens and Steffan Panzone. The group declined to discuss specific assignments as part of standard company policy but McCaffrey gave a few macro observations about the foreign markets and their investment regionally which the Association of Foreign Investors in Real Estate has Boston seventh most popular on its 2014 list of US cities most popular for global investment. According to McCaffrey, who interacts regularly among foreign funds while he helps Eastdil continued on page 83

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on the ground in London, such recapitalization arrangements seen at One Beacon St., 33 Arch and 75 State St. “are the wave of the future,” and not merely from overseas SWFs sidestepping taxes or foreign capital on a flight to safety. McCaffrey says there are “a ton of strategies” in which Capital Markets teams are being engaged to assemble a partial ownership agreement, often times with a domestic-based seller taking the minority role as was the case this spring when Taurus Investments traded 160 Federal St. to Beacon Capital Partners for about $135 million but did keep a small position in the 24-story art deco tower and 350,000 sf it entails. That deal also involving Eastdil. Synergy Investments has taken the retention route in multiple instances, its 2014 deal with DivcoWest at 71-77 and 87 Summer St. one such case. After putting the 90,000 sf of Downtown Crossing office and retail holdings up for sale through CBRE/NE, DivcoWest bought it for $31.5 million with funding of $21.4 million via Brookline Bank and Synergy founder David Greaney’s firm keeping a small position. Synergy’s acumen as an operating partner helps enable such arrangements, observers say, a role it has played in other ventures and investors including a Chilean-based partner and GreenOak Real Estate which the pair purchased last year for $143 million (see story, page 3). “It is a major shift that has got to be part of the equation,” McCaffrey says of the recap ONE BEACON ST., BOSTON MA activity, even though partial sales under 50 percent often get left out in annual equity transac- super-low capitalization rates but often are Capital Markets volume into one pool totaling tion data and sometimes not recorded in the uncomfortable in a crowd of competitors, some $11.7 billion that includes the Boston registry of deeds, much to the chagrin of tax owners are instructing brokers to identify select Properties/Norges recapitalization and a 45 perassessors in communities where swaps are qualified bidders and see whether a deal can be cent stake bought at Rowes Wharf from crafted behind the scenes. “Outright tower Blackstone Real Estate Partners by majority occurring sans pricing data. The other debate is whether such an trades are going to be become fewer and fur- owner Morgan Stanley when the former group cashed out its downtown arrangement constitutes an actual sale, and ther between in Boston, and Cambridge investthat appears to depend on various factors and and instead you are going ments of yore. formulas, with the Summer Street package to see these recaps,” Petz McCaffrey concurs regarded as an outright sale by listing brokers at portends, so long as SWFs recap services “have been CBRE/NE that included Christopher Angelone from across the pond take in our playbook a long and William Moylan, and the same stance was a return in the 3 percent or time,” kicking off the taken by HFF after a team including debt and 4 percent capitalization recent line of activity localstructured finance Senior Managing Director range, a level harder for ly in 2013 when Morgan Riaz A. Cassum and Lauren O’Neil Goff took on domestic funds to swalStanley bought out partner the assignment to find a replacement to Cargill low. And the seller finds Blackstone at One Post at 1000 Washington St., a South End office many advantages, Petz Office Sq., that a 50 perbuilding where Rubenstein Partners of notes. The 2015 cap rate cent slice valued in the Philadelphia won that opportunity yet minority on Norges’ infusion into $275 million level. Eastdil owner Nordblom Co. stayed on board as oper- the Boston Properties pool FRANK F. PETZ then assisted Nordblom on was 3.8 percent while the ating partner. JLL Managing Director getting a new partner at Despite the contention there, HFF also regu- REIT enjoys a gain of $1.0 larly processes recapitalizations, so much so billion while keeping operational control, Northwest Park in Burlington when Cargill that Cassum views it among four big compo- including leasing and management. Over the sought to exit there as well. That arrangement nents of the company’s platform, the others next eight years the unleveraged IRR for Boston was calculated to be above $200 million in value. being acquisition, construction and refinancing Properties will average 15.5 percent.. Boston did drop from sixth to seventh in SWFs also tend to hold their CRE longer, services. “It seems to be a growing trend,” he says and has an inkling why that is happening. according to Petz who says the JLL global reach AFIRE’s 2014 survey of the most popular US “Pricing is strong, and owners are willing to of being in 75 countries involving 52,700 cities for foreign investors as upstart Atlanta take some chips off the table and monetize their employees has bolstered his group’s conduit with made a rare appearance in that slot. AFIRE CEO equity in other investments,” he surmises, “and international capital as Boston’s boom period James Fetgatter insists that is not a sign of marthey can also establish a relationship with some draws their attention. “We call them the 49ers,” ket weakness, an element that did result in very strong (capital sources) that might want to he says of a client list comprised of entities from Washington, D.C. slipping to fourth last year, the Asian, European and Middle Eastern regions. and he says Boston has tended to average work with you on a different project.” Petz is among those anticipating a sea Of the top 12 in the SWF Institute list, half are between fourth and sixth in the annual survey change in the big mega-trades that traditional- from Asia, five from the Middle East and NBIM is of the group he has run since 1992. “Boston has been consistently popular to foreign ly have involved a gill-net marketing approach the only European entry. Rather than put its dealings into different investors,” he says. “It never really falls out of and call for offers from a legion of bidders. u Because many SWFs are prepared to invest at categories, Eastdil blended all of its 2014 favor.”

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Outright tower trades are going to be become fewer and further between in Boston, and instead you are going to see these recaps.

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America. It ironically occurred the same day JLL sold Andover Place for client John M. Corcoran Inc. to Mack-Cali, with the asset’s previous trade occurring in Nov. 2007 when Corcoran paid $25.6 million. Boston Realty Advisor’s multifamily team which this spring is entering its fourth year in business posted $203 million in transactions last season, among its high profile deals being the Harvard Club Annex that was purchased for conversion to high-end condominiums and the Unitarian Universalist Association’s Beacon Hill headquarters, MICHAEL BYRNE a four-building assemblage sold in two pieces, with 25 Beacon St. and 6 and 7 Mt. WINDSOR AT BRENTWOOD, NORTH PROVIDENCE RI Vernon Place trading in closing in 2015. (see related story, this section). “It is pretty amazing to see how we have March 2014 for $23.6 million to Sea Dar grown (the multifamily brokerage) from the first Construction as a condo- year to today in terms of the size of the platform minium conversion play, and the sort of listings we are handling now,” the same plan the buyer of says Weissman. “The progress has been incredJASON BRAUN 41 Beacon St. has for that six-story UUA asset bought in early August for $11.5 million by Daniel Rene Commercial Real Estate. “The Universalist Unitarian listing was huge for us,” recounts BRA Multifamily practice leader RICHARD CAWLEY Christopher D. Sower. “A lot PHILIP LAMERE on the 2014 Sale of AvalonBay Danvers of brokers chased after that one and for us to be for $108.5M able to win that and execute it the way we did I think has really helped solidify our place in the Back Bay, Beacon Hill and South End markets.” ible.” The Green District trade conducted for The team that added new talent over the past developer Bruce A. Percelay could be among the year including AEW alum Jennifer Price and highest per-unit pricing of an apartment sale in Benjamin Karp was involved in 24 of the 30 that realm locally, according to Sower. Yet as BRA and others bring their initiatives investment sales transactions done by BRA in 2014, including the well-publicized marketing of to new heights as the multifamily tide lifts all three Allston apartment buildings in the so-called boats, CBRE/NE’s tandem again easily took the Green District developed by The Mount Vernon lion’s share of the activity in a season defined by Co. that brought a total of 283 apartments and continued demand among investors to get into 275 parking spaces to National Development for the metropolitan boom but listings becoming $147 million, with one of the three properties increasingly scant, having either been largely

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People understood this is something you won’t be able to build again.

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MUNROE PLACE, QUINCY MA

picked through after five years of multifamily being the region’s primary safe harbor for core investors and value-add playground to handson developers overhauling the region’s aging housing stock to institutional mettle. Interestingly, as Real Reporter recently detailed, CBRE/NE has recorded another $622 million in sales YTD, putting them on a tortuous pace that would approach $2 billion for 2015 and could have them surpass 2014’s total by mid-summer. “We had a busy (2014), and that activity has not slowed at all this year,” concurs Butler, whose current book of business includes a portfolio of apartment properties being sold coast-to-coast for Equity Residential. The CBRE/NE listings in 2014 were spread throughout southern New England, including 339 apartments in Groton, CT, and a 240-unit garden-style apartment community in North Providence, RI, that brought $25.8 million for an affiliate of GID Investments Advisers of Boston from another Bay State company, SMC Management. That Watertown firm led by Stephen M. Chapman has been on a multifamily buying and development spree throughout New England this decade and also managed to sell at least one of its properties in 2014, the 252-unit Timberwood Commons complex in Lebanon NH, that a $40 million June exchange negotiated through Apartment Realty Advisors (see story New Hampshire section). The Butler/St. John juggernaut was also active from one end of Massachusetts to the other this past year, delivering $30.2 million for Equity Residential in the sale of 204 units at Rolling Green Apartments in Amherst to Beacon Communities while on the South Shore, Stuart R. Levy of Universal Realty paid $25.7 million to AvalonBay for Weymouth Place, that a 211-unit property on 8.2 acres. North of Boston. Village Green in Tewksbury was traded via CBRE/NE for Omni Properties to an affiliate of Ocean Gate Realty Advisers, that a $10.0 million consideration for the 56-unit garden-style building. Perhaps not as humongous as their other endeavors, Butler says the result there “represents an outstanding initial apartment investment for Ocean Gate and marked a successful investment for our client,” developer of the seven-year-old property at 1535 Main St. Besides existing housing stock, CBRE/NE completed a series of raw land transactions zoned for multifamily this past year, among them 28 acres in resurgent Marlborough where Fairfield Residential will construct 225 luxury continued on page 85

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units at the vacant lots on Ames Street and Boston Post Road across from Marlborough Technology Park. The Gutierrez Co. reaped $5.8 million in that exchange. CBRE/NE just a few months earlier had brokered the $14.8 million sale of 24 acres at Forest Street in Marlborough where Atlantic Management Corp. sold the land to AvalonBay for another 350 units at that former Hewlett-Packard campus now being converted to a diverse mixed-use complex. “We have seen a lot of action on our land listings,” Butler observes, pegging the number at a minimum of three dozen sites traded since MAXWELL’S GREEN, SOMERVILLE MA 2009 and last year including 330 Paradise Rd. in Swampscott which fetched $5.3 million to purchase a site permitted for 185 units, another $4.2 million for 176 units at Cabot Ridge in Hudson and a huge pact yielding $20.6 million was completed at Marina Bay in Quincy, a blockbuster deal first detailed last spring by Real Reporter in which the Marina Bay Club will be converted to residential. High-powered developer Hines Residential took on that project. Land sales were a substantial part of JLL’s Multifamily team activity over the past year, and that has also continued into the opening of 2015, says JENNIFER ATHAS Travis D’Amato. The group he runs with colleague Michael Coyne did peddle 1440 BEACON ST., BROOKLINE MA several marquee properties in 2014—seven for a total of approximately $125 million— but D’Amato says the squeeze on existing inventory is pushing many PHILIP LAMERE down the development path. One intriguing listing came in JLL Capital Markets being retained to sell the One Cabot Rd. office building in Medford where the real estate services firm devised a plan for VILLAGE GREEN, TEWKSBURY MA BRENDAN REILLY their client to lop off four acres and market as a multifamily site, not only accreting an additional $19.2 million in its sale to Mill Creek Residential but also enhancing the LWP components of the Wellington Circle area where 297 apartments will be erected. A stalled development site in East Boston was finally moved off the drawing boards by a JLL site sale in early 2014 to Gerding Edlen, the West Coast developer taking Boston by storm with several new projects this decade. The $7.2million East Boston purchase of 3.9 acres and a decrepit factory led to a groundbreaking in Dec. for 259 units at 6-26 New St. to help ease the city’s chronic housing shortage. “That GERDING EDLEN PROJECT AT 6-26 NEW ST., EAST BOSTON MA was a nice one,” acknowledges D’Amato of helping get the $132 million venture moving academic and administrative purposes but has university,” Suffolk Senior Director Gordon King towards reality after being mothballed for become among a slew of Beacon Hill organiza- of Facilities Planning said after that deal which decades, with Portland, OR-based Gerding tions cashing in on the hot real estate market. he explained was part of the school’s efforts to Edlen known for its environmentally sensitive D’Amato, Coyne, Vice President Robert Borden “reshape its campus” and relocate to a new projects. and Associate Brendan Shields were on that building at 20 Somerset St. Brookline developer Jeffrey Feuerman was assignment that resulted in a $15 million trans“The amount of activity we got on that was the winning bidder on 32 Derne St. on Beacon action. “JLL effectively managed the sale process insane,” says D’Amato, who reports that capital Hill—aka the Fenton Building—where Suffolk for us and succeeded in a relatively quick closing continues to embrace multifamily even as there University has heretofore used the building for and obtaining the highest possible value for the continued on page 86

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appears to be a softening on rental rates at the upper end of the market. “Concessions are becoming more common, usually one or two free month’s rent, but the demand is still there and people still want to buy into the market,” he says, with Andover Place and Munroe Place also generating substantial interest. The Wakefield strategy by developer Philip Pastan was to incorporate the contacts from two active multifamily groups versus one, and D’Amato reports a collegial relationship with BRA. “We really worked as a team on that one,” he says. True North Capital CHRISTOPHER D. SOWER Partners funded that deal RICHMOND VISTA, WAKEFIELD MA with $19.5 million in Fannie Mae monies origi- also in the mix. “You don’t see foreign capital nated by Walker & Dunlop. looking so far outside of Boston, but it is such a In a Real Reporter article unique asset and so well done, people underafter he purchased the stood this is something you won’t be able to asset, Bruce acknowledged build again,” he says. In the end, though, a local his platform favors value- group won the day in Waltham-based DSF, add endeavors but was which was funded by $70.5 million from Walker BENJAMIN KARP drawn by the cash flow, & Dunlop. Adds Lamere: “It was a great listing stability and quality of the for us; we were happy to have been involved.” Richmond Co. developTargeting multifamily north of Boston over ment that includes a club- the past two years, Taurus Investments and house and fitness center Waterstreet/PhilMor Real Estate Investments last on top of high-end finish- March paid $20.0 million for 180 units at 82 es. The Concord based firm Brick Kiln Rd. in Chelmsford from Corcoran has acquired a dozen prop- through the ARA/IPA team. Leader Bank financerties for over $100 million ing of $16.2 million was used to acquire The JENNIFER PRICE during the past two years, Meadows, a 10-building complex dating to also in 2014 buying apartment buildings in 1987. Taurus President Peter Merrigan noted it Brighton and Somerville was the second such endeavor after buying Apartment Realty Advisors was enjoying Cabot Crossing in Lowell the prior year. “Both steady growth in New England when the opera- properties represent quality Class B assets locattion was sold to IPA just as the 2014 pipeline ed within one of I-495’s strongest job markets,” was heating up and shortly after the blockbuster says Merrigan, adding the partnership “will look Danvers deal was finalized, a transaction that to build off the previous owner’s success with the could be the largest exchange of its type last assets by making strategic capital investments year for a single asset regionally. Team member into each.” PhilMor is led by experienced real Philip Lamere acknowledges that is a rare feat estate veterans Phillip Bakalchuk and Morgan for a property not in the core urban marketplace, Hanlon who are pursuing various product types but maintains the quality and size of the devel- regionally. opment, strong sponsorship and solid demoTaurus and Corcoran were familiar graphics in the Danvers area made investors names in the 2014 Real Reporter Million Dollar stretch their geography, with overseas capital List which posted 105 multifamily exchanges of

WEYMOUTH PLACE, WEYMOUTH MA

$1 million or greater from $1.02 million up to the $108.5 million paid by DSF Advisors for the AvalonBay remake of the shuttered Danvers State Hospital into market rate rentals through ARA. CBRE/NE also recapitalized a recently built Chelsea apartment property Corcoran developed while the same developer separately dispatched another asset in Framingham, in that case yielding $7.8 million from 46 Irving St. In Lowell, Taurus paid $20.2 million for 252 units that Corcoran had bought for $7.95 million in Dec. 1995. Commerce Bank & Trust Co. funded that purchase with $17.0 million for a project built in 1987. Corcoran also borrowed $33.8 million from Walker & Dunlop for a development site on Hartford MICHAEL COYNE Turnpike in Shrewsbury and $30.0 million from Red Mortgage Capital on a Quincy development. Other deals of note for ARA/IPA in brokering an estimated $200 million last year was $40 million paid for a New Hampshire comBRENDAN SHIELDS munity built by SMC Management and Hillside Terrace in North Providence that was sold for Boston-based apartment investor Jeffrey Libert. The ARA team has always had a vibrant land sales business, but Lamere is among those reporting the pace has quickened. “We are seeing increased interest in sites,” he says. “It can be tricky because construction costs are rising and the timing isn’t always (guaranteed), but people still look at the demand and where rents are headed, and they think this is a good time to build.” Lamere maintains the cost of land in urban centers is making developers expand their geographic footprint, providing hope for such areas as southern New Hampshire, Greater Hartford and Rhode Island, the latter state hit hard by the recession but one Lamere says is catching the eye of various investors clamoring for higher yielding initiatives. “It is a trend we are seeing,” he says, with communities such as Quincy down to Providence expected to garner increased business. On the land side, a 25-acre parcel in West Quincy was acquired by AvalonBay after receiving approvals in late 2014 for construction of 396 apartments. The Dolben Cos. of Woburn bought six acres near Bell continued on page 87

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Circle in Revere in early 2014 on which it intends to build several hundred units, with that deal completed under the ARA moniker. Lamere says the change of companies was a bit of a complication for the team last year, but expresses comfort under the new organization, with Marcus & Millichap among the country’s leading brokerage houses. “It has been a lot of fun,” Lamere says. “They have a great research department and we are very happy with the platform.” The only team member who opted out was Terence Scott, a specialist in northern New England multifamily who has struck out on his own. Besides the IPA affiliation, Marcus & Millichap has another multifamily crew in town as part of the group led by Robert Horvath and Todd Tremblay, with Dennis Kelleher and John Pentore overseeing that program that did deals statewide 114 GORE ST., CAMBRIDGE MA in 2014, including a $9.6 million exchange of 16 buildings and 262 units in Springfield. “It was a great portfolio and we got a ton of action on it,” Kelleher conveys to Real Reporter, estimating upwards of 40 DENNIS KELLEHER showings that Kelleher attributes to the clamor for multifamily and need to look beyond Boston for opportunities, plus the amount of units involved, low interest rate environment and Springfield’s budding casino industry which JOHN PENTORE is seen by advocates as a THE MEADOWS, CHELMSFORD MA way to revitalize the long-suffering city. The Springfield conclusion was part of a year in which the Marcus & Millichap team tendered over $50 million, with a listing in metropolitan Boston underscoring just how challenging it is to buy in the urban multifamily arena, that deal being seven apartments in Somerville that delivered $265,000 per unit in a pair of non-descript rowhouse units. “Somerville is extremely hot right now, and we knew we were going to get good pricing, but I was actually surprised at how aggressive people were for that one,” Kelleher recounts of 192-194 Central St. “The response was overwhelming.” The group also got multiple suitors chasing 33 units in Worcester ultimately bought by a Boston group. “That is a definite value-add play,” Kelleher explains. Yet another regional group active throughout the area and now doing substantial busiTHE RESIDENCES AT STEVENS POND, SAUGUS MA ness in Connecticut just outside New York City is United Multi Family, a Quincy operation which went for $1.57 million, or $262,500 per unit., certainly was on the job right up until closing with Cawley and Braun on that assignment as time of 2014, having brokered on Dec. 30th the well. The building was acquired by UEP Gore $6.72 million sale of 114 units at 56 St. Joseph LLC and manager Joseph P. Bisognano III, who St. in Fall River. The brokerage duo of Richard financed the purchase through a $1,600,000 Cawley and Jason Braun wrapped up that deal million loan from Brookline Bank. Other 2014 Bay State closings orchestrated on behalf of Walter L. Bronhard, owner since paying $125,000 in Aug. 1986. Eastern Bank by United Multi Family included $4.21 million delivered $5.3 million in financing to Brighton- paid in Worcester for 74 units at 44 Byron St., based buyer Leonard J. Samia to facilitate pur- that spring exchange occurring on behalf of chase of that enclave of brick residences which Edwidge Development TR and its manager Michael Mele and bought through entities run date to 1897. United Multi Family witnessed a similar out- by Karim Jouki. Country Bank for Savings was come as Marcus & Millichap did in Somerville as the backer on that deal with a $3.75 million agents of 114 Gore St. in Cambridge, a six-unit, loan. A month later in late May, Cawley advised aluminum-sided residence built in 1900 on a the same buyer on purchase of 74 units at 3, 6 2,400-sf parcel and badly in need of rehab that and 10 Henry Ter., also in Worcester, and in that

case, using $3.82 million from Country Bank for Savings. Mele subsequently paid $3.0 million for 16 apartments in Boston’s Jamaica Plain neighborhood, a deal at 280 Hyde Park Ave. handled by Braun and Cawley. UMF got around in 2014, not only in Connecticut and its home turf but also up into New Hampshire and Rhode Island, with one Granite State deal in Lee bringing $2.18 million for 28 units at 1-5 Darby Field Common and in Rhode Island, 24 units in East Providence at 3226 Pawtucket Ave. went for $1.7 million, or $70,833 per unit for apartments built in 1970. The same pricing went soon after for 25 units at 250 School St. in Pawtucket. “We had a very good year,” Cawley continued on page 121

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Seyon St. in Watertown. The 94,275-sf mixeduse facility was sold for $11 million by Illinoisbased Hilco Real Estate LLC, which itself had only recently purchased the property. Another late-year transaction included the $21 million purchase of 14 Aegean Drive in Metheun. The buyer of the 234,000-sf industrial property was Reep-Ind Aegean MA LLC, managed by New York Life Investment Management, and the seller was AEW LT 14 Aegean Drive LLC, managed by AEW Capital Management. The building CATHERINE MINNERLY AND OVAR OSVOLD OF NAI/HUNNEMAN HELPED A FIRM ACQUIRE 560 TURNPIKE ST. had been last sold for IN CANTON FOR $1.5 MILLION THAT WILL ALLOW THE BUYER TO CONSOLIDATE SUBURBAN INDUSTRIAL OPERATIONS IN THE 21,000-SF BUILDING THAT DATES TO 1967. $18.3 million in early 2006, thus giving AEW a nearly 15 percent mark-up on its investment. In another late-year transaction, Ivy Brigham THOMAS PHILLIPS Property LLC, managed by Ivy Realty, paid $14.5 million for industrial properties at 19 and 41-53 Brigham St. in Marlborough; the seller was Foothills Corp. The 67,800-square-foot Brigham St. property, constructed in 1984, was last sold for $1.2 million in 1995. Also late last year, Watertown Gables LLC, managed by Gables Group in Atlanta, spent $20.5 million for 202-204 Arsenal St. and 58 Irving St. in Watertown. The latter property at 58 CALARE PROPERTIES SPENT $11.0 MILLION IN 2014 FOR SEYON ST. IN WATERTOWN. THE 94,275-SF MIXEDIrving is a 126,400-square-foot industrial build- USE FACILITY WAS SOLD BY ILLINOIS-BASED HILCO REAL ESTATE LLC AFTER A SHORT-TERM HOLD. ing. Though built in 1948, its previous sale was It is not just e-commerce companies and for $5.8 million in 2008. The most recent seller like Amazon and other big and small tenants was Cresset W/S Venture LLC, managed by needing rapid turnaround of their products to other hot players driving the market. The entire consumers. state economy has generally rebounded from Cresset Partners. In total, the vacancy rate for Greater the recent Great Recession – and the industrial Such deals are being driven by old-fashioned Economics 101: High demand and low Boston’s 57 million sf of warehouses space was market is prospering along with that general recently running at about 12 percent, recovery, he says. The industrial market is simply supply, at least for quality buildings. Chris Skeffington, a senior vice president at Skeffington said. The vacancy rate for the getting an extra boost from the shortage of Transwestern RBJ, notes that warehouse vacan- region’s 27.2 million square feet of flex-space quality, high-bay warehouses in the area, he cy in the Greater Boston area is now at a 12- was about 16 percent. The vacancy rate for the adds. Last year, Transwestern RBJ represented year low. There has now been 10 straight quar- area’s 14.9 million square feet of manufacturing ters of positive warehouse absorption in the space was about 12 percent. “It has been a both the seller, TA Associates Realty, and the Boston area, driven by e-commerce companies pretty impressive run,” says Skeffington of the buyer, New York Life Insurance, in the $26 milindustrial-property market in general. lion sale of 55 Lyman St. in Northborough. The STATS ‘14 261,000-sf, high-bay distribution facility is fully leased. Another Transwestern RBJ deal involving the same seller and buyer was the $23.7 million exchange of a 235,000-square-foot facility at BUYER CAPITAL GROUP ACQ. AMT. (IN $M) # PROPERTIES 1 Prudential RE Investors Institutional 106.5 6 20 Freedom Way in Franklin. 2 Spaulding & Slye Institutional 106.5 6 In case you have not done the calculations, 3 Jumbo Capital Management LLC Institutional 57.0 2 both of the sales were slightly above $100 a 4 Bulfinch Cos Private 52.9 1 foot, both records for high-bay warehouses in 5 Spear Street Capital Equity Fund 43.0 1 the Boston area, says Skeffington. 6 King Street Properties Private 39.8 1 “There’s a lot of national interest in these 7 Asset Preservation Inc Private 32.2 1 types of properties,” he says. 8 Massachusetts Institute of Technology User/Other 30.5 1 Geographically, the resurgence in the indus9 Angelo Gordon Equity Fund 26.2 1 trial-property market has been pretty evenly 10 AEW Capital Mgmt Institutional 26.1 1 spread out in the Greater Boston area. In the 11 Farley White Interests Private 24.2 2 areas south of Boston, Cathy Minnerly, 12 Pizzagalli Properties Private 21.8 1 Executive VP at NAI Hunneman, says last year 13 Gramercy Property Trust Public 21.5 1 was simply terrific. “It was very positive with a 14 Ram Management Private 21.1 2 very strong ending. It’s been a very high-volume 15 GFI Partners Private 21.0 1 environment.” 16 Gables Residential Private 20.6 1 In the Route 128 South area, Minnerly rat17 Peter Hanson Real Estate Private 16.8 1 tles off a bunch of lease deals in excess of 18 Greenfield Partners Equity Fund 15.6 4 100,000 sf last year: At Boston Business Park in 19 HN Gorin Private 15.5 4 Hyde Park, at 480 Sprague St. in Dedham and at 20 Resource Capital Group (MA) Private 15.0 1 100 Rustcraft Rd. in Dedham. 21 Ivy Equities Private 14.5 1 In the Interstate 95 South area (toward 22 Rubenstein Partners LP Equity Fund 13.0 1 Providence), Minnerly notes a total of 590,000 23 Genesis Management Private 13.0 1 sf of leases in 14 transactions, including major 24 Calare Properties Private 12.4 2 continued on page 89 25 STAG Industrial Public 11.6 1

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lease deals at 210 Grove St. in Franklin, 380 South Worcester St. in Norton and 31 Plymouth St. in Mansfield (a Cabot park property). In the Route 24 corridor, there was a total of 800,000 sf of deals in 10 transactions, including an Amazon lease of 330,000 square feet of distribution space at 1000 Technology Dr. in Stoughton. Other major deals in the area, though not as big as the Amazon transaction, involved properties at 57 Littlefield St. in Avon, 11 Campanelli Dr. in Freetown and 15 Campanelli Cir. in Canton. Such intense leasing activity partly explains all the buying and selling going on in the Boston-area market, says Minnerly. Combined with historically low interest rates, the market conditions were ripe for multiple sale deals in 2014, particularly toward the end of last year, according the veteran broker who teams with NAI/Hunneman Vice President Ovar Osvold as a key leasing team in the markets south of Boston.. So the big question within the industrialproperty sector now is: When are new products going to be built to support the growing demand for quality facilities? Amazon, the online retail giant, has already informed the city of Fall River that it wants to build a one-million sf distribution facility in the South Coast Life Sciences and Technology Park. That would be in addition to the 330,000 square feet it leased last year at the former Reebok distribution center in Stoughton. In Fall River, Amazon said a distribution center could create up to 1,000 jobs and might cost up to $200 million in capital investments and equipment. But it is not just hotshot tech companies that want and need more warehouse and distribution space in Massachusetts. Last fall, Martignetti Liquors, the regional wine and liquor distributor, signaled it wants to build a new 800,000-sf distribution center in Taunton’s Myles Standish Industrial Park. The nearly $100-million facility would employ about 800 workers. And there are already moves

TRANSWESTERN RBJ WAS THE BROKER OVERSEEING AN INDUSTRIAL EXCHANGE BETWEEN TWO INSTITUTIONAL PLAYERS, WITH AEW CAPITAL SELLING 14 AEGEAN DR. IN METHUEN FOR $21.0 MILLION TO NEW YORK LIFE INVESTMENT MANAGEMENT. THE 234,000-SF PROPERTY HAD BEEN HELD BY AEW SINCE PAYING $18.3 MILLION IN JUNE 2006.

underway for speculative warehouse projects across the region, including one at Myles Standish. Technically, with the warehouse vacancy rate standing at 12 percent in Greater Boston, there should be room for many companies to store their goods in properties. But too many of the properties are low-bay facilities without upgraded sprinkler, electrical and other

Andes Capital and Rhino Capital teamed up to buy a 200,000-sf asset on 5.9 acres in Westwood at 26 Dartmouth St. mechanical systems. In addition, available spaces within individual properties are just too small for many companies, which don’t want to break up their warehouse and distribution operations among many different locations, industry officials stress. That is partly why an estimated three million square feet of new industrial space is now in the planning stage within the area, says JLL’s Petz. No one knows exactly how much new space might be needed, officials say. If they did know, then developers would already be building exactly what is needed, industry officials note. Still, some are privately taking general stabs at how much new warehouse space in the Boston area might need—and the guesses usually amount to millions of square feet. Until new products come on line, though, market experts maintain there is going to be a scramble for existing space, both by tenants and

INDUSTRIAL Qtr

Volume

YOY % Change

# of Props

Total Units

Avg $/Sqft

13H1

$611,045,775

7,693,977

$79

13H2

$485,343,934

6,766,483

$69

14H1 14H2

$451,382,581 $465,441,340

-26% -4%

49 48

7,384,504 5,792,607

$61 $82

* Price per Unit/SqFt calculations are rolling quaterly averages

BOSTON INDUSTRIAL STATS

potential investors. Last quarter was particularly frenzied on the sale-and-purchase front. Here are some of the other large and small industrial sale-purchase deals that occurred just in the last quarter alone of 2014: Andes Capital and Rhino Capital teamed up to buy a 200,000-sf asset on 5.9 acres at 26 Dartmouth St. in Westwood for $14.7 million in a deal with 26 Dartmouth Street Realty TR and its manager, veteran developer Terence W. Conroy who bought the structure that dates to 1969 in July 1998 for $800,000. In Boston’s inner suburbs, Oakland Street Partners LLC picked up 50 Oakland St. in Watertown for $3.2 million from Komp Realty Trust II and its manager, Kevin O’Donnell. The 35-year-old structure encompasses 14,975 sf located on two acres which the seller had held since paying $1.75 million in Nov. 1985. A Billerica truck terminal brought $9.3 million in its acquisition by American Realty Capital from NATMI National Truck Terminals. The 6.3acre property at 19 Republic Rd. dates to 1975 and has a build out of 22,250 sf which the seller had owned since paying $6.4 million in Sept. 2010. On Cape Cod, a Florida firm paid $8.48 million for 33 Village Common Dr. in Falmouth from another outside group, Storage Pros Falmouth LLC, managed by Ian M. Burnstein of Michigan, owners since paying $4.6 million in Aug. 2009. The buyer is SS Falmouth LLC, an affiliate of CCN Storage Partners of Orlando, which secured the 18-year-old facility that totals 40,400 sf and is set on 4.1 acres. Closer to Boston, Grander Capital Partners picked up 110 Shawmut Rd. in Canton for $5.9 million from an entity managed by Paradigm Properties in an all-cash deal for the 70,350-sf building that was constructed in 1987 on 5.3 acres. continued on page 95

GRANDER CAPITAL PARTNERS HAS PURCHASED 110 SHAWMUT RD. IN CANTON FOR $5.9 MILLION FROM PARADIGM PROPERTIES. THE 70,350-SF BUILDING WAS ERECTED ON A 5.3-ACRE PARCEL IN 1987 AND MOST RECENTLY CHANGED HANDS IN APRIL 2007 WHEN IT WENT FOR $6.75 MILLION. BOSTON PRIVATE BANK & TRUST BACKED THE BUYERS WITH A $5.9 MILLION MORTGAGE.

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ALBANY ROAD continued from page 40

school’s Owen Graduate School of Management. “I have a lot of friends and relationships there,” says Knisley of Nashville. “It was always on our radar screen.” But his Southeastern strategy isn’t limited to Tennessee alone. Last year, Albany Road also purchased a seven-story, 140,000-sf office building in northwest Atlanta for $20 million. Albany Road is also eyeing the purchase of four other properties in the Atlanta area. Albany Road’s immediate investment goal: Bringing its Southeast holdings on a value par BRANFORD BUSINESS CENTER, BRANFORD CT with its Northeast holdings. In that vein, Albany lion. Now it has another storage fund and has Road is working on a already closed this year on two facilities, in potential major deal in Waterbury and Columbia, CT, costing about $3 MARTA DRAGOS Charlotte, NC says Knisley, million to $4 million each. Even after the new who declined to give fund is exhausted, Knisley says he hopes to do details. about $20 million a year in self-storage acquisiLooking ahead, Knisley tions over the next four years. says he also can see one On the Connecticut office front, the firm day expanding Albany bought Branford Business Center in Branford, a Road’s investment reach five-building, institutional quality complex totalinto the Southwest, per- ing 143,000 sf located at Exit 56 of Interstate haps in Texas, and in the 95 that the firm paid $14.1 million to secure BRUCE NOLEN mid-Atlantic region, backed by $9.25 million in fixed-rate debt delivthough he stressed the firm won’t rush into any ered by Cantor Commercial Real Estate featurpurchases. ing 10-year terms with three-years of interest All of this doesn’t mean Albany Road has only payments and all-in rate of 4.9 percent. A tapped out the Northeast. In mid-March, Albany second loan from Brookline Bank was secured Road closed on the $35 million purchase of 100 for $1.25 million, also with three years of I/O Middle St. in downtown Portland, Maine, for a payments and a floating rate debt of 3.75 pertotal of 200,000 sf of office space. cent. And then there’s the new $25 million storAlbany Road continues to eye opportunities age fund. in Massachusetts as well, with a major 2014 Previously, Albany Road had purchased conquest coming when the firm paid $20.8 mileight self-storage facilities in New England, six lion in mid-December for the Westboro of them in Connecticut, for a total of $25 mil- Executive Park in Westborough, a three-build-

CBRE/NE RI RETAIL SALE continued from page 45

England and beyond on the retail front. As to Rhode Island, he explains demand from top investors such as Dividend Capital is not quite market wide. “It is really property specific” as to how aggressive capital might be on an opportunity, with Salt Pond garnering a wide berth of suitors. “That was to be expected,” the veteran retail expert says. “It is a spectacular property in a very strong demographic with enormously high barriers to entry and incredible tenants.” Celebrating its 30th year in business, Salt Pond Shopping Center is located at 91 Point Judith Rd. Led by a 60,000-sf Stop & Shop, the tenant roster features other five-figure occupants in Marshall’s/HomeGoods with a 55,000sf expanse and 11,000 sf leased to Family Dollar. Other well-known retailing concepts in the mix there are Game Stop, Great Clips, Sports Authority, the UPS store and a Vision World unit. Not only is 80 percent of the Salt Pond square footage occupied by national retailers, the top two anchors there have consistently outperformed chain averages, and account for 62 percent of gross revenue, according to informational materials in circulation, and their allure has been deemed a boon in attracting consumers to the 35.3-acre complex from venues farther a field, “thereby significantly expanding

the reach and productivity of the property.” That draw is especially tantalizing as the population swells from an estimated 2,550 in a onemile radius and a hair under 20,000 at three miles to being over 39,000 in a five-mile circle, with average yearly household income on the outer edges at $90,450 compared to $84,250

“

Elmwood Plaza offered Inland a rare opportunity to acquire a newly constructed grocery anchored property in an established New England market.

”

NATHANIEL HEALD VP, CBRE/NE Capital Markets

within one mile. Located on the Atlantic Ocean just south of Newport, Narragansett has high barriers to entry for future retail competition, CBRE/NE also conveyed to bidders in promoting the opportunity set just off Route One where it joins Route 108 (Point Judith Road). The listing was marketed by the Boston team as part of

ing, 216,000-sf asset marketed by JLL for Cornerstone Real Estate Advisors that was pursued by numerous prospects before Albany Road emerged victorious riding a bid that was backed by $19.3 million in financing from East Boston Savings Bank. Developed in the 1980s, Westboro Executive Park consists of 110, 112 and 114 Turnpike Rd. and was at 80 percent occupancy when secured by Albany Road. The JLL Capital Markets group effort was led by Managing Director Frank F. Petz, Managing Director Jessica Hughes and Vice President Matthew Sherry. Albany Road now owns 2.7 million sf of commercial space valued at approximately $300 million. As the portfolio continues to expand, Albany Road has been adding experienced professionals to support the platform with key team members now including Northland Investment Corp. alum Bruce Nolen as managing director of asset and portfolio management, Investment Manager and accounting whiz Mark J. Tryder and Investment Manager Marta A. Dragos, who joined in Feb. 2014 after seven years with Newmark Grubb Knight Frank. u CBRE’s National Retail Group. Salt Pond Shopping Center’s successful conclusion was part of a busy year for CBRE/NE’s retail contingent that did another cross-border deal involving a Stop & Shop-anchored asset in Connecticut earlier in the season when they handled both sides of its $14.2 million exchange between seller Winstanley Enterprises of Massachusetts and Inland Real Estate. CBRE Stamford brokers Jeff Dunne and David Gavin were on that trade involving 80,000 sf at Elmwood Plaza in West Hartford, a one-time industrial property upgraded to retail by Winstanley, a Concord, MA-based real estate firm which has developed a focus on renovating infill or under-performing retail, the Rhode Island Mall reclamation among its most dramatic examples. “We are pleased to have facilitated this transaction on behalf of Winstanley Enterprises,” Heald conveyed of the client’s award-winning project that has been feted for its neighborhood transformation, with the CBRE/NE retail specialist adding, “Elmwood Plaza offered Inland a rare opportunity to acquire a newly constructed grocery anchored property in an established New England market.” The plaza that came on line in 2010 is designed with Stop & Shop’s “small format” prototype that provides unique dining and shopping formats as part of the approach. u

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NORTH QUINCY PLAZA, QUINCY MA

BJ’S WHOLESALE CLUB, FRAMINGHAM MA

INVESTORS SHOP RETAIL continued from page 14

Geoff Millerd, executive director of retail sales at Cushman & Wakefield’s Capital Markets Group, tells Real Reporter that C&W’s New England team had their “best year ever” with approximately $400 million in regional transactions. “Cap rates on A product have just about bottomed out and the pricing is about as good as it’s going to get—at least for the time being—and on B and C product, cap rates continue to compress,” Millerd relays. “Supermarketanchored A product inside Route 128 and in select markets out to Interstate 495—depending on the property—are generally selling in the mid-to-low 5 CHRISTINA KINDER (percent) cap range, which far exceeds anything we saw in 2007 pricing peaks.” The largest of the Greater Boston deals for C&W was its Metro Boston Retail Portfolio exclusive that featured three Shaw’s-anchored grocery centers in Cohasset, Easton and Hanover and a standalone Hannaford Brothers SHAW’S SUPERMARKET, COHASSET MA in Waltham, a deal first detailed by Real Reporter in last June. Millerd, C&W New largest New England store and a Sam’s Club England President Robert E. Griffin Jr. and that was sold to RK Centers by C&W client Associate Director Justin Smith oversaw the sale Madison Properties, as well as a pair of of the portfolio by Angelo, Gordon & Co. and JV Springfield deals that saw the $31.0 million partner WP Realty to Phillips Edison & Co., a trade of Five Town Plaza (a 328,000-sf Big Y Cincinnati-based REIT making its inaugural foray into the region. “The interest in buying Shaw’s-anchored centers has gone up dramatically” since Cerberus Capital Management acquired Shaw’s from Albertson’s in 2013, Millerd divulges, with his firm also harvesting a property anchored by Shaw’s in Portsmouth, NH, last year for $24.6 million (see New Hampshire section). A second, separate Granite State shopping center sale orchestrated in Derry by C&W in 2014 also detailed in the New Hampshire pages reflects shifting sands for retail investors as urban product dries up or becomes too pricey, Christopher Angelone according to Millerd. “The institutional investors CBRE/NE principal have had to redefine what their geography is because there’s just not enough product,” says Supermarket-anchored shopping center) by the retail industry expert. “In previous years, REIT Urstadt Biddle Properties Inc. to Phillips institutional money wanted to buy dominant Edison, as well as the $9.8 million trade of supermarket-anchored retail in primary markets another Big Y-anchored property, the 98,000-sf (inside I-495), but now institutional money has Boston Commons which Inland American Real had to redefine what they want to buy to allow Estate Trust dealt to fellow REIT American Realty Capital Properties. The team also brokered the them to acquire in those secondary markets.” To wit, C&W brokered the $49 million sale sale of the Price Rite-anchored Cromwell of Worcester Crossing (in Worcester) last year, a Commons in Cromwell, CT, from private group 386,850-sf center anchored by Walmart’s Lehigh Cromwell LLC to New England

“

People who had acquired assets at a different point in the real estate cycle saw it was a compelling time to bring those assets to market for sale.

”

Investment Partners for $12.7 million. C&W also brokered a number of sales within Route 128, including Inland’s $26.5 million purchase of the BJ’s Wholesale Club in Framingham from Samuels & Associates; the $23 million buyout by Kimco Realty of JV partner LaSalle Investment Management for the 80,000-sf Hannaford-anchored North Quincy Plaza; the swap of the 50,900 sf Shoppes at Page Pointe in Stoughton by Edens to Inland Real Estate for $15.8 million; and the $15.9 million sale of Sumner Street Marketplace in Norwood by National Development to Quincy & Co. The largest single retail deal in Greater Boston (and eighth largest nationally) for 2014 was the 24-property, $270-million Kimco acquisition of the former Stop & Shop portfolio from Bollard Group (see feature story, page 14) that was brokered by the Boston office of HFF, led by Senior Managing Director James M. Koury and Executive Managing Director John Fowler. But that deal was just the tip of the iceberg for Koury and his office, which marketed just under a $1.0 billion in assets and closed about $750 million in 2014. The 30-plus-year retail veteran attributes the robust year to the belief on the part of retailers that they are on firmer footing and are more willing to expand again. “One reason is that the economy in the Northeast has continued on page 92

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INVESTORS SHOP RETAIL continued from page 91

been strong, and two, the occupancy rates in the Northeast have been high at over 94 percent. And the capital markets have been flush with capital, so this is a great area to own retail.” Koury and HFF also represented Kimco in the $27.2 million sale of Waterbury Plaza, a 141,500 sf Stop & Shop-anchored center in Waterbury, CT, to Slate Properties, a REIT focused on U.S. groceryanchored real estate; seller H.J. Heyman Sons in the sale of Fairbanks Plaza, a 149,600-sf Kohl’s-anchored FIVE TOWN PLAZA, SPRINGFIELD MA retail center in Keene, NH (along with Director THOMAS BLAKELY Benjamin Sayles and Senior Real Estate Analyst Brett Paulsrud) to Cambridgebased investment firm Unison Realty Partners for $13.4 million; and Hirschfeld Properties in the $10.0 million sale of a 24,600 sf CVS-anchored SEAN KENEALY shopping center, Boulevard Shops in West Hartford, CT to Lerner Properties. Outside of New England, Koury and HFF oversaw the $101 million sale of Logan Town Centre, a 715,800 sf, grocery-anchored shopping center in Altoona, PA, that was harvested for seller AVR Realty Co. to an affiliate of The Kroenke Group of Columbia, MO. CBRE/New England's retail team of BOULEVARD SHOPS, WEST HARTFORD CT Angelone, partner William Moylan and Senior KGI Properties in the transaction. They also VP Nat Heald also had a very productive year in oversaw a transfer of Turnpike Plaza, a 2014, brokering multiple deals throughout the 131,750-sf Whole Foods-anchored center at region. Transactions included the November 253 Amherst St. in Nashua, NH, that acquired acquisition of Salt Pond Shopping Center, a by Massachusetts-based Chop Acquisitions 185,000-sf Stop & Shop-anchored center in from Allen Nashua LLC for $27 million; RK Narragansett, RI, by Denver-based Dividend Centers’ purchase of the 184,000-sf Speedway Capital Diversified Property Fund (DPF) for Plaza in Westborough (anchored by Burlington $39.2 million, with CBRE/NE representing seller Coat Factory and Stop & Shop) for $18.7 million from Regency Centers; and the Federated Cos.’ STATS ‘14

RETAIL J TOP GUNS 2014

BUYER Kimco

CAPITAL GROUP Public

ACQ. AMT. (IN $M) 223.1

# PROPERTIES 18

2 3

RK Centers

Private

87.7

Novaya Ventures

Private

82.4

UrbanMeritage

Private

82.4

WS Development

Private

66.9

Inland Real Estate Corp

Public

59.0

PE | ARC Shopping Center REIT

Private

52.7

EDENS

Private

46.3

Invesco RE

Institutional

38.5

CBRE

Institutional

35.6

Sidney Insoft

Private

35.4

Egeria Capital

Equity Fund

32.1

Inland Real Estate Group

Private

30.8

Realty Income Corp

Public

25.0

Dividend Cap Diversified Prop Fund

Private

24.7

Slate Retail REIT

Public

24.4

Bay Management Corp

Private

24.0

Federated Companies

Private

22.3

Rubicon Real Estate LLC

Private

21.5

Barrington Equities LLC

Private

19.0

Kite Realty Group

CC&F

Public

17.3

Institutional

16.4

American Realty Capital

Private

14.5

Northland

Private

13.1

Allen Properties (CT)

Private

12.8

purchase of a 69,000-sf Price Chopper in Worcester from H&R REIT for $16.0 million. Inside Route 128, CBRE/NE brokered the sale of 144,000 sf CVS and Marshalls-anchored Pleasant Shops Plaza in Weymouth to Columbus, SC-based Edens Inc. from Federal Realty Investment Trust for $34.2 million (approximately $263 per sf), further testament to the aggressive pricing in prime markets. Boston Realty Advisors registered a number of retail deals and mixed-use assets with retail in 2014, including the $13.2 million sale of Boston’s 171 Newbury St. ($1,553 per sf) in an all-cash transaction RIA K. MCNAMARA by Bernard H. and Suzanne Pucker to a Dutch concern. The asset housed the Pucker Gallery since the 1970s and Clark’s Shoe currently fills 2,638 sf on the ground floor of the location. It was a multi-pronged assignment for the BRA crew, with retail ace Michael d'Hemecourt joined by principals Christopher Sower and Jason Weissman of BRA handling the sale and also engaging their leasing team to find a new home for the art gallery, a feat accomplished when their clients inked a new deal close to their former home. BRA also orchestrated a 1031 tax deferred exchange for the Puckers by brokering the acquisition of replacement properties, including a CVS at 188 Linden St. in Wellesley for $11.3 million. That effort speaks to the concern of many sellers over tax implications in a trade and where to place their proceeds going forward. In another listing of a landmark property, BRA also handled the sale of a long-time Gulf continued on page 93

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INVESTORS SHOP RETAIL continued from page 92

Station at 1180 Boylston St. in Chestnut Hill that owner Cumberland Farms Inc. sold to Chestnut Hill Investments for $3.9 million. The buyer, Raj Dhanda, is an active CRE investor and well known in regional real estate circles as the owner of Neena’s Design Lighting. The KeyPoint Partners investment sales team represented Stop & Shop in the $7.0 million sale of West Plymouth Square in Plymouth. The 126,250-sf shopping center (anchored by Ocean State Job Lot and Planet Fitness) was sold to Scranton Holdings, Inc. The buyer was procured by Michael Scanio of Cambridge Capital Advisors. There were a number of familiar sellers in the market last year, including Atlantic Management Corp. of Framingham which harvested four long-held Quincy retail properties totaling 155,000 sf, beginning with three of them (one anchored by an IHOP) at 119-151, 153-205 and 223-241 Parkingway St., with those trading for $14.6 million to Parkingway Q Business Center LLC, an entity managed by Andrian Shapiro. In a separate deal soon after the first closed, Shapiro acquired the fourth property, Parkingway Plaza, a single-story center at 100-134 Parkingway St., which went for $4.4 million. Sean Kenealy of Key Realty, Inc. represented both the buyer and seller in the transaction, part of a bountiful year for the South Shore-based professional. Lowe’s Home Center also shed a couple of assets, one a property it built but never occupied at 25 Computer Dr. in Haverhill to Paradigm Properties for $5.75 million. A TD Bank branch at 614 Southbridge St., Auburn, went to LM-2 LLC, a private trust managed by James F. Langway of Hyannis. American Realty Capital Properties (ARCP) made another pair of Bay State acquisitions in addition to their purchase of Boston Commons: a Price Chopper in Gardner for $14.5 million from Nichols Square LLC (managed by Donald R. Irving) that Colliers International oversaw, and a Walgreens in Chicopee at 1193-1195 Granby Rd. for $7.7 million let go by GID Development. Quincy & Co. also made an additional purchase in addition to Sumner Street Marketplace in Norwood, scoring a Newburyport CVS at 13.5 Pond. St. purchased from New England Development for $10.9 million. Other deals of note last year included Inland Real Estate Group’s purchase of a pair of Walmart-anchored strip centers from Eyes North (managed by Trilogy Capital Advisors) in Lakeville ($7.0 million) and Clinton ($9.7 million); the sale of a Walgreens at 235 South Main St. in Middleton for $8.9 million by Colavito Middleton LLC (managed by Todd A. Ruderman) to Middleton Property LLC, managed by Anthony Herrey and Maurice H. Sullivan III; a Walgreens at 220 South Broadway in Lawrence exchanged between Lawrence Amadan LLC, managed by Robert S. Korff, with the asset trading for $5.8 million to Cushing & Hoitt LLC, managed by Mark C. Lu and Steven M. Panosian. Multi tenanted plazas drew interest from private parties throughout 2014, including the sale of Stage Coach Plaza, a strip center anchored by an Outback Steakhouse and Uno’s continued on page 94

THE SHOPPES AT PAGE POINTE, STOUGHTON MA

THE SALE OF STAGE COACH PLAZA, WESTBOROUGH, WAS BROKERED BY CHRISTINA KINDER OF COLDWELL BANKER COMMERCIAL NRT

PRICE CHOPPER, GARDNER MA

PLEASANT SHOPS PLAZA, WEYMOUTH MA

13.5 POND ST., NEWBURYPORT MA

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INVESTORS SHOP RETAIL continued from page 93

located at 225-229 Turnpike Rd. in Westborough, which sold for $5.75 million in deal brokered by Christina Kinder of Coldwell Banker Commercial NRT. The asset was purchased by Mobile Street Realty Trust from Northside Realty Trust; Pembroke Crossings, a 35,000 sf multi-tenanted retail plaza in Pembroke sold by Falconi Realty for $3.0 million to an entity managed by Anastasia Tsoumbanos Natalia Kapourelakos, the owners of Lakeview Pavilion in Foxborough; and Dennisport Commons, a 251,300 sf plaza at 714 Main St. and 260 Upper County Rd. in Dennis and tenanted by Ocean State Job Lot and a Dollar Tree, was sold by 450 Main Street 1719 LLC, managed by Barbara E. Briamonte and Susan L. Masone to Ocean State Job Lot affiliate. It went for $3.6 million. Other Bay State retail transactions topping the $3 million mark in 2014 included Good Fortune Realty of Quincy LLC, managed by Kuan He Wu, which purchased a 22,400-sf multi-tenanted retail plaza at 200-226 Quincy Ave in Braintree for $4.0 million from seller ML Management LLC, managed by Yu Mei Zheng. And Dupont Properties of Webster sold Marliave Restaurant at 10-14 Bosworth St. and 51 Province St. in Boston to an affiliate of NYbased Midwood Management Corp. and Merchant’s National Properties for $3.7 million. In Natick, TRB Associates of Lincoln and its principal, industry veteran Thomas R. Blakely, was joined by Ria K. McNamara in trading 677 Worcester St. (Route 9) for the first time in over a half century. The home of Boston Organ & Piano since 1957, the 9,500-sf retail asset located on 1.9 acres on the westbound side of the divided highway was purchased for $3.07 million by Blakely’s client, Margarita Rudyak, trustee of 677 Worcester Street Trust, from Totaro Nominee Trust and its principal, Elizabeth T. Moley. “TRB & Associates is extremely pleased to have procured and represented the buyer in this transaction,” Blakely told Real Reporter in a July article detailing his client’s purchase of the infill location. u

PRICE CHOPPER, WORCESTER MA

SALT POND SHOPPING CENTER, NARRAGANSETT RI

119-151 PARKINGWAY, QUINCY MA

BOSTON RETAIL STATS

RETAIL Qtr 13H1

Volume $301,161,261

YOY % Change

# of Props

Total Units 2,645,167

Avg $/Sqft $112

13H2

$660,921,150

3,119,041

$209

14H1 14H2

$854,934,904 $395,396,557

184% -40%

74 38

4,092,118 1,780,069

$203 $218

* Price per Unit/SqFt calculations are rolling quaterly averages

FAIRBANKS PLAZA, KEENE NH

SPEEDWAY PLAZA, WESTBOROUGH MA

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SELF-STORAGE SPACE continued from page 22

Many of those facilities are owned by small “mom-and-pop” operators not always inclined to sell properties after the first offer from a buyer, so not a lot of properties come on the market each year. When they do, a number of large REITs and medium-sized investors are ready to pounce on deals. In addition, a majority of the existing properties are old and obsolete, often requiring major post-sale upgrades and even teardowns. The bottom line: There is not only a shortage of self-storage facilities for STEVE MELLON sale in general, but there is an even more acute shortage of modern, Class A storage facilities for sale. “It’s a very competitive field,” says Ian Brandon, first VP for commercial real estate at Cambridge Savings Bank. That is why companies BRIAN SOMOZA such as Boston’s SSG Development LLC have successfully mined a lucrative niche of building and selling Class A self-storage facilities. Two years ago, SSG Development built a highly visible self-storage facility at 50 Middlesex Ave. in Somerville’s Assembly Square—and then turned around and sold it along with eight other self-storage properties (including ones in Brighton, Everett and Waltham) to large institutional investors. “It was all per our business plan,” Dave Fulton, CEO of SSG Development, says of its buildand-sell self-storage strategy. After selling nine properties totaling one-million square feet, SSG Development turned around last year and built a new 93,000-sf storage facility on Route 1 in Dedham and just recently broke ground on a new 118,000-sf facility on Burgin Parkway in Quincy.

“

Self-storage REITs‘ are very competitive and aggressive.

”

BRANDON KELLY RJ Kelly President and CEO

Auburn’s Casey Real Estate Investment LLC, operating under the name Casey Storage Solutions, has long been in the self-storage investment and operations field. Recently, Casey owner Morgan Hanlon teamed up with Phillip Bakalchuk to form PhilMor Real Estate Investments LLC – and it has been on a tear ever since. Last year, PhilMor bought two self-storage facilities in Connecticut, totaling 1,030 units, for an unspecified amount of money. Separately, it then bought land in Shrewsbury along Route 9 and in Hamden, CT, where it plans to build two new self-storage facilities on the separate parcels, totaling 1,200 storage units. The 63,000-sf Shrewsbury project at 757-789 Boston Turnpike Rd. (Route 9) that will operate under the Casey Storage Solutions brand and be managed by Casey Property Management LLC will be the firm’s fifth in central Massachusetts.

ROUTE 111 SELF-STORAGE, DANVILLE NH

KINGSTON SELF-STORAGE, KINGSTON NH

It will have both drive-up and indoor units, plus climate control, gated access and security monitoring. PhilMor acquired the 14.1-acre parcel for $1.35 million in mid-June with acquisition and construction financing of $5.0 million delivered by Enterprise Bank & Trust Co. “We felt there was underserved demand out there,” says Hanlon of PhilMor’s aggressive moves to build new capacity in New England. “The fundamentals are very strong and we feel good about 2015.” Like others, Hanlon says prices are rising for self-storage facilities, making it a “challenging market” for all investors. And building new storage properties has its own obstacles such as the high cost of land, commodities and labor in New England. Also last year, Burlington’s RJ Kelly Company bought a pair of facilities in New Hampshire for $6.4 million; the firm’s facilities operate under the Stor-U-Self brand. The New Hampshire facilities are at 220 Kingston Rd. in Danville, NH, and 14 Route 125 in Kingston, NH. Combined, the facilities have 875 storage units. Today, the company owns 10 facilities in Connecticut and Massachusetts and New Hampshire, totaling 5,000 units. Brandon Kelly, president and CEO, says good storage properties are “very hard to come by” these days. “The REITs are very competitive and aggressive,” says the firm’s second-generation leader—along with brother Scott Kelly and patriarch/Chairman Richard J. Kelly—whose family empire includes the massive self-storage facility along Route 95 South in Byfield.

Brandon Kelly says he expects to expand the portfolio in 2015, possibly even repositioning of older industrial properties into self-storage facilities. “I’m optimistic about the market, as long as there is not a lot of overbuilding,” he says. “Right now, I’m not seeing any overbuilding. u But you have to watch for it.”

INDUSTRIAL SPACE continued from page 89

Paradigm had paid $6.75 million in April 2007. In the end, industry officials are as bullish about 2015 as they were about 2014 – with caveats. “It’s looking very strong,” says Minnerly. “I’m convinced there will be more construction in 2015.”While others are also convinced there will be multiple plans to develop more space (both build-to-suit and speculative) in 2015, they note the same old roadblocks face developers: Lack of available and affordable land and, sometimes, intense local opposition in eastern Massachusetts. Even if an increasing number of developers find land and start to build, it won’t be enough to meet the demand for industrial properties in 2015, particularly warehouses. As a result, industry players are looking for a general repeat of 2014 in 2015. “It’s going to be extremely difficult to find space,” says Skeffington. “Generally speaking, the highest quality buildings will continue to perform very well in 2015. But the market is going to continu ue to get tighter and tighter.”

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C&W EXCLUSIVES continued from page 13

$21.6 million exchange of 30 Innerbelt Rd. in Somerville acquired by AEW Capital in an October purchase from C&W client Prologis. That global industrial REIT’s predecessor had developed the 195,000-sf property in 2004 after paying $9.5 million for the 17-acre site where it is situated. While many institutional funds are only now warming up to the product type, AEW has a lengthy track record owning industrial real estate, as evidenced with the Boston-based operation harvesting 14 Aegean Dr. in Methuen this past year for $21.0 million (see story, main industrial article, page 12) to New York Life Investment Management through Transwestern 18 INDEPENDENCE DR., DEVENS MA RBJ. AEW had held the 234,000-sf building since paying $18.3 million in early 2006. The Methuen facility, constructed in 2001 by Tambone Corp. on a speculative basis, is a rare example of modern industrial space in Massachusetts, but Pullen notes that an asset with 30 Innerbelt Rd.’s attributes is even harder to find, being even newer and “just a handful of toptier industrial properties located in Boston’s urban marketplace.” As such, “30 Innerbelt Rd. offered a unique opportunity to acquire a well-positioned asset” in the area, says Pullen, as evidenced when C&W’s marketing campaign attracted a wide swath of suitors who were ultimately beat out by AEW’s bid that equates to $110 per sf. 66 SARATOGA BLVD., DEVENS MA Besides proximity to New England’s most populated metropolitan market, C&W touted “superior Eleven percent of the building is fit out for office accessibility” of 30 Innerbelt Rd. to other regional uses, with the remainder industrial functions. C&W Associate Director Samantha Hallowell markets in the Northeast given the structure’s close proximity to most major highways as well as being and Executive Director J.R. McDonald were on a short drive from Logan International Airport. the Devens assignment. Thanks to being in a Situated on an eight-acre parcel—extremely hard 4,400-acre master planned community that was to assemble in one of the country’s most thickly set- formerly the Fort Devens US Army Base, the two tled communities—30 Innerbelt Rd. was designed buildings acquired by Goodman and Matteson to accommodate multiple tenants requiring flex, in December that were constructed in 1997 manufacturing and warehouse facilities, with clear encompass four times the size of 30 Innerbelt heights to 23 feet. Column spacing ranges from 35 Rd. Eighteen Independence Dr. is a 325,000-sf feet by 42 feet and 40 feet by 40 feet and there are building on 21.6 acres featuring clear heights to 22 loading dock doors and two drive-in doors. 30 feet, 10 loading docks and one drive-in door

while 66 Saratoga Blvd. has 411,000 sf and also has 30-foot ceilings, as well as 55 loading docks and one drive-in entrance. The partnership got a relative bargain there versus the pricing needed from their buyers to cement 420 E. St. and 30 Innerbelt Rd., with the purchase equating to $46 per sf compared to $232 per sf for the South Boston endeavor and another three-figure outcome in Somerville. It also comes with an opportunity to expand 66 Saratoga Blvd. up to 335,000 sf and add 25,000 sf to 18 Independence Dr., which would put the holdings in excess of 1.1 million sf. u

WASHINGTON TRUST continued from page 42

development firm founded by Robert H. Smith Jr., which purchased the property from J&J Holdings LLC of New Haven. Ettinger also registered a productive year in 2014, and deals included the $8.6 million refinancing of the Ridgebury Corporate Center, a four-story, 126,000-sf Class A office property in Danbury owned by Allegiance Realty Corp.; a $4.8 million construction loan to Newtown Medical Office I, LLC to build a 26,000-sf medical office for which ownership has pre-leased 9,400-sf to national dialysis treatment providers, DaVita, Inc.; and a refinancing of 914 Hartford Turnpike in Waterford for the Waterford Group, best known for development of the Mohegan Sun Casino. The hotelier owns the 30,300-sf multi-tenanted office building and is the principal tenant. Connecticut market mainstay Erno was busy as well, arranging the refinancing of Lakeview Center, a 70,000-sf shopping center in Branford consisting of four single-story buildings leased by 16 tenants; and $2.25 million in acquisition financing to Avon-based PVRD, LLC, a newly formed realty holding company, with those

LAKEVIEW CENTER, BRANFORD CT

funds used to acquire a 50,000-sf retail property currently occupied by PetSmart and Michaels Stores in Manchester. Washington Trust also provided $6 million in construction and permanent financing to an affiliate of the Foster Corp. for a new 32,000-sf manufacturing facility in Putnam, a deal engineered by Senior VP Joseph M. Confessore. The Nutmeg State momentum has continued into 2015 for the lender which is also active in Massachusetts. In the first quarter, Pickering and Washington Trust provided $21.2 million in refinancing to The Real Group II, LLC, for eight separate Class A and Class B industri-

al and flex office buildings located in Windsor. Combined, the portfolio totals 317,500 sf of space including both single and multi-tenant properties on a parcel easily accessible from Interstate 91 and Bradley International Airport in Windsor Locks. “There is good business to be had in Connecticut,” affirms Slom. “The economy is much better than Rhode Island, because that’s still lagging. It’s not as active as Boston, but for us it’s a nice arena to play in because we can be a meaningful player on a lot of deals, because size-wise there are a lot of deals that are right in our wheelhouse.” u

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HOTEL COMMONWEALTH, BOSTON MA

211 NEWBURY ST., BOSTON MA

UMNV PARTNERSHIP continued from page 18

and in July UMNV closed on 207 Newbury St. for $7.6 million from private owner Serge Safar (who later that month purchased 36-38 Fairfield St. for $12.0 million). The partnership closed out 2014 by acquiring a pair of properties constructed in 1899, one being 123 Newbury St. from Abbey Road Advisors for $12.6 million and 166 Newbury St. via Deborah Brown of August Realty Trust which had owned the property since 1985 when it traded for $9.0 million. UMNV partnered with Invesco Real Estate Advisors in December to acquire the retail condominium portion of the Hotel Commonwealth. Jammen stresses the purchase was “totally separate” from the Newbury Street program, but that UMNV will apply their vast retail expertise to maximize its potential. “With 500 Commonwealth Ave., we look at it as an opportunity where we see underutilized retail with two restaurants that are performing phenomenally well and a bunch of inline retail that I think has had issues, so that’s a repositioning, remerchandising scenario where we were able to still buy it at an attractive cap rate going in,” says Jammen, quipping, “I wish I could buy at that cap rate on Newbury Street.” Eastdil was able

to give Sage back roughly half what it original- lion of the $200 million retail fund since their ly paid for the asset and gets a top-notch man- first purchase. “I think we were happy with the money we agement team to run the retail component, observes one industry veteran tracking the were able to get out in 2014, and we were disexchange. “It works out great for everybody,” ciplined in what we bought,” conveyed Jammen, who added, “There were some bad says that source. The UMNV partnership immediately set back deals out there that happened and I think to working Newbury Street for the fund, open- there’s more on the plate for 2015 that we’re ing 2015 with its not going to be particlargest single acquisiipating in.” In the tion to date, that being meantime, UMNV is redeveloping 125 126 Newbury St., the Newbury St., 240A six-story mixed use Newbury St. and the property that encomupper floors of 126 passes 120, 122, 124 Newbury St. A highand 126 Newbury St. end barber has taken for $54.2 million from most of the retail New York-based Rudin space at 79 Newbury Management in a deal St., there are a couple negotiated by Sean of deals cooking for Gildea of Dartmouth MICHAEL T. JAMMEN space at 125 Newbury Co. The asset consists UMNV principal St., and there is some of office space on the upper levels and retail at the lowest part, and rollover coming up at 205 and 211 Newbury St. with principal office tenant Sanford Brown as well. Says Jammen: “We’ve bought a lot of College having departed in February, possibili- vacancy to the point where we’re probably done ties for the asset abound, according to Jammen. buying vacancy for a year or so, and now we’re Combined with existing holdings at 8, 125, and looking at properties that have lease rollover in 79 Newbury St., the UMNV vehicle has 10 2016 to 2017, because we’ll spend most of this assets on the street in tow, deploying $150 mil- year leasing up what we have.” u

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We were happy with the money we were able to get out in 2014, and we were disciplined in what we bought.

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200 NARRAGANSETT PARK DR., EAST PROVIDENCE RI

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Dating to 1984, 100 Westminster St. is a 390,000-sf office tower that sports a newly renovated lobby framed by granite floors, marble columns and wood paneling that Paolino described in a press release announcing the purchase as “a fresh, contemporary design” offering “an upscale yet comfortable ambiance” and has a location in the heart of

the city’s Financial District where conditions have improved recently following a difficult recession. It is home to some of the state’s leading employers including Aon, Bank of America, KPMG, Merrill Lynch and Nortek. In acquiring the 20-story structure that last sold for $62 million in 2006, Paolino touts the asset as the only one in its class in the downtown controlled by a Rhode Island resident. Paolino Properties is a fourth-generation company begun in 1900 that today owns more than

100 WESTMINSTER ST., PROVIDENCE RI

one million sf of commercial office space plus another one million sf of retail and a range of other holdings including parking facilities, residential units and even a marina. The firm’s headquarters is at 100 Westminster St. u

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an absolute auction in early 1993 at which the contingent won out followed by its sale barely four years later to DivcoWest and Yale Properties. The three were joined in their remarkable endeavor by Geometry Realty Inc. of New York City. After its era with San Francisco-based DivcoWest and its visionary founder, Stuart Shiff, Cross Point’s new owners have vowed to bring the complex into the new millennium by making changes to attract BRADFORD A. SPENCER startups and technology firms. “We envision a 21st century village where collaboration and creativity thrive in a large but accessible environment,” Maher conveyed in a press release announcing a capital improvements program JOHN LASHAR designed by Perkins + Will and instituted by Chapman Construction. The initiative “will offer the features and benefits of a single-tenant campus with the value of a multi-tenant building at the most competitive prices in the marketplace,” PAUL LEONE Maher outlined. The effort is providing “innovative meeting spaces,” a fitness center with yoga studio and unique open recreational space for such eclectic elements as a golf simulator, renovated cafeteria, full-service restaurant DANIELLE DEMARCO and on-site daycare. Through exclusive leasing agents JLL, Anchor Line has been chasing tenants from 3,000 sf to 350,000 sf, the upper end touted as the largest contiguous block available in suburban Boston today. Anchor Line’s plan gained momentum by year-end when Jabra agreed to move its North American headquarters into 32,000 sf, bringing 90 employees to 900 Chelmsford St. from Nashua, NH, its home for

WATERMILL CENTER, WALTHAM MA

495 BUSINESS CENTER, TEWKSBURY MA

nearly two decades. Matthew Daniels of JLL led the leasing effort on both sides of the transaction along with Christopher Lawrence and Brian Tisbert for the landlord. Jabra is a Danish company that makes headsets and speaker phones whose principals praised Anchor Line’s ideas for

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We envision a 21st century village where collaboration and creativity thrive in a large but accessible environment.

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ANDREW J. MAHER, Anchor Line Partners founder on Cross Point Towers

Cross Point as being in line with their corporate culture and desire to be in a multi-tenanted facility with entrepreneurial spirit. As evidenced in the Cross Point assignment, C&W’s Capital Markets operation was as prolific outside Boston and Cambridge in 2014 as they were within those two communities where capitalization rates remain anemic (see story, page three). Among C&W’s other major suburban trades of 2014 included $55.0 million from the sale of Watermill Center on behalf of New Boston

Fund to Intercontinental Real Estate Corp., with the latter firm separately reaping $52.7 million in its disposition of 117 Kendrick St. in Needham to Bulfinch Cos. There was also the $45.9 million sale of 9 Technology KAMBIZ SHAHBAZI Dr. in Westborough to W.P. Carey from Columbia Property Group, who landed a 250,825-sf office building for $1.7 million less than what it last changed hands for in May 2004, a reflection of the bygone period when pricing was running amok as evidenced in another reclamation project, that one instituted by Ferris Development in its purchase of One Research Dr., a sleek office building totaling 293,000 sf that was the longtime home of GenRad. Bought by a Midwest pension fund for $55 million in October 2005 and then saddled by debt and the downturn, the 30acre complex languished for nearly a decade until being acquired in Feb. 2014 at less than half what it traded for previously, a $21.5 million BRIAN R. CHAISSON consideration that principal David Ferris coined as “1980’s pricing,” with the structure dating to 1981 having sold for $26.5 million in Dec. 1986. The prominence of the building and low price per pound spent did get notice ANDREW J. MAHER for the deal first unveiled by Real Reporter, but the market was especially rocked when Genzyme Corp. opted to lease 114,000 sf there just a few months later, filling all but 50,000 sf of the remaining space after several other firms had also signed on through the efforts of in-house staff and Transwestern RBJ. Principal John Lashar advised Ferris on the purchase and worked with FD in-house specialist Jennifer Wren on leasing along with Transwestern RBJ colleagues Paul Leone and Danielle DeMarco. C&W’s 9 Technology Dr. sale to W.P. Carey was especially large for Interstate 495 in the wake of the 2008 downturn, and to C&W’s Pullen, it demonstrates how well-regarded certain parts of the region are at present. “There continued on page 99

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are some very strong suburban markets,” offers Pullen in detailing “plenty of action for every one of” the buildings pitched along Route 128 and beyond such as the Cross Point listing that came amidst a number of lease signings there and an Interstate 495 North submarket finally showing signs of life after a lengthy hangover. Other C&W office buildings listed and sold outside Route 128 last MATTHEW DANIELS year included One High St. in North Andover that traded for $15.0 million, Solomon Pond Park in Marlborough, a $34 million exchange. The contingent also did office deals in Providence, RI, that a $64 million sale of 100 CHRISTOPHER LAWRENCE Westminster St., plus 900 BRICKSTONE SQUARE, ANDOVER MA Elm St. in Manchester, the Queen City’s tallest building that went for $19.7 million. Advising on that deal were C&W of New Hampshire team members Denis Dancoes, Thomas Farrelly and Sue Ann BRIAN TISBERT Johnson. Back in the Bay State, Westborough seemed to get as much sales action in 2014 as the core Route 128 markets, remarkable given the struggles seen there during the crash. JLL, DTZ and Transwestern RBJ were among the firms completing major office building sales there besides C&W, perhaps the most transformative being the One Research Dr. deal last February, an iconic property now almost fully occupied following its purchase by FD, that company a leading story of 3 RIVERSIDE DR., ANDOVER MA the suburban scene last year after the group founded by financier David Ferris bought two Waltham assets and another in Littleton then worked to KERRY OLSON HAWKINS aggressively retrofit and lease them up using a vertically integrated approach with leasing assistance from Transwestern RBJ. While certain funds are exploring communities on 9 TEHCNOLOGY DR., WESTBOROUGH MA the fringe, the suburban office market along and ning bidder for 100 Cambridge St. in Boston in JASON LEVENDUSKY inside Route 128 is espe- a $270 million deal that did not finalize until cially popular right now, this spring, but while waiting for that closing, and C&W had a role in the Brighton-based group led by CEO Peter many of those listings in Palandjian engaged C&W to divest its 117 2014 as well .with W.P. Kendrick St. building after almost 10 years of Carey acquiring another ownership, then took over New Boston Fund’s net-leased office building, position at Watermill Center in a $55 million that one in Burlington acquisition also orchestrated through C&W. occupied long-term by NBF had paid $35.6 million in 2000 for 800 JAKE BORDEN Keurig Coffee Co.’s parent South St., a 206,000-sf building on seven landfirm. It is a 150,675-sf Class A building that scaped acres that was over 90 percent leased brought $39.4 million and is the first in a two- when purchased by Intercontinental. The Davis Cos. purchase of One Cabot Rd. in pronged exchange of that firm’s 485,000-sf Medford proved an intriguing deal in many headquarters. Intercontinental Corp. saved its biggest feat respects, including their subsequent sale of four of 2014 for year-end when it became the win- excess acres where 297 housing units are being

constructed, providing a LWP combination and yield broker JLL’s client an extra $19.2 million. That bonus was heaped atop the $53 million office building sale, making it a productive exercise for seller Ares Management and still a deal One Cabot Rd.’s new stewards were pretty stoked about, or so conveys Davis Cos. President Richard McCready who later told Real Reporter after the December closing that an extensive repositioning of the 357,000-sf asset was getting underway to further attract newage tenants. “It is a little tired and has a 1980s feel, but it is well built and has some very good tenants . . . and we have a lot of faith in our property management and leasing team that we can create value there,” he says, while continued on page 100

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Director of Acquisitions Quentin Reynolds maintains One Cabot Rd. is poised to draw from both suburban tenants wanting to get closer to Boston and Cambridge plus firms from the Kendall Square, Back Bay and Seaport submarkets migrating the other direction in search of rental relief. JLL Capital Markets chief Frank F. Petz thinks the land sale does Davis Cos. a favor by enhancing the LWP element of Wellington Circle. “There is a strong correlation you MICHAEL SMITH have never really seen MARLBOROUGH CORPORATE CENTER, MARLBOROUGH MA before where those two knocking on doors all the time looking for propproduct types are coming partnership position in the venture. “We are playing to the building’s strengths erties there.” KS Partners also owns another together,” Petz says. “It is what people are looking and are making it into the open, cool space building with ground-level retail in Downtown tenants are asking for but that many of them Crossing and he is salivating at the opening of for today.” Longtime Boston just can’t afford close to Boston,” says the Millennium Towers condominium high-rise a investor Kambiz Shahbazi Shahbazi, among a throng of investors insisting few doors away that promises to bring ultra-rich shoppers to the neighborhood. of KS Partners shares a SCOTT JAMIESON Even with all that urban ardor, however, KS similar plan as he plumbs has a larger footprint outside of the city and the outer suburban market increased its suburban flex and office square for additional opportunifootage in many directions through its latest ties after a bustling 2014 buying spree over the past two years, including in which his firm did buy deals in Connecticut. Route 128 Central and one North Station building Interstate 495 Central in the aforementioned in Boston but was primariWestborough neighborhood are among his ly focused on the suburban favorite targets. “Not everyone is moving into realm, making a hard run BRANDON DICKASON at Cross Point before snagBoston,” Shahbazi proclaims. “A lot of companies are being priced out and they are finding ging Brickstone Square in MICHAEL SMITH Andover for $59.5 million, Avison Young Capital Markets team leader some excellent alternatives in many parts of the suburbs.” in return getting a millTake Dedham Place at 3 Allied Dr. in turned-office building list- “the suburbs are not dead.” Far from it, proed by HFF in a hotly con- claims the New York based investor, even as an Dedham, or at least KS Partners did in paying tested competition for unabashed admirer of downtown Boston who $31.0 million to Normandy Real Estate Partners last autumn for the more than one million sf of is especially thrilled about the North Station 160,000-sf building that space. Coleman Benedict, purchase of 141 Portland St. from Synergy for DEREK OPERT acts as a companion to the Benjamin Sayles and $7.2 million, giving KS its second holding there buyer’s Dedham Executive along with 225 Friend St., that building Patrick McAneny were on that assignment. Center which KS has Seller Pearlmark Real Estate Partners, the acquired just as the area was literally emerging owned since early 2007. erstwhile Transwestern real estate firm, chose to from shadows cast for a half-century by the Already 98 percent leased concentrate on other investments following Central Artery viaduct and screeching, elevated after being at 85 percent almost 10 years of ownership, having paid Green Line, both now disappeared to reveal a $77.5 million in Nov. 2005. Shahbazi predicts a wide boulevard connecting the North and West COLLEEN V. CAREY occupancy prior to its sale, Dedham Place could see bright future for Brickstone Square especially as Ends. “It is already amazing, but in five to six future upside thanks to large technology firms who like brick-and-beam being near a commuter rail space run out of those options. Oaktree Capital years, you aren’t even going to be able to recstation and Legacy Place, Management is supporting that concept with a ognize the place,” says Shahbazi, adding, “I am the much ballyhooed lifestyle center credited by landlords in the neighborhood as a major amenity JENNA J. SKAAR for their properties, Shahbazi among that throng. “That is attractive to a lot of people,” he says in noting that tenants hailing from the Hub have already leased 19,000 sf since the exchange. “I like that stretch of highway a lot,” Shahbazi says of Route 128 South. The Dedham Place listing was held by HFF, the same Capital Markets operation that traded Brickstone Square for Pearlmark. KS Partners retained Colliers International as exclusive leasing agents for Dedham Place, that team encompassing James Elcock, David Goodhue, Caleb Hudak, P.J. Foster and Daniel Hynes. In terms of Brickstone, the most KS Partners has ever paid and largest single asset acquired on a square-footage basis, Shahbazi expresses 205 BURLINGTON RD., BEDFORD MA continued on page 101

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There is a price to pay to be in Boston, and that is forcing many (investors) out to the tertiary markets where they might not have wandered before.

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relief to Real Reporter at beating out a slew of premier competitors for the facility originally converted from factory space by mill maven Martin Spagat, a pioneering developer in that realm who got $77.5 million from Illinois-based Transwestern Corp. when Brickstone Square was bought prior to its name change to Pearlmark. Backed by a $54.7 million balance-sheet loan from JPMorgan Chase Bank, KS Partners has retained CBRE/NE as exclusive leasing agents at Brickstone Square on a team led by Kerry Olson DEDHAM PLACE, DEDHAM MA Hawkins, Jason Levendusky and Jake Borden. “They know the market very well,” says JAMES ELCOCK Shahbazi, who hired Visnick & Caulfield to redesign Brickstone Square. “I’m sure Kambiz will get in there and have it up into the mid 90’s (occupancy percentage) pretty shortly,” NAI/Hunneman DAVID GOODHUE Commercial Co. principal David N. Ross says when asked of the landmark property’s future. HFF was sole broker on that transaction but Ross is familiar with the three-building KEURIG COFFEE HEADQUARTERS, BURLINGTON MA complex on 53 acres and its new owner, having Under the NAI/Hunneman flag, they joined Key league Scott Jamieson plus Brandon Dickason CALEB HUDAK joined colleague Gina Realty advising KS on its $4.6 million sale of and Derek Opert and he predicts a multitude of Barroso advising KS 140 and 150 Wood Rd. in Braintree last sum- contenders for the North Andover asset that has Partners in 2014 on the mer to investor Brian R. O’Connor. The buyer enjoyed several recent leasing commitments. sale of another Andover secured 100 percent financing from Rockland Smith says the tenant migration is helping bolbuilding, that the 90,000- Trust Co. for the 91,925-sf package located on ster the flexibility among investors to look sf asset at 3 Riverside Dr. 2.2 acres that Shahbazi had acquired in a $52 beyond the urban core. “There is a price to pay bought by Jumbo Capital million portfolio purchase in 2007. to be in Boston, and that is forcing at a price of $4.05 million NAI/Hunneman principal Catherine many people out to the tertiary marand later financed by $5.8 Minnerly and Ovar Osvold representkets where they might not have wanP.J. FOSTER million from Brookline ed KS in two other Braintree assets dered before,” he says. “And I don’t Bank. “Location combined with recent leasing harvested from that portfolio bought see any deceleration of that going foractivity made this a perfect value-add opportu- from legendary developer Thomas J. ward. The interest is only getting nity for the buyer,” Ross said after that late Flatley’s estate. Haemonetics paid broader and deeper as we go along.” summer conclusion. The two-story building $4.3 million for 355 Wood Rd., a In keeping with a theme over the that dates to 1985 was renovated in 2012 and 47,000-sf office building occupied by RICHARD RUGGIERO past three years, Burlington office works well for multi-tenanted use thanks to that firm, then NAI/Hunneman properties were a hot item in 2014, flexible floor plates and three distinct brought in $2.1 million for 11 Brooks and as normal, the Gutierrez Co. had a entrances, Ross relayed of that first-class asset Dr. The latter was a user purchase in starring role, this time in selling propin praising KS for its stewardship of the prop- which Ardente Supply of Rhode Island erties in the South Avenue and Wall erty through the market slump. is moving its Boston-area operations Street area. In what could ultimately KS Partners did increase its total portfolio into the 30,000-sf flex office building. equate to a $150 million investment, above four million sf in 2014, and Shahbazi Christina Ardente of Residential American Realty Capital paid $39.1 continues to pursue new opportunities—‘We Properties Inc. advised the buyer. million for 63 South Ave., better are not slowing down on acquisitions at all,” known as headquarters of Green KS Partners also last year hired TORIN TAYLOR he vows— armed by the likes of frequent part- Avison Young’s Capital Markets team to pitch Mountain Coffee Co. The affiliate of Cole REIT ner Oaktree and Connecticut hedge fund Jefferson Office Park in North Andover, a got a 150,000-sf piece of the facility that totals Contrarian Capital and its humongous war 94,325-sf property split evenly between 790 425,000 sf, with the remainder anticipated to chest. As evidenced with 3 Riverside Dr., how- and 800 Turnpike St., i.e. Route 114 near the close in the future. C&W was broker on that listever, the firm is pruning select assets to reflect critical juncture of Route 125. Occupancy is at ing, and has been dating back to when the Kchanging strategies or take advantage of the 74 percent among 22 tenants for the asset AY cup inventor opted to consolidate at 43-63 robust climate. It was a bit of both in the sale is promoting for its close proximity to I-495 plus South Ave. last year of two Braintree buildings through the an efficient layout dividable to 500 sf and up to A few doors down, in another C&W transacbrokerage crew led by Scott Dragos, Douglas 5,000 sf of existing space and having nearly tion, Piedmont Properties of Georgia paid $62.4 Jacoby and Michael McLaughlin who moved half of the space leased through 2018, offering million to Gutierrez for 5 Wall St., that a over mid-stream from NAI/Hunneman to cash flow while rents rebound. 172,750-sf office building constructed in 2008. Colliers International and now also work alongAY Capital Markets team leader Michael The sellers had owned the 15.6-acre site since side Anthony Hayes and Timothy Mulhall. Smith is overseeing that campaign with colcontinued on page 102

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Nov. 1986. On the flip side, Finard Properties sold a 4.6-acre land parcel at 4 Burlington Woods in Burlington to Gutierrez for $3.5 million. The DTZ Capital Markets contingent had another bountiful season in 2014, ringing the bell 16 times to amass $290 million in volume, and that pace carried over into the New Year including some 2014 commitments delayed for various reasons and also measured in winning spinoff business from landmark deals that did conclude such as the marquee Riverworks Office Park sale 100 CROSBY DR., BEDFORD MA in Watertown to Spear Street Capital last autumn Properties, a diverse Maine-based company PETER BEKARIAN in a $43 million outcome, active in commercial real estate throughout then separately advising New England. LMP, which did another turnaround at that San Francisco firm in its $25.5 million trade of Woodland Park in Andover that also sold in the Marlborough 2014 (see story this section) took a similar Corporate Center to a ten- approach by making 100 and 200 Ames Pond ant of the 157,000-sf Dr. attractive to best-in-class tenants, and LMP building at 377 Simarano principal Don Birch says “the attributes of Ames Dr. A principal of IPG TYLER SPRING Photonics beat out multiple suitors for the 17-year-old MCC structure whose features include a flexible layout and quick access to Interstate 495. In Chelmsford, DTZ oversaw a $39.4 million deal where Tritower Financial Group purchased 300 Apollo Dr. with $31.7 million from United States Life Insurance Co. of New York, a purchase made as part of that firm’s core-minded investment strategy. USAA had held the building since paying $31.6 million in Oct. 1987 and DAVID J. PERGOLA successfully repositioned the asset in the ruins DTZ Capital Markets leader of the 2008 recession that devastated I-495’s office market. “They took great care of that Pond Corporate Center are evident in its fully building,” DTZ Executive Managing Director leased state,” explaining that, “we invested in David J. Pergola recounts in praising the client changes that would provide lasting value to the there while offering similar accolades to Leggat property, and it paid off in the long run.” East Boston Savings Bank appeared to McCall Properties in Tewksbury at Ames Pond Corporate Center, a 154,000-sf first class office agree by providing Tritower a $10.8 million park that Tritower bought for $15.0 million mortgage for the asset while its new owners through the same DTZ team. “That got a ton of were effusive praising the complex that includinterest,” says Pergola of an asset LMP and ed sustainability elements earning Energy Star Dead River Properties bought for $9.95 million Certification plus improved landscaping, an in March 2009. “It’s a really nice park in a beau- onsite fitness center and shower facilities. “The tiful setting with excellent highway access,” property is in an excellent location, and we feel says Pergola, who oversees the DTZ Capital confident that our tenants will continue to grow Markets effort in New England along with and see success,” said TFG Director of Senior Managing Director Brian R. Doherty. Acquisitions Tod Brainard. On the 300 Apollo Dr. LMP’s partner at Ames Pond was Dead River investment, Brainard pointed to its LEED Silver

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We are very pleased with how 2014 turned out and we have a good pipeline of properties we are working on now.

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805 MIDDLESEX TURNPIKE, BILLERICA MA

status and being 100 percent leased to eight solid tenants as among reasons for confidence in the property. “It is in pristine physical condition and is in an area with a strong history of solid economic growth,” Brainard said after that conclusion. DTZ had been active from the beginning of 2014 right through the end, as detailed elsewhere in this publication regarding the group that includes Colleen V. Carey and Jenna J. Skaar working far and wide in 2014. These days they can be found peddling assets in Hartford CT after a campaign that saw two large sales finalized up in Portland, ME (see story this publication) and the 141 Portland St. trade between KS Partners and Synergy to complement DTZ’s specialty of moving suburban office product. “We are very pleased with how 2014 turned out and we have a good pipeline of properties we are working on now,” Pergola tells Real Reporter in reflecting on the results in the team’s first full season. “It was a lot of fun and we worked for some dynamite clients.” Farley White Interests would be on that roster, hiring DTZ to sell the 200,000-sf Riverworks at 5 Bridge St. and 480 Pleasant St. in a rapidly evolving area on the Newton and Watertown borders. Spending $15 million to overhaul the historic mill buildings following their 2011 purchase at $4.4 million, FWI pushed occupancy to 93 percent among 18 tenants whose remaining lease terms average close to five years. Farley White was on the buy side in another DTZ listing, that being 1001 Pawtucket Blvd. in Lowell, another former Wang complex totaling 836,000 sf on three levels acquired from Winstanley for $15.5 million. FWI, whose principals are Sam Altreuter and John Power, has had a lengthy track record of Lowell ownership, with other holdings there including the Wannalancitt Mills. Another of those DTZ customers cited earlier would be the Davis Cos., the Boston-based firm active across the US which used the Pergola/Doherty group to complete its own successful reclamation program at Middleton’s Ferncroft Corporate Center, a casualty of the 2008 office market bust that resulted in the eight-story asset being given back to the lender before being picked up by Davis Cos. for $15.3 million in May 2011, a basis 43 percent below the $27 million FCC went for in July 2006. Davis Cos. used its own proven repositioning skills to remake 35 Village Rd. into a stabilized property thanks to various capital improvements and a leasing program headed up by Torin Taylor and Richard Ruggiero of C&W. continued on page 103

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By the time DTZ brought Ferncroft to the sales block, Davis Cos. had nearly 190,000 sf of its 230,000 sf committed in new leases and renewals, pushing occupancy well into the 80 percentile sphere. Appleseeds, Morgan Stanley and SAS Institute are among the tenants who call it home today. “We acquired Ferncroft Corporate Center during a period of economic uncertainty, and we invested considerable resources to undertake capital improvements and compete for tenants,” Davis Cos.CEO and namesake Jonathan Davis said after the transfer, adding that “this combination allowed us to create meaningful value, and I am very proud of 355 WOOD RD., BRAINTREE MA our team and applaud their execution on this property.” Ferncroft is the first foray into metropolitan Boston by Sovereign Partners for what founding partner Cyrus Sakhai calls “a strategic market” to the Gotham-based entity. “We are excited about getting a foothold here and we plan on expanding our holdings in this part of the country,” Sakhai said in a release. Davis Cos. is now trying DON BIRCH to invoke the same energy to One Cabot Rd. The $53 million purchase in late December through JLL gives the firm 308,950 sf 100 QUANNAPOWITT PKWY., WAKEFIELD MA that was 90 percent leased to such companies as Commercial Investments and Baupost Group in Savings Bank. JLL is now exclusive agent for the Agero, Expedient, Partners a deal where Genesis Management Group was Healthcare and First joined by Rubenstein Partners in buying the AstraZeneca headquarters in Westborough and TOD BRAINARD Marblehead Corp. Davis 722,525-sf complex on 85 acres along has multiple other suburban listings in the Cos. wasted little time get- Interstate 495. That submarket did crater in the pipeline, including 6 Kimball Ln. in Lynnfield on ting on the case, sending in 2008 recession, but Rubenstein acquisitions the northern tier of Route 128. That is just up property management director Deke Schultze told Real Reporter earli- the road from 100 Quannapowitt Pkwy., expert Larry Lenrow to for- er this year that his firm has “high hopes” for 168,000-sf office building JLL was engaged last mulate a plan further the complex moving forward, pointing to a year to sell on behalf of Digital Realty Trust advanced when corporate dearth of large blocks of space plus the ability which RJ Kelly Co. of Burlington successfully beat out other bidders to buy for office specialist Margulies to draw from both Massachusetts and $31.0 million. “The north market conPeruzzi Architects was New Hampshire companies and $16 RICHARD GRIFFIN tinues to improve,” JLL’s Hughes told hired to design the trans- million of common area and tenant Real Reporter when 6 Kimball Ln. hit formation and JLL was named exclusive leasing improvement work already spent on the street just as the Wakefield deal agents after helping the prior ownership land the one-time Wang facility. Petz was joined marketing the was being finalized a few exits south several of the existing tenants. Peter Bekarian of the Lynnfield property that has and Tyler Spring are leading that effort. “We suburban deals by Managing Director 107,700 sf of first class office space. believe One Cabot has genuine appeal to a Jessica Hughes and Vice Presidents Hughes says skyrocketing rents in wide array of tenants being priced out of Robert Borden and Matthew Sherry. DAVID FERRIS Burlington and Woburn have made Cambridge, the Financial District and the The group leader concurs that fringe the stretch north of Interstate 93 Seaport, as well as from those tenants wanting markets are increasingly getting increasingly popular, especially as new to move into the city from the suburbs,” attention after being difficult sells to retail and lifestyle amenities find their Reynolds offered in citing the Wellington Circle begin the decade. “People are lookway into that area. Tenants migrating area and surrounding developments including ing for yield and that is hard to get in from the north are also expected to be Assembly Row, Rivers Edge and Station Landing Boston,” he says. “And things are attracted by avoiding the gridlock that for “making it an engaging, convenient and much better than they were out to ensues regularly south of the I-93 highly desirable location for people to live, work 495.” JLL’s Westborough entry in the 2014 sales bonanza was the JENNIFER WREN interchange. and play.” RJ Kelly was not quite as active as it has JLL’s current Capital Markets team first Westboro Executive Park scooped up by Albany established itself as a downtown Boston spe- Road Real Estate Partners for $20.8 million been on the acquisition side in 2014, but did cialist when Petz arrived three years ago this with the JLL contingent advising Cornerstone join a parade of investors flocking to Bedford, summer, and while the firm did complete multi- Real Estate Advisors on the three-building, Chelmsford and Billerica much the same as capple trades of note in the Hub again in 2014 (see 216,000-sf asset at 110, 112 and 114 Turnpike ital did for Burlington before it was picked over story, page three), the group also aided owners Rd. that changed hands in late December. The to leave few prospects remaining. Vertically outside Boston and Cambridge in finding takers asset was foreclosed on following the recession integrated RJ Kelly whose roots are in construcfor assets that included 225 Second Ave. in but revitalized under Cornerstone to the tune of tion bought a 122,350-sf flex/office building on Waltham bought by Alexandria Real Estate an 80 percent occupancy at the time of its 8.7 acres at 805 Middlesex Turnpike in Billerica Partners from JLL client Marcus Partners, plus December exchange. Albany Road, whose pres- from Deutsche Asset & Wealth Management for the 495 Business Center in Tewksbury that ident is Christopher J. Knisley, financed that $5.0 million. Less than one mile from the yielded $13 million for clients Capital deal with $19.2 million from East Boston continued on page 107

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a $10.0 million line of cred- our original strategy,” he says. “We don’t want to it enabling purchase of the bite off more than we can chew.” East Boston assets. “We did The company, for example, aims to get the pay a bit of a premium, but Allston apartments ready for September 2016 that has worked out well for renters and is working to reposition the us,” David Grossman says. Connecticut properties, with the Southport “They are very user friendly asset at 43 percent vacancy upon acquisition. and understand real estate Grossman Cos. has already stabilized its regionand our approach, and we al industrial portfolio. Thanks to in-house leasare very pleased with how it ing director Richard McKinnon, its East Boston has worked out . . . they are air freight portfolio is full while Grossman and great to do business with.” partner Calare Properties also found a tenant at Among the assets tapping 210 Grove St. in Franklin, a 165,000-sf wareinto the $10 million was house bought last spring at a price of $4.25 mil746 Bennington St., bought lion through Binswanger Executive VP Timothy in November for $600,000; O’Callaghan. 218-220 Havre St., acquired The Franklin facility has many features, for $700,000 a month later according to O’Callaghan, including ceiling along with 110 Paris St. heights to 27 feet, being completely sprinklered done that same day for a and with 8,000 sf of office space. Its seller and similar price plus $735,000 O’Callaghan’s client was the Marilyn Danesh 1400 BALD HILL RD., WARWICK RI for 215 Saratoga St two Family Trust which bought the asset for $2.8 mildays prior. The Bennington lion in Dec. 2011. Elsewhere, Grossman Cos. did St. building is a 3,875-sf three-family and 218- a 41,000 sf lease at 60 Maple St. in Mansfield, continued from page 20 220 Havre St. classified as a four- to six-unit asset bringing the 225,000-sf building acquired in chase of 45 residential properties in East totaling 4,275 sf. The 110 Paris St. is a three-fam- 2013 to full occupancy. “Our bulk industrial portBoston’s Eagle Hill, Jeffries Point and Orient ily with 3,500 sf and 215 Saratoga St. is classified folio is very strong,” Jacob Grossman says. u Heights neighborhoods as Grossman Cos. joined as a 3,400-sf three-family. In March, Shem Creek modified the loan forces with real estate whiz kid Alexander J. Hodara, a late-20’s Boston University alum with amount to $13.5 million and the instrument has a penchant for acquiring Boston residential since been used to buy a pair of three-family often just two or three units each and systemat- homes, 451 Meridian St. for $600,000 and this ically enhancing their value and renting them month 324-326 Saratoga St., the former a out, reaping income in one of the country’s 4,100-sf three-family and the latter 4,700 sf and also a three-family that fetched $700,000. tightest multifamily markets. The managers of Shem Creek Capital Grossman Cos. caught wind of are Robert Parsons and Scott Hodara just as he was about to enter Goldberg, while Bernkopf Goodman East Boston with a hunch the commuLLP has provided legal services for the nity across Boston Harbor from the rest East Boston funding program with 400 RIVERSIDE INDUSTRIAL PARKWAY, PORTLAND ME of the city was about to realize its David J. Doyle on registry documents. potential as a residential Mecca among As in their other endeavors, with millennials. The Grossman Cos. leaderWashington Trust Co. funding the continued from page 32 ship of Co-Presidents David Grossman Westport CT, purchase, the Grossman O’Brien Realty advising the buyer. Founder of and Jacob M. Grossman plus Chairman ROBERT LEWIS OF Louis J. Grossman then proposed a VIDAL/WETTENSTEIN Cos. engaged plenty of lenders in their the Dunham Group, Thomas Dunham character2014 East Boston quests, among them izes 400 Riverside Industrial Pkwy. as “a perfect partnership with Hodara using their Blue Hills Bank putting up $475,000 fit” for the structure’s new owner. resources to super-size his program, Unitil indicates it was in July for a two-family at 1117 ultimately leading to the acquisition of in need of a new DOC as it Saratoga St. bought for $460,000 and 45 140 units last year—barely three expanded. Dunham a month later $836,000 loaned on apartments per household. “The prodescribed its previous loca121 Cottage St., a 4,175-sf three-famgram is 100 percent with Alex; he is our tion at 1075 Forest Ave as ily purchased for $800,000. Blue Hills guy on the ground over there every day, “woefully inadequate” to then loaned $709,650 in September and that has worked out tremendousthe needs of the growing ly,” David Grossman reports. “We love TIMOTHY O’CALLAGHAN when a 4,150-sf three-family at 166 company. The Riverside Leyden Ave. was snagged for $647,000. the basis we are in at over there.” Another $350,000 came from Cambridge GREGORY W. BOULOS property allows increased Hodara and Grossman Cos. did seemingly make a correct assumption, as evidenced in the Savings Bank in February to purchase a 1,925- space for storage and parking with ample paved arrival of national players to the East Boston mul- sf two-family at 238 Everett St. for $325,000 areas. In addition, its immediate centralized tifamily scene, especially at Jeffries Point which and $539,000 to acquire 114 Everett St., a location allows for “increased access to the offers stunning vistas of the downtown skyline three-family totaling 2,975 sf bought at a con- Interstate, Maine Turnpike, and arteries around yet had remained an ill-regarded part of town sideration of $490,000. CSB fueled the pur- Portland” as well as providing “visibility for filled with blighted properties and landscaping chase of 26 Monmouth St. last June, delivering marketing purposes.” Unitil bought the property in late summer, until a shift over the past 24 months. Things have $520,000 of the $600,000 purchase price. That gotten so heated that Grossman Cos. and Hodara three-family asset has 3,175 sf. A loan of on Sept. 12th, and subsequently sold its “are proceeding with caution there now” on the $472,000 came from the same lender in August 13,625-sf Forest Avenue location a week later when the Grossman/Hodara juggernaut paid on September 19th to Delta Realty, with Porta acquisition front, David Grossman relays. “The opportunities to buy are getting much $540,000 for 265 Princeton St., that a three- and Gregory W. Boulos negotiating that exchange. The new facility is currently undergoharder there today, but they are easier to rent, family encompassing 3,150 sf. Looking forward, Jacob Grossman waved a ing renovations and the company plans to occuand that is fine with us,” he says. “We are pleased we were able to get ahead of the rush. caution flag in light of rising expectations among py it later this year this year. Until that occurs, We love the cash flow and the rents and the sellers and from having “a lot on our plate” as to Unitil continues to operate out of its current managing the portfolio that continues to expand. DOC location under a short-term lease from its value-add opportunities going forward.” Dunham states the Industrial The Grossman Cos. also gave a shout out to “We are getting more conservative in what we new owner. the many lenders who have supported its 18- are pursuing and spending more time executing Parkway location promises to meet Unitil’s month investment jag, among them Shem Creek the business plan on the things we have recently “immediate and long-term needs” going foru Capital, a Boston-based operation that delivered bought to make sure they are going according to ward.

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their business plan.” Kelly also noted a trend of an increased flight to floating rate deals, instruments which he said were gaining steam in 2012-2013 and increased momentum in 2014. “We’re seeing investors wanting to take advantage of the low floating rate debt and they feel pretty protected that the indexes on those are going to remain in their favor for the foreseeable future,” he said. Arbor Commercial Mortgage secured over $100 million in financing for their New England customers, much of it generated through refinancings, but the firm also saw an uptick in acquisition financing in 2014. “I have thankfully seen a continuation of 2012-2013—a lot of LYNN COMMON APARTMENTS, LYNN MA portfolio refis with borrowers that we’ve known for years, with either loans coming up for matu- year, with over $7 billion nationally in multifamily rity or close enough to maturity and they were financings spread throughout a myriad of capital eager to jump into a lower rate,” says Arbor Vice sources. Freddie Mac was the largest provider of President John Edwards. “I have concentrated funds with $2.19 billion, followed by life compamy efforts on the small loan market in New nies ($1.83 billion), commercial banks ($1.04 England, and I think it’s an attractive space to billion) and Fannie Mae ($850 million). Michael J. be in because we have two very powerful loan Chase, VP and associate producer at NorthMarq, programs, (the Fannie Mae DUS program and says 2014 was a mix of acquisitions and refinancthe Freddie Mac small balance loan program).” ings for the Boston office, which supplied $103.7 Arbor provided a number of Fannie Mae million in mortgages. “We had more bank financDUS loans, including $11.9 million towards the ings than we’ve had in a while, and we didn’t do acquisition financing for the Skyline Apartments any CMBS originations out of our office. But we in Braintree, a three-property complex consist- still did life companies and commercial banks,” ing of 240 units that an affiliate of NY-based outlines Chase. “Commercial banks are just very Zeiger Holdings purchased for $14.4 million. aggressive right now in our marketplace and Arbor also provided a 12-year DUS loan of $8.0 when you find those good pockets of capital they million to refinance the 42-unit Fairhaven can be as competitive as anybody. They offer comGardens in Concord, and a 10-year, $5.3 million petitive terms and also some pretty competitive DUS refinancing loan for the Royale Apartments closing processes for borrowers, especially if borrowers are willing to do a little bit of recourse.” in Cranston, RI, a 75-unit property. In the Greater Boston market, NorthMarq NorthMarq Capital also posted another strong

provided Omni Properties a $20.5 million construction/permanent financing loan through a regional bank for the 200-unit Village Green in Littleton, MA, a chapter 40B mixed income development comprised of an 144-unit apartment community as well as a 56-unit detached condominium development; recapitalized Parkside Commons, a 228-unit, LEED Silver-certified apartment in Chelsea, providing $34.4 million in financing via a life insurance company for owner Parkside Commons Apartments LP, a joint venture between John M. Corcoran & Co., a foreign institutional investor, and the new partner, a domestic institutional investor; and Managing Director James M. Murphy and Vice President Doug Nickerson arranged the $17.5 million sale and acquisition financing of $14.1 million from Freddie Mac for the Windsor Terrace Apartments, a 134-unit property in Hooksett, NH. u

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and Worcester, as well as a pair of groceryanchored (King’s) centers in New Jersey and a Walmart-anchored center in Danbury CT. Twelve of the properties are inside Route 128, and with 75 percent of the leases scheduled to roll over within 10 years, there was substantial growth and income potential with the portfolio, Koury explains. ANDREW C. SUCOFF “The most compelling point (for investors) was that it’s very difficult to buy retail inside Route 128. So some of the entities that were the most aggressive initially questioned their level of interest, but the closer they looked at the portfolio the FREDDIE AKROUCHE more they liked what they saw. They saw the ability to buy retail, while not exactly hitting their profile, with an opportunity to buy in an area that is otherwise very difficult to acquire in, and they saw a lot of hidden value that their expertise ANDREW HURLEY could generate.” Boston’s legal community was also active in the landmark exchange, with Goodwin Procter LP

TRADER JOE’S, CAMBRIDGE MA

serving as counsel for Kimco and Morgan Lewis England and existing assets (see lead retail story, advising the seller through partners page 14), but Sucoff notes the acquisiJames L. Black Jr. and Lawrence I. tion enhances those holdings dramatiSilverstein. Partner Andrew C. Sucoff of cally. While the Bollard Group result was Goodwin Procter took the lead for a rare feat in the retail arena, Koury Kimco with assistance from Associates did handle at least one other nine-figFreddie Akrouche and Andrew Hurley. ure transaction in 2014, that being The buyer also assumed $120.5 million the $101.5 million disposition of a in mortgage debt on the portfolio that boosted Kimco’s standing as the JAMES L. BLACK JR. 715,825-sf grocery anchored center in Altoona, PA. Koury worked with HFF nation’s largest publicly traded operaManaging Director Claudia Steeb in tor and owner of community shopping harvesting Logan Town Center for AVR centers. “It’s exciting to see Kimco Realty. “It’s the dominant shopping coming into the market in such a big center within a 45-mile radius,” way,” Sucoff tells Real Reporter of a reports Koury, further citing the asset’s deal that also helped contribute to GP’s accessibility from Interstate 99 and a ranking as the leading real estate pracmix of long-term leases and credit tice of 2014 in transactions nationally, according to a professional legal publi- LAWRENCE I. SILVERSTEIN tenants who fill more than 98 percent cation. Kimco does have a history in New of the space. u

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NAI/Hunneman also helped loan servicer CIII Asset Management sell a flex/industrial portfolio covering seven buildings in Braintree and Rockland. The Rockland piece at 1022 Hingham St. fetched $4.56 million from Matthew McGovern and AMR Real Estate Holdings – Rockland LLC who in return got a 125,550-sf property on 8.3 acres along Route 228 close to Route 3. Occupant Haemonetics paid $4.3 million for 355 Wood Rd. in DAVID GILKIE Braintree, a 47,000-sf 21 SANBORN ST., READING MA asset, and NAI/Hunneman secured Campanelli and TriGate Capital for 300 Friberg Pkwy. in Westborough, a 78,450-sf office building in the Westborough Business GREG LARSEN Park undergoing a renovation by the new owners. Another NAI/Hunneman exclusive involved 10 Lowell Ave. in Winchester that Senior VP David Gilkie and Associate Jason Rexinis took on for Park View Electronics LLC. The buyer 102-106 CAMBRIDGE ST., BOSTON MA JASON REXINIS was Edesign, a local manu- There, the seller leased back 17,000 sf and Gilkie facturing company whose ownership was self- was named exclusive leasing agent by D&D, represented on the property acquired for use by which will self-manage the facility that the brothat firm. “The building offers a great I-93 loca- ker promotes for having “efficient and flexible tion as well as a unique blend of office, ware- space for a variety of users,” plus loading capahouse and manufacturing space that will allow bilities on the first floor and ample parking on a Edesign to meet current needs along with future 6.3-acre site just minutes from Route 128/I-95 expansion,” Gilkie detailed upon the closing in and I-495. The remaining space available has an early 2014 that was financed with $1.20 million elevator, “lots of natural light and picturesque from Institution for Savings in Newburyport and views of the neighboring woodlands which will Its Vicinity. The building had previously been be appealing to users in the market,” Gilkie occupied by Comcast and “was in very good reports. The client there has an expanding portshape,” explained Gilkie, with a few interior mod- folio focused on Billerica and Burlington targetifications the only work required such that the ing flex, office and retail properties with “strong firm was able to relocate “with little disruption to tenant retention,” he adds. One Dunham Road existing operations.” The 18,500-sf structure has LLC is managed by Thomas P. Cote. Tito and Barroso followed up their 44 School clear heights to 14 feet with drive-in and tailSt. transaction joined by Senior VP Greg Larsen board loading. The hot industrial market led Gilkie to 1 advising seller Almark Realty on disposition of Dunham Rd. in Billerica on behalf of buyer D&D 146 Mount Auburn St. in bustling Harvard Square Management while Oddo Inc. principal Sam Cambridge to Theodore Galante, counseled by Oddo represented Martin White Glove when it Tom Johnson of Hammond Real Estate. “The changed hands for $2.35 million in September. property’s unique mix of retail and office space set in a prime location within Harvard Square made it very attractive to the investment community,” Tito said later of the 4,150-sf asset. The NAI/Hunneman team is quite familiar with the area, having the previous year brokered the $800,000 sale of abutting 144 Mount Auburn St. Tito and Barroso were back in Boston a month later for the closing of 106-110 119 WEST WYOMING AVE., MELROSE MA Cambridge St. at

39 BAY STATE RD., BOSTON MA

Bowdoin Street on Beacon Hill where an entity affiliated with Hamilton Co. founder Harold Brown paid $2.2 million to secure the singlelevel retail building that totals 3,050 sf and houses a Dunkin’ Donuts unit in addition to two restaurants. “Location was the key driver in this deal bringing interest from numerous investors,” Tito recounted while adding that the scarcity of such an asset and the amount of foot traffic streaming past led to a swift due diligence period between seller MJ Development LLC and Hamilton Cambridge Associates LLC, whose principals include Guilliaem Aertsen IV. As to Christie, McGee and Lieber, “2014 was a decent year for us,” Christie says, one that picked up as the year went on when the trio received a slew of substantial listings such as 119 West Wyoming Ave. in Melrose and a continued on page 107

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portfolio in Lynn. Completed transactions included the $1.8 million sale of 16 units at 21 Sandborn St. Dozens of tours were conducted there at the asset which was sold on behalf of Eric and Nancy Unsworth of Sanborn Street Properties to Geo’s Girls LLC, an entity founded by George McHugh. The 85-year-old building that totals 10,300 sf is located on 9,575 sf near the town center. Its prior sale was for $220,000 in Dec. 1989. In Boston, the trio conducted some 45 tours DAN MCGEE before a Gotham-based investor stepped up to secure 39 Bay State Rd. ONE DUNHAM RD., BILLERICA MA next to Kenmore Square. among a slew of listings the NAI/Hunneman trio As detailed in a prior Real secured over the summer. Casper TFG picked up Reporter article on the that 36-unit property backed by $4.95 million trade, it was done for a pri- from Brookline Bank for its principal, vate investor who had Christopher M. Shachoy, an investor active in used NAI/Hunneman to the market. The prior owners who paid $4.55 HENRY LIEBER sell a companion building million in May 2012 had conducted an extennext door at 43 Bay State Rd. in Aug. 2008. That sive renovation involving 80 percent of the units asset went for $2.62 versus the $4.0 million that pushed up rents in the transit-oriented spent by New York investor Mark Nesoff on the building. Put under contract in 2014, the asset 11-unit 39 Bay State Rd. asset that also fea- actually changed hands the first week in 2015. tured seven parking spaces. The seller was Linda Minnerly and Osvold worked with Ross on Tosi, trustee of 39 Bay State Road Real Estate the C-III assignment while the Braintree listing TR. Dating to 1899, 39 Bay State Rd. is a 7,225- done with Plunkett involved a 30,000-sf buildsf property with seven units that her family had ing on 2.6 acres at 11 Brooks Dr. that KS held since June 1969. Partners dispatched to a user, plumbing products Another rapid-fire listing brought $6.6 mil- wholesaler Ardente Supply which relocated from lion to investors Donald J. Leone and Frank S. Allston. The building was in a $52 million portPannesi of 119 West Wyoming Ave. in Melrose, folio purchase by KS Partners and its founder

Kambiz Shahbazi. “KS has now further lowered its Flatley portfolio basis, which will help its already rapid office leasing in Braintree while Ardente gets a great flex building for its rapidly expanding business, making it exciting times for both seller and buyer,” Plunkett said afterwards. Ardente Supply borJ.P. PLUNKETT rowed $1.72 million from Citizens Bank to facilitate the acquisition. Ross and Barroso advised KS Partners on another sale, that being 3 Riverside Dr. in Andover to Jumbo Capital. The 90,000-sf Andover Research Center that was constructed in 1985 and renovated in 2012 is a two-story building that brought $4.0 million (see related story, suburban office section). u

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Burlington border, 805 Middlesex Tpk. “is wellpositioned to take advantage of the surging Burlington market and cater to today’s hightech tenants,” Pullen said after C&W brokered that transaction. In a different deal at 205 Burlington Rd. in Bedford, Calare Properties paid $2.3 million for 51,500 sf of flex/office space that CEO Bill Manley later said would receive needed maintenance via “a significant capital improvement program” that will include a new roof plus improved common areas, signage and façade 140 AND 150 WOOD RD., BRAINTREE MA and landscaping improvements. “Few opportuBack in Bedford, the big splash of 2014 nities remain where tenants can acquire a quality single-story office, research and develop- occurred when Charles River Realty Investors ment, or manufacturing space with major road and National Development shelled out $95.5 exposure in this desirable area,” Manley million for Crosby Corporate Center. Eastdil Secured was broker on that quietly marketed observed. On a larger scale, a partnership of Jumbo listing on a team that included Brian Barnett, Capital and broker/investor Bradford Spencer Peter Joseph, Sarah Lagosh, James McCaffrey picked up 100 Crosby Dr. in Bedford last August and Christopher Phaneuf. It was the same group in a $50 million investment also meant to cap- that advised CRRI/NatDev on its $98.5 million ture sticker-shocked companies, although disposition of Unicorn Office Park (see story this Oracle Corp. presently leases all 254,000 sf at publication). Deutsche Asset & Wealth the 52-acre complex which features a confer- Management was seller of Crosby Corporate ence center, full-service cafeteria and fitness Center, a nine-building campus totaling facilities. [Jumbo followed that up with the 587,000 sf. The enduring property which was $18.1 million purchase of 1900 Crown Colony constructed in the 1960s and expanded in 1998 Dr. in Quincy, a first-class office building totaling is located near Route 3 and a short drive to 135,000 sf, of which 40,000 sf was available Route 128. Eastdil’s Joseph declined to discuss specific and is being marketed via Colliers. Arbella Insurance Co. was the seller there and will con- deals, but maintains visionary investors such as CRRI/NatDev recognize the temporary nature of tinue to occupy space in the building.]

real estate cycles. “There is an understanding that office buildings and business parks near major interchanges are not going to fall out of favor forever,” Joseph offers while CRRI principal Brian Kavoogian seconds that notion in explaining why his firm doled out such a hefty sum for Crosby Corporate Center. “I think in a very short time, a lot of people are going to wish they had gone after that one,” he says of a property 98 percent leased when purchased but where 52 percent of the leases roll over the next three years. High ceilings and abundant natural light are among the features touted by the new owners who secured a $72.6 million loan from Santander Bank and are implementing a $5 million capital improvements program to common areas, facades and amenities including cafes and fitness facilities, creating an environment where Crosby will be repositioned “as a Silicon Valley-like tech” campus. u

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same crew of David Martel and Molly Davis who have represented the landlord in its Heritage Two agreements. To Murphy, all necessary elements are in place to revitalize the complex, including Campanelli’s vertically integrated approach that comes into play whenever he is sifting through upwards of 500 CRE listings that come across his desk annually, of which about 10 percent are pursued and two or three are generally acquired. The JACK KERRIGAN 2014 tally eclipsed 267 LOWELL RD., HUDSON NH 500,000 sf purchased for the firm rooted in construction which became a leading regional investor following the 2008 recession, a period when Campanelli connected with TriGate Capital to acquire underSTEVE COOK performing real estate, in many cases assets having been taken back by the bank and untended for years ala Heritage Landing. ”Some people you STRAWBERRY HILL CORPORATE CENTER, ACTON MA might call value-add investors have a different to them with a novel concept of packaging the approach from us,” now-stable 48,000-SF asset with a New BILL SULLIVAN Murphy observes in Hampshire building in Hudson that Campanelli explaining that “it has to acquired in 2013 and proceeded to fill all be broken and we need to 90,000 sf to Mercury Computers in deals negofeel we can fix it and we tiated by Cushman & Wakefield and usually have more confi- Transwestern RBJ. The Colliers team included principals Scott dence in those situations than other people do.” Its Dragos, Douglas Jacoby and Michael deft demeanor was on dis- McLaughlin, brokers in early 2014 at play in 2014 after NAI/Hunneman Commercial Co. who negotiatANNE FLANAGAN Campanelli bought a four- ed the portfolio sale to Campanelli on a team building package split between 289 Great Rd. with Gina Barroso and David Ross. Dragos, in Acton and Chelmsford, a 300,000-sf assem- Jacoby and McLaughlin then joined Colliers and blage that included 25 Industrial Rd. plus 220 were joined by Anthony Hayes and Timothy and 222 Mill Rd. in the latter community. In Mulhall in approaching the ownership with the making similar improvements at 25 Industrial proposal: by fusing 25 Industrial Rd. and the Rd. in Chelmsford and the Strawberry Hill Office New Hampshire building together, Campanelli Park in Acton, Campanelli fixed up 25 Industrial would command a higher price than if sold indiRd. and signed Comcast to a long-term lease vidually, reasoned the Colliers team. The conbefore the Colliers Capital Markets team came cept worked when RAM Management of Maine

300 FRIBERG PKWY., WESTBOROUGH MA

agreed to pay $21.2 million for the pair in a deal that closed in November with CIBC Bank mortgage financing arranged by the Colliers debt and structured finance group.. Jacoby opines the sellers made a rational decision. “Campanelli and Trigate are smart enough to know what a good price is, and I think they were very happy with the offer,” he says, a view shared by Murphy. “We addressed issues that made it valuable to the buyer,” Murphy recounts, completing in the New Hampshire trade an interesting process where GREG KLEMMER the prior owner and occupant was looking to downsize and sell its property, requiring a hands-on investor to be approached, in which case C&W’s New Hampshire team singled out Campanelli as just the TIM BRODIGAN sort who might have the skills to take on a challenging property, then united them along with Transwestern RBJ to Mercury Computers which was in need of the specialized infrastructure at 267 Lowell Rd. That was imporROBERT GLOR tant, Murphy says, because “Southern New Hampshire is a tricky market and you really need to buy at the right price.” As to the swift execution there and at 25 Industrial Rd., Murphy says the intention was not to flip either so quickly but “we were happy that we were able to get in there and do something to improve those properties and then get out in a timely manner.” continued on page 109

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As to whether the firm has anything picked out to spend the proceeds on from that sale, Murphy was non-committal, among many early recovery buyers fretting that pricing is getting overheated again and viable pickings increasingly slimmer for value-add players. “Our expectation is that 2015 will be as much concentrated on finishing up what we started in 2013 and 2014 as it will be looking for new opportunities,” he says. “You have to look harder today, no question about it, but we are sometimes the high bidder and that is okay with us if we feel we can use our (in-house) talent to do something with it . . . If the numbers work, we are going to pursue it.” PETER BROWN Campanelli has plenty to contend with already in the Heritage Landing expansion and tending to the remainder of the Acton/Chelmsford holdings, and there the leasing division led by Peter Brown is on the case, with Danielle DANIELLE SIMBLIARIS Simbliaris overseeing the Strawberry Hill complex that has 84,350 sf on four floors. She is working with the Avison Young leasing team and with Colliers on the remaining Chelmsford buildings that have 113,000 sf, in that case principal Greg Klemmer at the helm with Tim Brodigan and Robert Glor. The AY crew at Strawberry Hill includes principals Jack Kerrigan, Steve Cook, Bill Sullivan and Vice President Anne Flanagan who have already filled space in the building via multiple commitments. In another venture, Campanelli joined Thorndike Development last autumn in breaking ground on a new multifamily community on 24 acres at its 82-acre Upland Woods complex in

UPLAND WOODS, NORWOOD MA (RENDERING)

25 INDUSTRIAL RD. CHELMSFORD MA

Norwood. The effort will deliver 262 units this year in a master-planned mixed-use park and the construction arm is also busy assisting clients on a third-party basis in all facets of commercial and institutional projects. “We are committed to delivering an attractive neighborhood that will benefit not just those who choose to reside at Upland Woods, but all of Norwood and the surrounding communities,” Campanelli principal Jeff DeMarco said at the groundbreaking that drew other members of the family owned company including Jeff DeMarco and Rob DeMarco along with Thorndike principals Lloyd Geisinger and David

Eastridge plus officials from the Massachusetts Housing Partnership. Campanelli also joined in on the Westborough sweepstakes in which a number of office buildings changed hands there in 2014, with their entry a 31-year-old building at 300 Friberg Pkwy. Secured for a mere $2.25 million last June, the asset is now being marketed via Transwestern RBJ and its leasing team of principals John Lashar, Paul Leone with Senior VP Vicki Keenan and Associate Danielle DeMarco. The property in the Westborough Business Park is also being renovated by the u Campanelli operation.

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187,000-sf shopping center went for $21.0 million. This past December, the team oversaw the $24.4 million asset’s transfer to Slate Properties. Set on 42.8 acres at 35 Manchester Rd. occupancy at Derry Meadows was 90 percent when sold, the space filled by 14 tenants. Anchored by Hannaford Brothers supermarket, retailers feature Burger King, Dollar Tree, Game Stop, TD Bank North and UPS Store as well as a fitness center, movie theatre and several restaurants “Derry Meadows features an ideal tenant roster of strong national and regional retailers, while sharing access with a recently constructed Wal-Mart Superstore” said Millerd in also praising the sponsor for its stewardship. Katz Properties is an experience retail group led by Daniel Katz which is active throughout New England focused on value-add opportunities. The Derry site is considered an excellent location for commercial traffic along Interstate 93 with traffic counts exceeding 83,000 vehicles daily. Derry Meadows Shoppes was initially constructed in 1999, but was extensively renovated and expanded between 2000 and 2004,” outlines Smith. “As a result of these efforts, the center is positioned for long-term

DERRY MEADOWS SHOPPES, DERRY NH

success in what is becoming a dynamic shopping corridor,” he relays. Retail has always enjoyed a privileged position in the Live Free or Die state, and as the economy recovers it has returned with a vengeance, a bounce retail experts say will likely continue in 2015, and already has for the C&W crew, which as Real Reporter relayed last week has just closed on

another grocery anchored shopping center, that one on the Vermont border in West Lebanon acquired by Eastern Real Estate of Massachusetts from Dead River Properties. The 81,300-sf Powerhouse Plaza brought $12.3 million, its strengths like Durgin Square being a magnet for cross-border tax activity as part of a vibrant retail corridor. u

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CAMPANELLI BUY continued from page 30

100 percent occupancy in the near future. Speaking on the condition of the Maine real estate market, Gardner talked of the “explosion” he has witnessed since the sector began to finally heat up in 2013, attributing it to the “pent up demand of buyers, as well as low interest rates.” The property benefits greatly from its prime location in the Old Port district, a growing tourist attraction with its cobblestone streets, 19th century brick buildings, and assortment of boutiques, bars, and independent residents attracting thousands of visitors every day. In 2006 Portland undertook its Ocean Gateway project to serve as a city cruise ship terminal, which encourages even more visitors to the vibrant Old Port. In 2014, 125 PRESUMPSCOT ST., PORTLAND ME the American Planning Association named ing, the office complex was fully occupied with Congress Street as one of the exception of a 4,100-sf freestanding office its best 10 thoroughfares building. That the property was purchased by a in America, highlighting New York City based investor is indicative of the the growth of Portland’s continuing trend of the Portland market becompopularity as a tourist des- ing increasingly attractive to outside investors, STEVE BAUMANN tination, a factor in its industry experts spoken to maintain. steady real estate growth. Portland was not the only area in Maine to Elsewhere in Portland, experience CRE activity in 2014. Well north of the other sales demonstrated Queen City, Ellsworth witnessed the sale of a 19this steady growth, and its attractiveness to out-ofstate investors. A multitenanted office complex known as The Roundhouse DREW SIGFRIDSON at 125 Presumpscot St. sold in December. The 71,000 SF office campus was bought by Roundhouse LLC, who was represented by Dan Greenstein of CBRE The Boulos Co. Steve Baumann of Compass Commercial Brokers advised the seller. Tenants include the state’s Administrative Office of the MATTHEW CARDENTE Court and the Department of Motor Vehicles, Cardente Real Estate President Easter Seals, Matrix and Pizzagalli Construction. The campus includes a total of five build- acre property, which included a 97,000-sf shopings; two are newer, but designed in a theme ping center. The shopping plaza includes retailers similar to the original building, which was orig- Reny’s and Shaw’s, as well as multiple acres of inally constructed in 1940 as an automobile undeveloped land to the rear. The purchaser was maintenance facility. The property was pur- registered as Ellsworth Shopping Center, LLC, chased for $8.4 million, and at the time of clos- with John Devine an attorney with the Portland-

“

The purchase of 511 Congress Street is great opportunity for Ed (Gardner) and is a win for the city of Portland.

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ELLSWORTH SHOPPING CENTER, ELLSWORTH ME

based law firm, Verrill Dana, listed as the registered agent. Seller Matt Van Loon yielded $7.2 million with a cap rate of 7.6 percent rate, relatively low for that market. The property had been in Van Loon’s family for almost 50 years when he put it up for sale in 2012. The strong investment market showing for Maine is taking place amidst a national market that is finally recovering from the 2008 crash. Nationally this year, investment real estate transactions finally reached the volume seen in the heyday of 2007. Pergola remarked that he saw Maine’s strong showing as a reflection of the broader recovery. “It’s a testament to the overall market in general. People are looking for healthy markets that will perform steadily.” Portland is an attractive secondary market due to its reliable and steady growth. You don’t see the “spikes and plunges” that are witnessed in other, more volatile markets. Drew Sigfridson, SIOR, and Managing Director at CBRE Boulos Co. concurs that the real estate market in Maine for “2014 was really terrific with tremendous investment demand from local as well as out-of-state investors and across all market types.” Sigfridson adds the most demand for net-lease, multi-family, urban office and mixed-use buildings. A confluence of factors were given by the experts as to Maine’s real estate investment growth this past year and into 2015 when two office building sales accounted for more than $100 million between them, as previously detailed in Real Reporter. Increasing consumer confidence and economic growth, the view of Portland as an attractive tertiary market and increased demand for first-class office space as vacancy rates decrease. The record start to 2015 has included the $66 million trade of One and Two Portland Square through Cushman & Wakefield, that a $66 million consideration for more than 258,000 sf of Class A office space in the heart of downtown. Separately, Albany Road Real Estate Partners of Boston shelled out $35.3 million for 195,000 sf at 100 Middle St. In the Real Reporter article announcing that pact, Albany Road President Christopher J. Knisley lauded southern Maine as a vibrant economic area, and noted 100 Middle St. has remained a solid performer even in the market slump, with occupancy at 99 percent and virtually all of the leases are in place at least until 2021. u

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BRA Suburban CRE Team Contributes D BY JOE CLEMENTS EDHAM — The Boston Realty Advisors trio of Jeremy A. Freid, SIOR, Adam T. Meixner and Jordan B. Sneider troll the western inner suburbs of Boston with a multitiered menu of CRE services for clients including both leasing and sales expertise, and in 2014 the team completed several deals of note on both sides of the ledger, among them trades of a long-held Dedham office park and a Needham building harvested for Maric Inc. to developer SMC, a wellestablished Watertownbased firm active across New England which reportedly intends to occupy the building in question, a former Gold’s Gym at 130150 A St. The suburban JEREMY A. FREID team also separately coordinated with BRA retail expert Michael d’Hemecourt on the sale of a former Gulf Station at 1180 Boylston St. in Brookline to investor Raj Dhanda last August, reaping $3.85 million for what ADAM T. MEIXNER is essentially a 14,700-sf land play, albeit a prized one on Route 9 across from the Longwood Cricket Club. Although smaller than the business park at 270280 Bridge St. in Dedham bought by Marwick JORDAN B. SNEIDER Associates last October at a consideration of $4.47 million, SMC paid more for the 39,600-sf flex building on nearly four acres at 130-150 A St., with that mid-summer 2014 sale fetching $6.5 million, twice what Maric Inc. owner Mark H. Rubin had spent to tie up the now-35-year-old property three years earlier. There were reasons for the higher price tag versus Maric’s going-in rate, Freid told Real Reporter following its closing, crediting Rubin for extensive improvements to the building interior, landscaping and parking lots combined

130-150 A ST., NEEDHAM MA

270-280 BRIDGE ST., DEDHAM MA

with macro changes to the surrounding area including upgraded highway access to Route 128 and an ambitious repositioning of the New England Business Center into “Needham Crossing,” a concept that aims to bring more

“

The buildings are rock solid and it is very hard to find such a large infill opportunity inside Route 128.

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RICHARD BRADBURY Babson Real Estate Advisors

amenities to the venue. The communities of Needham and Newton have also launched a collaborative effort to stimulate business and attract companies and scored a coup when TripAdvisor agreed to move its headquarters to the property . In Dedham, BRA was advising the family of the Jackson Construction Co. operation that

from the 1960s to 1990s was a staple of the Route 128 area between the South Shore and Waltham until merging with another group and relocating to Reading in 2010, making its Dedham headquarters expendable. BRA was then retained to find a taker and ultimately procured Marwick Associates, an established CRE group which was advised in the deal by industry veteran Richard M. Bradbury. Marwick, as an earlier Real Reporter article outlined, has CRE holdings across Massachusetts including assets in downtown Boston and its Lexington headquarters at 80 Hayden Ave. “The buildings are rock solid and it is very rare to get such a large infill property inside Route 128,” Bradbury told Real Reporter in detailing his client’s interest. Marwick principal John Sisk said his firm would overhaul the roofs and HVAC systems on top of common areas and provide TI allowances for tenants. “We are open for business,” Sisk declared at the time. BRA had already gotten the leasing program going RICHARD M. BRADBURY in advance of the asset’s sale, and Sisk said his firm will continue that campaign, having acquired 270-280 Bridge St. at about 50 percent occupancy, one reason for the low basis of about $65 per sf. Bradbury said the office space was well-constructed by Jackson for its own purposes, and would translate well as a multi-tenanted investment once the improvements are completed. “It is going to be nice, premium space that will really appeal to professionals,” the founder of Babson Real Estate Advisors told Real Reporter at the time. The older and smaller of the two buildings is 280 Bridge St., a two-story, 29,500-sf structure dating to 1974 with 15,150 sf of office space and the remainder warehouse while 270 Bridge St. has just over 39,000 sf of office space featuring ribbon windows and a three-story glass, bronze and granite atrium. It came on line in 1985. The 6.3-acre parcel provides for a parking ratio of 3.3 vehicles per 1,000 sf leased. u

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REAL IDEAS is to start dialoguing with the lender/servicer well before the loan maturity date.The following is a list of Best Practices CMBS Loan Negotiation Guidelines we have developed for our clients and borrowers: 1) If you plan on defeasing the loan or paying off the loan at par on the balloon maturity date, you should contact the servicer three to six months prior to the loan maturity and synchronize the pay-off details. This allows the servicer ample time to deal specifically with your loan. Servicer caseloads are expected to rise in the fourth quarter of 2015 due to the significant increase in the volume of loan maturities. 2) If you plan on retiring the loan but may need an extension beyond the maturity balloon date to secure your take-out financing, you’ll need to negotiate an “extension” and/or a “waiver of fees” with the servicer. Otherwise, prepare to potentially pay onerous default interest and late fees. Ideally, a conversation requesting one or both of these accommodations takes place six to nine months prior to the loan maturity. Now is a key time to communicate your action plan with the servicer. If you don’t communicate with the servicer at this juncture, you’ll limit your ability to get the additional time and/or relief you may require. 3) If paying off the lender at par poses an issue, discuss strategy at least 12 to 18 months prior to loan maturation and preserve your options before the window to negotiate closes. Servicers are unlike traditional balance sheet lenders. Limited by their fiduciary responsibilities to a Trust and resource constraints, they often appear more rigid and seemingly irrational during negotiations. The borrower needs to work with informed intelligence and cooperate with the servicer to impact a resolution.

Photo: Derek Szabo

continued from page 34

lion in 2012. By all accounts 2013 and 2014 were healthy years for an owner needing to borrow money in the capital markets. According to multiple sources stemming from the February 2015 MBA conference in San Diego, projected CMBS new issuance volume for 2015 is esti-

“

Based on The Henley Group’s research, 17 percent of all CMBS loans are either on the servicer’s “Watch List” or already transferred to the special servicer. We believe the percentage will likely increase in the following three years.

Clear skies with scattered clouds Currently, the CMBS delinquency rate is about 5.66 percent, comprising approximately $29.9 billion in loans. This is down from the 2012 peak of 10.3 percent or about $60 billion. The number of loans more than 60-plus days past due has dropped steadily from 2012 as many primary markets have rebounded due to accelerated leasing velocity, increased rental rates and borrowers’ ability to benefit from low interest rates. CMBS issuance in 2014 was $105 billion vs. $86.1 billion in 2013 and $48.6 bil-

”

mated to be in the $125 billion range. According to a January 7, 2015 National Real Estate Investor article authored by Elaine Misonzhinik entitled, “CMBS Issuance to Shoot Up in 2015, but Sliding Underwriting Standards Pose a Risk,”: “As the industry moves in 2015, underwriting standards will only get worse, according to 88 percent of CRE Finance Council’s survey respondents. Industry professionals are most concerned about rising LTV ratios, followed by (the Lender underwriting)

THG’S CMBS RISK PARADIGM

lower debt yields and an increase in interest only loans”. Based on The Henley Group’s research, 17 percent of all CMBS loans are either on the Servicer’s “Watch List” or already transferred to the special servicer. We believe the percentage will likely increase in the following three years. The upcoming 2015-2017 loan maturities, which comprise 2.5 times the loan volume that matured from 2012 to 2014, appear to be taking a toll on markets that have not economically rebounded to the levels of 10 years ago. Many property owners with overleveraged loans are finding it difficult to justify expending capital for lease-up costs or deferred maintenance or even for persistent monthly debt service shortfalls. Frankly, if there is little chance of refinancing their current loan in any economically reasonable fashion, making significant contributions to the property makes little sense, especially given the non-recourse nature of CMBS debt. While handing the servicer the keys is always an option, due to tax consequences, reputation concerns, and economic incentives, a modification or restructure of the current loan may yield a much more advantageous result for the owner.

Time to take out the umbrella The first step to solving any problem is realizing that you have one. As it also turns out, the sooner you initiate conversations regarding a resolution, the higher the probability of successfully retaining the property. The Henley Group, a CMBS loan workout specialist, has tracked data on the $1.5 billion in loan workouts that they have advised on since 2009. (See attached - The Henley Group’s CMBS Risk Paradigm.) Approximately two-thirds of the properties where the owner was either “Proactive” or “Active” in dealing with issues resulted in retaining the property. Loans imminently defaulting that required “Immediate” attention had a 15 percent dip in successful resolutions, largely dependent on the borrower’s willingness to transact. In 50 percent of these “Immediate” transactions, THG had negotiated a successful discount accepted by the servicer. In certain cases, due to the borrower’s loss of confidence in their market, inability to re-tenant their building or insufficient capital, borrowers opted to turn over the property to the servicer. When a loan was transferred to special servicing, the borrower’s window to dialogue with the special servicer closed quickly and the opportunity to continued on page 113

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CMBS LENDERS continued from page 34

nies. It is a trend that has shown no sign of abating, as the relative positions of the banks have remained unchanged through the first quarter of this year. But Gorga also observes that by the fourth quarter, when Fannie Mae and Freddie Mac hit their 2015 federally mandated multifamily caps of $30 billion, many of those transactions may swing towards the CMBS space. Goedecke & Co. principal Shawn Herlihy says he feels CMBS will soon become a bigger player in the region. “What we’re seeing is that the Deutsche Banks and the JPMorgans are still doing the bigger deals, but the smaller groups are making headway in the smaller loan market,” explains Herlihy. “They started getting ramped up in 2013 to 2014, but I think they’ll be more of a force in 2015 to 2018 when those 10-year loans that were done in 2005 to 2007 start to mature.” WELLS FARGO PROVIDED AN AFFILIATE OF CREDIT SUISSE $25 MILLION TOWARDS THE $50 MILLION PURHerlihy predicts there will CHASE OF 400 ATLANTIC AVE. OVERLOOKING BOSTON HARBOR IN BOSTON, MA. be a strong demand for interest-only (I/O), highleveraged deals in the $5million to $10-million L.A. DRINKWATER range that the smaller CMBS groups will be able to provide. “And if I was a bank lender, I would certainly keep my eye on that CMBS market that continues to emerge in the smaller loan size,” he advises. SETH J. RICHARD Goedecke & Co. arranged a number of notable CMBS loans in CVS PHARMACY, 1075 BROADWAY, SAUGUS MA. New England in 2014, including two instruments totaling $28.3 million to Albany Road Framingham purchased by Inland Real Estate; Needham ($15.3 million); and also provided Real Estate Partners (through Barclay’s) to buy and $32.5 million of the $50 million purchase $14.5 million in refinancing to Synergy a pair of Connecticut office properties—the of 100 Crosby Dr. in Bedford by Jumbo Capital Investments for 200 Newport Ave. in Quincy. Morgan Stanley also made their presence two-building, 155,000-sf Meriden Executive of Hingham. JPMorgan provided CMBS financing on a felt, as did Wells Fargo. The former provided Park in Meriden for $11.9 million of the $16.3 million sale price, and$16.4 million of the dozen deals locally, including $39.5 million of Pappas Enterprises a five-year, $78.9 million $20.5 million cost of the 165,000-sf office the $52.7 million sale price to the Bulfinch Cos. I/O loan to refinance their 720,500-sf mixedbuilding at 1690 New Britain Ave. in to acquire the 213,000-sf office property at use Pappas Commerce Center in the Seaport, a Farmington. Both loans were 10-year fixed rate 117 Kendrick St. in Needham from property which consists of warehouse, office debt with five years of interest-only payments. Intercontinental; multiple refinancing deals for and retail space; as well as $18 million for Goedecke & Co. also arranged a $36 million the Bulfinch Cos., including 100 Cambridge Kimco Realty Corp. to refinance the Shops At loan to developer Orion Property Group Discovery Park in Cambridge ($55.5 million), The Pond in Marlborough. Wells Fargo providthrough Cantor Fitzgerald (CCRE) to finance 320 Needham St. in Newton ($20.2 million), ed an affiliate of Credit Suisse $25 million student housing for the Universities of Maine Hillside Office Building in Needham ($20.7 mil- towards the $50 million purchase of 400 ($16 million acquisition) and University of New lion), Forbes Business Center in Lexington Atlantic Ave., and $15 million in refinancing for ($29.2 million), 1560 Trapelo Rd. in Waltham a cold storage facility in Sharon to Jumbo Hampshire ($20 million refinance). CCRE, which announced the opening of a ($18.7 million), and First Needham Place in Capital. u Boston office in June, also arranged $16.5 milAbout The Henley Group lion (via Deutsche Bank) of the $21-million The Henley Group is a well-established comacquisition by GFI Partners to acquire 420 E St. mercial real estate advisor specializing in CMBS in South Boston, an 88,000-sf industrial prop- continued from page 112 erty (see related story, page 13), and the $7.9 resolve the issue with the lender dropped to 33 loan workouts and client advocacy. Since 2009, million acquisition of a Saugus CVS by an affil- percent. Once the foreclosure process was The Henley Group has offered highly specialiate of New York-based Barrington Equities LLC underway for some time, chances of success ized, concierge–level service, earning the highest marks from its clients and a vote of confithrough the Marcus & Millichap team of Laurie diminished even further. dence from the special servicers. They have “L.A.” Drinkwater and Seth J. Richard. Deutsche Bank was very active in Greater Pot of gold at the end of the rainbow negotiated in excess of $1.5 billion of non-perThe moral of the story is this: when it comes forming and performing CMBS loans with disBoston last year in addition to financing the results, landmark One Kendall Sq. sale by Related Beal to dealing with an upcoming maturity on your tinguished and Rockwood Capital via Cushman & CMBS loan, procrastination can be the main dif- www.thehenleygroup.com/the-henley-groupWakefield and providing Oxford Properties $80 ference between success and failure. The sooner risk-paradigm. Henley’s team is comprised of million towards the $405-million acquisition of you realize that there may be an issue and pick industry veterans who have worked for various One Memorial Dr. in Cambridge from up the phone to explore your options with a CMBS platforms since the industry’s inception, Blackstone; $15.9 million towards the $26.5 CMBS professional, the better the chance of including Wells Fargo, Bear Stearns, and ABN million sale price of the BJ’s Wholesale Club in finding the pot of gold at the end of the rainbow. AMRO/LaSalle Bank. u

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$200 million. One of the key features of last year’s deal: DivcoWest divided up its new acquisition into two companies, with the holdings divided along Cambridge’s Binney Street. The two sites can now be developed and sold separately in the future, Phillips explains. “It took a lot of work,” he says of the entire One Kendall Sq. transaction and the complex subdivision into two entities. The One Kendall Sq. ROBERT C. BUCKLEY deal was a slight departure for DivcoWest, which earlier this decade was buying up HOMEWOOD SUITES, 111 BOYLSTON ST., BROOKLINE MA (RENDERING) Class B properties in the Fort Point area of Boston, but recently sold three of its buildings for $105.6 million. HFF was broker on that deal while Goodwin Procter SIOBHAN C. MURPHY LLP participated in the transaction with attorney Nicole W. Riley listed in deed documents for that agreement. Riley was also involved in one of the largest transactions in Boston this CROSSROADS, HOPKINTON MA (RENDERING) decade as part of the GP NICOLE W. RILEY team that advised Boston GreenOak Real Estate on its joint venture pur- lawyers were called in to help with zoning and Properties on a 45 percent sale of its interests in chase of Ten Post Office Square in Boston’s permitting issues resulting from major mergerthe city’s Atlantic Wharf and 100 Federal St. office Financial District on a team that also included and-acquisition deals and redevelopment projtowers plus 601 Lexington Ave. in New York (see Associate Ryan Sawyer, Partner Broderick and ects. For instance, Bowditch & Dewey’s legal work story, page six). The deal completed in Q4 was counsel Katie Murphy and Eric Labbe on that valued at approximately $1.5 billion brought in purchase in partnership with Synergy last year included getting necessary approvals for Norges Bank Investment Management in a Investments from Broadway Real Estate Partners TJX’s 90,000-sf expansion of its Framingham recapitalization arranged by Eastdil Secured. Led that was handled by Cushman & Wakefield and holdings on Speen Street. The firm also helped Grossman Development by partners James Broderick and Siobhan Murphy first unveiled by Real Reporter, which is headwith its planned mixed-use from GP’s real estate practice and tax expert quartered in the historic, 445,000-sf building in redevelopment of the old Mark Kirshenbaum, other team members partici- the heart of Boston’s Financial District. In Lowell, Brown Rudnick represented the Spag’s site in Shrewsbury pating in the complicated transaction included into 100,000 sf of retail and Chris Reale, David Patton, Argyrios Saccopoulos, long-time co-owner of that city’s landmark Cross Point office towers (formerly the home of Wang office space, including 250 Rich Matheny, Dan Adams and Rob Petitt. apartments and 14 townGP also participated in one of the largest Labs). The 1.2 million-sf, concrete-exterior towers houses. The developer is retail portfolio sales of the decade in the Bollard finally sold last year for $100 million to the newly RICHARD GASS hoping to start construction Group’s disposition of two dozen properties to created Anchor Line Partners. Cross Point had been for sale since late last this spring, according to Kimco Realty Corp. through HFF, a $270 million officials. “Last year saw the consideration. Partner Andrew Sucoff led the decade and was close to trading in 2008 for beginning of a really robust effort that also included Associates Freddie nearly $180 million, but that deal fell through commercial real estate marAkrouche and Patrick Hurley (see story, page 14). as financial markets and the economy noseket and we think it’s going The relationship with retail giant Kimco extends dived following the collapse of the subprimeto continue,” says Bowditch back to 2003. Murphy and Hurley also advised mortgage market. Cross Point is perhaps best known for being pur& Dewey Managing Partner chased at a bankruptcy James Hanrahan. auction in the winter of JAMES HANRAHAN In general, city and 1994 for only town officials seem more $525,000. Long-time open these days to mixedpartners in the most used developments, as recent Cross Point opposed to projects domitransaction included nated by one component of DivcoWest along with commercial real estate such Canada's Public Sector as just offices or retail. Pension Investment Communities want a combiDONALD LUSSIER Board. nation of functions, often Of course, not all near public transit or major highways, says legal activity within Hanrahan. But that push toward more mixed-use projcommercial real estate involved the sale and ects also means more complex and time consumacquisitions of high- ing permitting and zoning issues, not to mention profile properties in the more complex financing and ownership schemes. region. Across eastern An example is the proposed Crossroads Massachusetts, CRE CHANNEL CENTER, SOUTH BOSTON MA continued on page 115

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Development in Hopkinton just off of Interstate 495 and at site of the former EMC Corp. headquarters. The developer, Crossroads Redevelopment Partners LLC, is planning a $200 million mixed-use transformation to include offices, retail, a hotel and potentially hundreds of residential units. Bowditch & Dewey represents Crossroads DENNIS E. MCKENNA Redevelopment Partners, whose architect is Perkins + Will, led by principal Robert Brown and Brian Healy. The town of Hopkinton desperately wants the old EMC site, largely abandoned for a number of years, occupied again. But STEVEN SCHWARTZ the developer needs zoning changes that would allow a mixed-use redevelopment. Robert C. Buckley, Senior Partner in Real Estate at Riemer & Bruanstein LLP in Burlington, agrees that the increased willingness of communities to consider JAMES H. SHULMAN mixed-use developments is helping the overall commercial real estate market, particularly in the suburbs. The new mixed-use approach is making properties more flexible in what they can accommodate in the future, thus increasing their desirMARK T. VAUGHAN ability and value by investors, he says. Buckley’s firm has been busy the past few years, not just in 2014, with a number of property repositioning across the region. In 2014, his law firm helped Atlantic Management Corp. with its WILLIAM S. WILSON redevelopment of the old Hewlett-Packard campus in Marlborough, formerly known as Forest Park and now renamed Marlborough Hills. Besides offices, the redevelopment project also includes 30,000 sf of retail space, a 155-room hotel and 350 new apartments, courtesy of AvalonBay, which recently purchased a piece of the 110-acre property from Atlantic Management. Another massive repositioning proposal includes New England Executive Park in

33 BOSTON POST RD., MARLBOROUGH MA

Burlington, where the new owners of the one- site, including 100,000 sf of retail and restaumillion-sf site have received zoning approvals rants on the ground floor. At Assembly Square, for hundreds of thousands of sf of new space. Goulston & Storrs is also representing AvalonBay, The plan includes two new buildings, a 155- which so far has developed two key multifamily room hotel and three restaurants—all of it to buildings with hundreds of residential units at make the park more competitive moving for- Assembly Square. ward. Constructed in the 1970’s by Spaulding & To give an idea about the potential future Slye, NEEP was bought for $216 million two growth at Assembly Square and how busy years ago this spring by a partnership of AEW Goulston & Storrs will be over coming years: The Capital, Charles River Realty Investors and site is permitted for up to 2,100 residential National Development. The previous owner was units, 1.7-million-sf of office space, 500,000 sf Equity Office Properties. of retail, plus a hotel, outSteven Schwartz, a lines Schwartz. partner and co-chair of In Boston, Goulston & Goulston & Storrs’s real Storrs also represents New estate group, says last year England Development, was “very strong” precisewhich late last year sold ly because of the amount off a portion of its Pier Four of mixed-use development property in Boston’s projects now underway in Seaport District to New the Boston area. Property York real estate giant owners and developers, Tishman Speyer for $70 THOMAS J. PHILLIPS eager to attract companies million. Tishman has begun Brown Rudnick Attorney and young workers to construction on two buildoffice parks, want to offer a variety of uses and ings that will contain condominiums, office amenities at properties, he says. space and restaurants. And sometimes they are willing to build Previously, New England Development, with entire new neighborhoods to achieve that goal. the help of Goulston & Storrs, had obtained city In 2014, Goulston & Storrs was busy represent- approval to build a one-million-sf project on the ing Federal Realty Investment Trust, lead devel- property with offices, homes, a hotel, restauoper of the massive $1.2-billion, mixed-use rede- rants, and a large waterfront park. New England velopment of Somerville’s old Assembly Row, a Development has also signed a deal with former automobile-manufacturing site. Partners another developer, Hanover Co., to build a 21HealthCare has already agreed to be the anchor story apartment building at the edge of the pier tenant at Assembly Square and construction along Northern Avenue. That complex is set to began late last year on new Partners administra- be completed this spring. tive offices that will bring approximately 4,500 Deborah S. Horwitz, a partner and co-chair full-time workers and 1,500 construction jobs to of the real estate practice at Goulston & Storrs, the 45-acre Assembly Row site. concurs that multifamily has become a key comThe 850,000-sf building for Partners is the ponent of many commercial real estate projects first phase of a 1.1-million-sf development at the continued on page 116

“

All sectors are looking up — office, retail, mixed-use, industrial.

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ASSEMBLY SQUARE, SOMERVILLE MA

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and finance deals. “There’s an overabundance of money that’s just looking for good investments,” she says. But make no mistake: Not all major developments and CRE transactions these days involve mixed-use plans. It just seems that way at times. William S. Wilson, a partner at Greenberg Traurig LLP in Boston, reports his firm represented ProMed Properties in its sale last year of the Biewend and Tupper buildings in Boston, totaling 253,000 sf, to Arizona’s Healthcare Trust of America Inc. for about $148 million. The buildings at 15 Kneeland St. and 260 Tremont St. are fully leased by Tufts Medical Center and their acquisi- NEW ENGLAND EXECUTIVE PARK, BURLINGTON MA tions make Boston HTA’s largest market by invested dollars and annual base rent. ProMed previously purchased the properties for about $112 million in 2011. AMY L. FRACASSINI Last year’s sale of the properties shows how strong the health-care market is in Boston, Wilson says. Another example involves growth by Benchmark Senior Living, including a Woburn site TOWNEPLACE SUITES, TEWKSBURY where an 87-unit assisted PAUL L. FELDMAN living facility is being con- $100 million refinancing of two apartment firm’s real estate practice group busy on a series structed by the Wellesley based firm. Riemer & buildings in Norwood and West Roxbury. The of financings plus a few obligatory acquisitions, Braunstein Senior Partner Mark T. Vaughan has borrower was Chestnut Hill Realty and the although the Allston firm’s activity there was less intensive than previous years. Saul Ewing attorbeen on that assignment helping win Woburn City lender was Prudential Insurance. Other CRE financial deals that Bernkopf ney James H. Shulman worked with such clients Council approval and necessary zoning changes as Albany Road Real Estate to enable the $26 million endeavor. Back in Goodman worked on Partners and RJ Kelly Co. Boston proper, Riemer & Braunstein Senior involved the Claremont as both of those firms conPartner Dennis E. McKenna is driving another Cos., a Bridgewater REIT, tinued to expand their real development proposal, this one calling for a pro- and its multiple deals: a estate footprint, including posed luxury condominium project at 171 $25 million construction Albany Road’s foray into loan for 289 apartments in Tremont St. by Center Court Boston LLC. the Southeastern US durAnother major area of CRE activity for local Bridgewater; $21.6 million ing 2014. RJ Kelly deals law firms last year: Refinancings and other loan acquisition of the Il Lugano using Saul Ewing included deals. Bernkopf Goodmans’s Goldberg says one Hotel (now a Marriott 100 Quannapowitt Pkwy. of his firm’s major deals last year was helping Residence Inn) in Fort in Wakefield, a 168,000-sf with the Wellesley-based Feinberg Companies’s Lauderdale, FL; and the purDEBORAH S. HORVITZ office building purchased $134-million re-financing of its apartment prop- chase of 111 Boylston St. in Goulston & Storrs Attorney for $31.0 million in a JLLerties, totaling about 1,200 units, in Brighton Brookline and related $28 and Brookline. That transaction involved 19 million construction financing for a planned 130- listed trade with Digital Realty Trust. As in the case of Albany Road, many Saul simultaneous closings, driven by low interest unit limited service hotel now under construction Ewing clients explored virgin markets outside rates and a more “cooperative” lending market, on the site just outside Brookline Village. Bernkopf Goodman also represented New England this past year and continue to do Goldberg says. The lender was Capital One Bank Pinnacle Hotel in its $4.6 million purchase of so in 2015, partly due to the continued demand on behalf of Freddie Mac. Bernkopf Goodman also participated in a the TownePlace Suites in Tewksbury and related for regional properties that is increasingly driving financing. “Last year was many investors elsewhere in search of higher very active for our clients,” yields and value-add opportunities. Having says Goldberg, who added joined forces with Saul Ewing four years ago, the his firm was involved in former Dionne & Gass practice is better poised to dozens of other transac- assist clients in alternate markets, conveys tions last year, many of Michael, with the firm well-established on the them re-financings to take Eastern Seaboard. “It makes things much easier advantage of low interest and quicker to serve our clients,” she says, with rates. recent cross-border assignments leading the firm Saul Ewing LLP’s stable to Baltimore, Philadelphia and Washington DC. of well-known real estate Similar to other firms in the area, Saul Ewing investors kept the Boston clients brought practice professionals plenty of operation hopping work in the refinancing realm. “The interest throughout 2014, partner rates continue to be extremely low, but people Sally E. Michael tells Real recognize they won’t stay that way forever and Reporter. KS Partners had we have a lot of clients who are pursuing those a monster year on the right now,” Michael reports. The Hamilton Co. acquisitions front, while engaged her firm for nearly a dozen such exerthe Hamilton Co. kept the 260 TREMONT ST. BOSTON MA continued on page 117

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There’s an overabundance of money that’s just looking for good investments.

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cises, estimates Michael, whereas KS Partners did its share as well, including a $9.0 million loan for its 33 Boston Post Rd. office building in Marlborough and a series of re-financings including several CMBS loans through Barclays. For one of her most loyal clients, though, KS Partners principal Kambiz Shahbazi played a much larger role on the acquisitions scene, joining forces with Oaktree Capital to land more than one million sf at Brickstone Square Office Park in Andover, the first-class Dedham Place on Route 128 in Dedham and 141 Portland St. in Boston’s North Station. “Kambiz had a tremendous year,” relays Michael, beginning with a major retail asset in Porter Square that delivered $35.5 million for the three-level asset (see story, page six). Albany Road President Christopher Knisley has 146 MOUNT AUBURN ST., CAMBRIDGE MA been familiar with the those deals along with partner Amy L. Fracassini, Boston contingent of Saul while Conroy Development was the client repreEwing since he was at the sented on a $14.5 million disposition of 26 Rhode Island-based Koffler Dartmouth St. in Westwood. They also provided Group, a well-known CRE counsel on two smaller exchanges for $3 million investor. “We view them as each, one a 65,000-sf industrial facility in ROBERT J. DIETTRICH an instrumental and valu- Hudson and the other 104 Canal St. in North able part of the team,” Station, the latter purchased by Kishor Patel. recounts Knisley, typically One of DMD’s most loyal clients is plumbing using Shulman and col- design and supply firm F.W. Webb, an everleague Donald Lussier in a expanding entity which favors CRE ownership diverse, multi-state portfo- versus leasing, or so it would seem in a pattern lio. “They do travel with us of acquiring and often upgrading real estate it and we use them whenev- occupies throughout New England. DMD er it makes sense . . . It is Attorney Robert J. Diettrich is overseeing that WILLIAM F. GRIFFIN JR. great to have that as an account. Among the real estate deals consumoption.” The relationship mated by F.W. Webb Co. in 2014 with advice began when Shulman was from him was a $3.2 million Cape Cod Five practicing in Hartford, CT, a Cents Savings Bank loan for 171 Worcester Ct. market Koffler has been in Falmouth that was acquired by the firm in active in, as has Albany 2013, plus 33 Grove St. in Watertown, a Road, the private invest- 37,425-SF industrial building purchased for ment vehicle launched by $2.82 million in November and then financed Knisley in 2012. Their most GEORGE A. HEWETT recent assignment was on Albany Road’s $40 million purchase of two office buildings in Portland, ME, that occurred this past month. The Albany Road endeavors often have intricate structures and provisions that must be addressed, and also may involve a measure of debt from CMBS and balance-sheet lenders including many regional banks. The opening frame of 2015 has not kept pace with 2015, Michael reports in attributing the slow beginning that several Capital Markets teams have also relayed to the harsh New SALLY E. MICHAEL England winter that crippled the region’s transit Saul Ewing Attorney, on active season for system and diverted energy from the economy. CRE re-financings. “It was very frustrating,” she says, calling the record-setting cold and snow “a big factor” for this January with $2.6 million from Eagle Bank. keeping several initiatives under wraps. All that Earlier in 2014, $5.0 million was provided in a is about to change, however, Michael conveys. refinancing of a nursing home at 32 Mayo Dr. in “There are a lot of transactions building that are Holden for the Holden Nursing Home Inc. and going to be coming out,” she says. “Everybody its President, Robert G. Oriol. wants to be in Boston right now.” DMD Partner William F. Griffin Jr.’s diverse Davis Malm D’Agostine certainly grabbed its legal practice includes extensive work on bond share of the pie in 2014, including a pair of financing, and one of his larger ones of the assignments advising TransAtlantic Management decade involved the D’Youville Life and principal Anthony Goschalk on his sale of 100 Wellness Community Inc. property at 981 and CambridgePark Dr. in Cambridge to the 1071 Varnum Ave. in Lowell. The initiative feaRoseview Group at a consideration of $41.5 mil- tured a $20.5 million refinancing and $8 million lion and their client’s separate purchase of 151 in new funding for the facility. Griffin’s experiMerrimac St. in Boston’s North Station for $13,5 ence in that realm has accounted for more than million. DMD President Paul L. Feldman was on $1.3 billion in issuances for 376 transactions,

“

The interest rates continue to be extremely low, but people recognize they won’t stay that way forever.

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including over 100 Massachusetts Development Finance Agency tax-exempt bond issues cresting $470 million from 2007 to 2013. For D’Youville, the MDFA bonds were done via Enterprise Bank & Trust Co. Colleague George A. “Tony” Hewett, meanwhile, had another active 2014 assisting borrowers seeking to attain financing from the US Small Business Administration’s popular 504 program that offers favorable terms for acquiring a property that the owner intends to use at least 51 percent of for their own purposes. Low interest rates and an improving regional economy has encouraged many business owners to embrace the program. Hewett’s activities extend throughout Massachusetts, with 2014 transactions including RE Studio LLC buying 146 Mount Auburn St. in Cambridge with funding of $1.62 million from Citizens Bank and $745,000 from New England Certified Economic Development Corp., an intermediary in the process between the SBA and the borrower. South of Boston, Hewett arranged SBA 504 monies for the owners of 582 Bedford St. in Bridgewater ($240,000); 782 Main St. in Hanson ($291,000); and 21 Patterson’s Brook Rd. in Wareham ($155,000), all through Wakefield-based NECEDC. In the final hours of 2014, Hewett assisted Moe Coelho II LLC in its $1.07 million purchase of 12 Rosenfeld Dr. in Hopedale, a 17,125-sf flex building on three acres in the Plain Street Industrial Park, with NECEDC providing $445,000 and Citizens Bank loans totaling $967,500. u

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ban operations in downtown Hartford. And the stronger leasing market has helped sales activity. Last year, Shelbourne Global Solutions snapped up 20 Church St., otherwise known as the “Stilts Building,” in downtown Hartford. Shelbourne paid $45 million for the 410,000-sf building. Then Shelbourne turned its focus on 100 Pearl St., closing on the property deal in March for $37 million. The 17-story, deep-blueglass building has about 280,000 sf. Meanwhile, Constitution Plaza, a multibuilding complex with 650,000 sf, is now reportedly under contract; the seller is MetLife. And the 620,000-sf One Financial Plaza, aka the “Gold Building,” was just put on the market, McCormick says. Higher-education institutions are also active in Hartford, as the University of Connecticut, community colleges and Trinity College have all made clear their intent to bring more classes and operations to state capital. UConn is relocating its DAVID BERNHAUT West Hartford campus to the former Hartford Times Building on Prospect Street in the downtown. Trinity College recently purchased the former Travelers Education Training Center at 200 Constitution Plaza for $2 million. H. GARY GABRIEL The various moves will bring hundreds of students, teachers and administrators to the downtown on a daily basis, adding to street life and boosting sales at local shops and restaurants. There are also about 1,100 new housing units in ANDY MERIN the construction and planning pipeline in Hartford, which will further boost the vibrancy of the downtown once they’re finished. Hartford is not bragging that it is quite ready to compete against powerhouse cities such as Boston TOM O’LEARY and New York, but leaders are now advertising the metropolis as an “18hour city,” or one in which the downtown sidewalks are not rolled up at 5 p.m. every day, real estate industry officials say. “I like Hartford a lot,” KS Partners principal Kambiz Shahbazi says of a market he first entered in Oct. 2012 through the $65 million purchase of 620,000 sf of flex and office space in Rocky Hill from New Boston Fund. State officials right up to the governor have been “working really hard” to revitalize the capital city, he says, while the investment by UConn is another positive trend, says Shahbazi, whose firm owns 500,000 sf at Corporate Ridge and another 115,000 sf at I-91 Tech Center. There are a number of opportunities circulating that KS Partners is considering, he adds while declining to identify the prospects. Unlike Boston and Cambridge, “you can get still get good value” at current pricing levels in the Hartford region, says Shahbazi.

8-10 WRIGHT ST. WESTPORT CT

200 PEQUOT AVE., SOUTHPORT CT

In other parts of Connecticut, commercial lion. “This acquisition fits nicely with our shared real estate is also picking up, especially in the goal of acquiring well-located property where we Stamford area, where many New York compa- meet market demand for space and exercise our nies and other financial firms have a presence. hands-on approach to value creation,” Summit Fairfield Country, where Stamford and principal Felix Charney says of the 5,275-sf Greenwich are located, saw a net office absorp- building that sits on a half-acre parcel adjacent tion of 202,300 sf in late 2014 alone, according to the Westport Metro North train station. In an unrelated transaction, that same comto CBRE/NE research. The Grossman Cos. of Quincy have munity also welcomed another Bay State investor embraced the southern Connecticut CRE mar- in Marcus Partners, a firm focused on value-add ket, having bought several buildings there for opportunities that purchased 8-10 Wright St. last various programs, including a number in which continued on page 119 they have invested along with a local operator, Summit Development. Since 2008, the tandem has spent more than $46 million on various assets in the area, including $2.35 million spent a year ago on 200 Pequot Ave. in Southport, a 12,700-sf office building that was 43 percent leased when purchased. “It has a nice exterior, but the inside was a little run down, and that needed to be taken care of,” says Co-President Jacob M. Grossman, who credits a loan from Washington Trust Co. for providing the needed monies to accomplish that goal. A 3,000-sf lease to a hedge fund was subsequently secured for the building. It was purchased on behalf of the Grossman Cos. “Main Street” portfolio that targets assets bearing highly visible locations throwing off stable income and promising long-term rent growth potential. The sole broker in the deal was Vidal/Wettenstein LLC principal Robert Lewis. “That was a good outcome for us,” says Grossman, whose firm also landed a 6,000-sf retail building in Westport considered a longterm investment as well. Done in partnership with Summit and as part of the Main Street platform, 60 Charles St. was purchased for $2.7 mil- 100 PEARL ST., HARTFORD CT

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Associates LLC. “Middletown multifamily assets have a history of positive rent growth and value appreciation that outpaces those in most other regional markets,” Witten says in a press release issued upon the closing on Hunters Crossing, a property in the city’s Westlake District. More recently, IPA has worked with TGM Associates on a pair of deals in which the investor acquired 323 units in Stamford from AvalonBay and harvested 135 units in Danbury known as TGM Willow Grove, that $27.5 million agreement also involving IPA Senior Associates Adam Mancinone and CORNERSTONE AT BEDFORD, STAMFORD CT Blake Barbarisi. Beachwold Residential is the new owner of a complex that ADAM MANCINONE “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 (City) locations,” Nolletti says in a release. BLAKE BARBARISI Witten provided a yearend 2014 market overview in which he indicates conditions appear solid for continued appreciation of apartment values, especially in hot areas such as southern Connecticut where HUNTERS CROSSING, MIDDLETOWN CT demand still outstrips supply despite a doubling of new units under construction in the region, mary markets such as Boston and New York 1,500 of which were delivered in 2014 while City, making New Haven and Fairfield Counties another 1,000 are in the pipeline, IPA research especially busy, so much so that Cawley and shows. Costly single-family housing and eco- Matthew Cawley are both handling listings in nomic improvements have occupancies on the the area. “People are chasing the eight or nine rise, Witten explains in the report. The activity percent yields you can’t find in Boston or New has caught the attention of local investors as York anymore,” Cawley observes. “That has well as foreign and institutional capital that really dried up because people aren’t going to Witten says are focused on best-in-class prod- sell unless they get a good price.” From working the region, Richard Cawley uct over 250 units in such hotspots as Stamford. United Multi Family is expanding its reach to says the higher capitalization rates can be found sate investor appetite, with principal Richard in communities only now emerging from the linCawley telling Real Reporter that the activity is gering 2008 recession that has taken longer to being spurred by groups being driven out of pri- ebb than other parts of the Northeast, including

Bridgeport and Hartford. Witten says in his overview that assets near transit stations and employment centers are feeding off the popularity of urban living, and adds that financing is further enhancing multifamily trades, citing certain lenders willing to provide upwards of 80 percent LTV. Another multifamily sale involving 199 of 228 units in a condominium at 720-760 Mix Ave. in Hamden brought $23.3 million. Steve Pappas of Chozick Realty advised the seller, Sutton Mix Ave. LLC and procured the buyer, Sutton Views LLC in that fourth-quarter transaction. u

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autumn for $16.3 million as its inaugural conquest for a new $250 million investment fund, Marcus Capital Partners Fund II. The 84,000 sf of office space in the buildings are considered “a classic situation where the existing property is substantially underutilizing its special place within a community,” Marcus Partners principal David Fiore says of the assets that are undergoing a $4 million overhaul to alter that situation. Among the changes being made are incorporation of enlarged windows to take advantage of panoramic views. Elevators, lobbies and restrooms are also being improved, as are entrances, lighting, parking decks and signage, with modern mechanical systems being installed as well. “When the transformation is complete, we expect 8 and 10 Wright St. will set the standard for excellence in office properties within the Westport community,” says Fiore, who runs the New York Metro office from Norwalk, CT, from which the firm manages or owns more than 3 million sf in the immediate

60 CHARLES ST., WESTPORT CT

area. “We have invested in this thriving part of the country for more than 20 years, and we look forward to further investments in the near future as we progress with our new Fund II,” CEO Paul Marcus says of the Westport deal. H. Gary Gabriel of Cushman & Wakefield advised Marcus Partners on the transaction

along with colleagues David Bernhaut, Andy Merin and Tom O’Leary, while O’Leary will oversee leasing duties at the buildings on a team that includes Steve Baker and Adam Klimek. The structures that date to 1977 last changed hands in 2007 when they sold for $32.2 million, nearly twice the cost of entry for Marcus Partners. u

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vacancies stand at about 15.6 percent, depending on the survey. Meanwhile, the industrial property market is tightening in sectors around the state—and now there has even been a flurry of major deals and development projects that add to a growing confidence Rhode Island is no longer one of the economically poorest performing states in the country. “The market is a lot healthier than a lot of people believe,” maintains Alden Anderson, a Providence-based Senior VP and partner at CBRE, the giant commercial real estate company which has a longstanding presence in the state. “Things have slowly been improving.” One of the most encouraging pieces of news for Rhode Island, and for Providence in particular, is the $200-million South Street Landing redevelopment project at 360 Eddy St. where Brown ANDY KUSHNER University, the University of Rhode Island and Rhode Island College eventually plan to take up space at the long-abandoned South Street Power Station. Last October, academic, business and political leaders gathered for a groundbreaking ceremony marking the start of Commonwealth Venture’s ambitious redevelopment of the site. Meanwhile, the $20-million redevelopment of another downtown Providence property, the old Providence Gas site at 100 Dorrance St., is also taking shape. Known as the “Providence G” building, the mixed-used project ultimately will have 56 apartments, restaurants, retail and other amenities; the first restaurant opened early last year and the apartments are already being heavily marMICHAEL MILANO keted. Vince Geoffrey is site owner and the main developer David Corsetti. The recovery is not limited to Rhode Island’s capital city. Economic activity is also picking up just south in Warwick near T.F. Green Airport, and to Providence’s northern tier in the Lincoln area, industry officials say. The bottom line: Rhode Island is not exactly booming, but it is definitely no longer scraping bottom. Far from it. Here’s a look at some of the subsectors within the state’s commercial real estate market:

OFFICES As Providence’s office market has rebounded, so have Rhode Island’s suburbs. According to CBRE, the latter arena ended 2014 with 121,400 sf of net positive absorption and an overall vacancy rate of 18 percent, the lowest since 2007. In the past three years, there has been approximately 306,000 sf of net positive absorption. Of its total 8.3 million sf, there is still about 1.5 million sf of available office space in suburban Rhode Island. Theoretically, that is clearly too much available space to support bold new office developments or spur a lot of office building exchanges. But it is not deterring Michael Integlia & Co., which late last year unveiled an ambitious $50-million mixed-used development which would include offices combined with apartments and shops in downtown Warwick.

HOTEL VIKING, NEWPORT RI

380 JEFFERSON BLVD., WARWICK RI

The sponsor has already begun clearing land for development. Though Providence’s numbers are stronger, there is also not a heavy amount of wheeling and dealing going on in the city, though CBRE’s Anderson says there are “a lot of pending deals” about to pop in 2015 and beyond. Karl Sherry, a partner at Cushman & Wakefield alliance member Hayes & Sherry, says first-class rents in Providence are running between $25 and $35 per sf while Class B space is going for $18 to $24 per sf. Rental rates need to rise to about $45 per sf for Class A space to justify new construction, he says. Sherry adds that Class B space is tightening, partly because some older buildings are being converted into mixed-used residential and retail complexes. One powerful symbol that Providence’s office market has not recovered: Its iconic “Superman GEORGE PASKALIS Building” remains empty after Bank of America vacated in 2013. The structure previously served as headquarters of Fleet Bank before that institution was purchased by Bank of America early last decade. Despite that prominent disappointment, Laurel Bowerman, Senior VP for commercial real estate at Washington Trust Co., says the office market statewide has “definitely become more positive,” especially considering the severity of Rhode Island’s economic downturn after a run of prosperity prior to 2008. Hearkening back to those days, Bowerman says there are a lot of “percolating” deals that will probably become evident soon. One subset, medical office space, continues

to be a hot property type throughout New England, a trend evident in the $3.2 million purchase of a 31,500-sf facility at 390 Tollgate Rd. in Warwick last autumn. Buyer BEM Realty TR was advised by Thomas Sullivan of Commercial Realty Advisors on a listing handled for the seller by RE/Max Commercial professionals Andy Kushner and Michael Milano. A dozen healthrelated tenants occupy the building including Bayside Endocrinology, Kent Cardiology and King Opticians.

INDUSTRIAL Bowerman further says Rhode Island’s industrial market is facing a dilemma: On one hand, the market is tightening, but on the other no one is moving forward with speculative projects. And she is definitely right about the industrial market picking up, according to CBRE research showing 2014 ending with a vacancy of 7.8 percent, down from 9 percent at year-end 2013. There was over 618,000 sf of net industrial positive absorption in 2014, the survey further revealed. The total industrial market increased slightly in size with buildings from other market categories being reclassified to industrial for an additional 299,600 sf to bring total RI industrial space to 52.5 million sf, according to CBRE data. The improving health of the industrial market is creating challenges, market professionals indicate. “In 2014, much of the deal velocity came from existing manufacturing companies looking for strong infrastructure and updated industrial space,” the CBRE research conveys, adding, “This dynamic continues to be a problem with a tightening market producing fewer and fewer options. A 2014 example was George continued on page 121

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Patton Associates who leased 384,000 sf of warehouse in Fall River, MA, after futilely searching in Rhode Island for a suitable option.” Then again, Rhode Island is also winning its share of business from Massachusetts. Last year, major food supplier GreenCore Plc announced it was investing millions of dollars to build a new sandwich-making plant in Quonset where the Dublinbased firm pledges to eventually employ about 370 people. Later this year, GreenCore is expected to KARL SHERRY consolidate its Brockton and Newburyport MA operations into the new Rhode Island facility. According to MG Commercial Real Estate, there were a number of other major industrial 390 TOLLGATE RD., WARWICK RI lease deals last year in Rhode Island, including: VPI Inc. signing a long-term commitment for 112,000 sf at 100 Higginson Ave. in Lincoln, also known as the Collyer Wire facility. Hope Valley Industries of Exeter, a manufacturer and distributor of all-weather automotive accessories, is leasing 120,000 sf at 13 Powder Hill Rd. in Lincoln. Both deals occurred in the first half of 2014. “Last year was great and I’m convinced 2015 is going to be another good year,” says MG Commercial President Michael Giuttari. MG Commercial brokers George Paskalis, SIOR, and Larry Steingold were exclusive agents in the purchase of 5 Industrial Rd. in ONE POWDER HILL RD., LINCOLN RIONE POWDER HILL RD., LINCOLN RI Cumberland by Okonite, which paid $10.7 million shade under a respectable 70 percent. The averfor the 248,000-sf facility age daily room rate was up 4.6 percent to LARRY STEINGOLD now undergoing extensive $145, while revenue per available room renovations to accommodate the wire and cable (revPAR) was up 4 percent to $97. In all, the continued from page 87 manufacturing firm that hails from New Jersey. revenue at Providence’s 10 main hotels, totaling says of the prior campaign and adding 2015 has The structure is located on 13.2 acres in the 2,347 rooms, was up by 6.3 percent last year, been eventful in multiple markets with investors Cumberland Industrial Park at Exit 11 of according to the Providence-Warwick willing to consider tertiary locations. Like many CRE brokers this past year, C&W’s Convention and Visitors Bureau. Interstate 295. In other Rhode Island hotel markets, occu- biggest commitment of 2014 was not finalized A separate industrial sale in Lincoln resulted in 1 Powder Hill Rd. changing hands for $8.2 pancy and room rates are slowly recovering, but until the New Year, that being the $270 million million. It is a 104,550-sf facility, while another are doing particularly well in the tourist-mecca exchange in Cambridge’s Alewife District of the agreement resulted in 380 Jefferson Blvd. in Newport and airport-influenced Warwick areas, Atmark, a newly constructed luxury apartment Warwick trading at a consideration of $3.25 says Martha Sheridan, president and chief exec- property developed by O’Connor Capital utive of the bureau. “Providence and Rhode Partners. As for 2014, the Maxwell Green listing million. Island are doing well, but we’d always like to see was a big one and was handled by Byrne along HOTELS more,” she says. One beneficiary of the recover- with the Capital Markets team of Robert E. One of the shining examples of a recovering ing sector was LaSalle Hotel Properties, which in Griffin Jr., Edward C. Maher Jr. and Matthew E. hotel industry in Providence—not to mention late summer reaped $77 million from the trade Pullen. Later in the year, multifamily specialist an example of one of the more dramatic trans- of Newport’s Hotel Viking, an inn it had secured Andrew Herald joined the operation. Other deals among a half-dozen trades comformations of any property anywhere in New for a mere $27 million in June 1999. The improving dynamics are reportedly pleted was $22.6 million for Richmond Vista at England—came with the opening last year of the new 52-room boutique Dean Hotel in a tempting some developers to invest in new con- Manchester, NH, a 206-unit apartment commucompletely renovated building at 122 Fountain struction or renovate older buildings into rooms, nity developed and harvested by the same sellSt.. So what is the big deal? It used to be a flop- particularly near Providence’s convention center er of the Wakefield Apartments through BRA house and, until recently, a strip club. And, yes, and along the city’s riverfront. Julia Anne M. and JLL mentioned earlier. The C&W team was it has already been dubbed “Providence’s sexi- Slom, Senior VP at Washington Trust, says she also broker of 319A St. in Boston’s Fort Point knows of one possible renovation project about Channel, a former warehouse being developed est new hotel.” The $7-million project to rehab the century- to come to fruition, though she declined to give into residential after its $12.5 million exchange, old building was undertaken by ASH NYC, details. “Hospitality is a strong product in Rhode plus 6.4 acres of land in South Boston that brought $13.3 million in advance of a similar owned by Providence native Ari Heckman, in Island,” says Slom. But a challenge is that corporate demand in strategy by the buyer of 501-511 Dorchester collaboration with “artist-entrepreneur” Clay Rockefeller, founder of Providence arts nonprof- Rhode Island, unlike leisure travel, has not fully Ave., David J. Pogorelc, whose purchase was it The Steel Yard. The much-welcomed renova- recovered from the 2008 crash, limiting devel- backed by $7.2 million from Webster Five Cents tion was made partly possible by a recovering opment and purchase-sale activities, industry Savings Bank. Byrne did not respond to inquiries u regarding his firm’s 2014 assignments. u hotel market downtown where occupancy ran a sources say.

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realign its debt portfolio and take advantage of the favorable financing climate. As previously detailed in various Real Reporter million dollar lending and sales transactions, loans included $16.2 million in early May on 10 properties the multifamily investor controls in Boston, Brookline and Cambridge. The largest amount was $4.0 million for 18-26 Chauncy St. in Cambridge, while another $3.93 million was backed by Brookline assets at 50-54 Alton Pl. and 70-86 St. Paul St. Another $2.43 million was provided for 1-3 Langdon St. in Cambridge; $2.31 million on 1539 Beacon St. and 17-23 Fairbanks St. in Brookline; plus $1.84 million for 37-41 Auburn St. and 34-38 Harris St. in Brookline. Another $1.71 million went for 111-115 Kilsyth Rd. and 77 Lanark Rd., both in Boston’s Brighton district. ERNIE KATAI Two months later, Berkadia refinanced Chestnut Hill Realty’s Hampton Court Apartments in Brookline with a $14.2 million loan, also from Freddie Mac. The 115-yearold structure totaling 51,025 f contains 68 apartROBERT LIPSON ments and cash-flowing retail in the front. Berkadia and Chestnut Hill Realty have a longstanding relationship, including more than $100 million loaned the borrower this decade alone for assets in Massachusetts and Rhode Island. But it goes back much deeper than that, according to CHR President Peter F. Poras, citing a relationship that extends back 20 years when the entity was GMAC Commercial Mortgage before being rolled into Capmark Finance; it was that national entity which Berkshire Hathaway and Leucadia took over

HAMPTON COURT APARTMENTS, BROOKLINE MA

UNIVERSITY TOWERS, NEW HAVEN CT

when the residential mortgage market cratered in 2008. By Poras’ estimates, CHR has borrowed over $1 billion from Berkadia and its predecessors with Freddie Mac being the primary correspondent financing the loans. “They are dependable and experienced and they deliver what they say,” Poras tells Real

Reporter in explaining CHR’s loyalty towards the company while also crediting Freddie Mac for its ongoing support. “They are both good for us, and I think all three have benefitted from a very productive relationship.” Robert Lipson out of Berkadia’s New Jersey office has been CHR’s continued on page 125

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price per hotel room at $441,573 with the land parcel’s value in the sale harder to quantify. “Everyone looked at it a little differently,” is all Phaneuf would say on the exclusive listing which Northwoods opted to pitch inclusively versus breaking the garage and land parcel into separate components. Observers say Revere’s stature was enhanced by STEFFAN PANZONE the renovation that impacted all areas of the hotel, creating over 28,000 sf of meeting facilities, including a versatile, blankcanvas room known as Space 57, plus Theatre 1, a venue for business conferences, small concerts and movie screenings and The Gallery, described in promotional materials as “an avant –garde meeting floor.” The hotel also has a state-of-theart fitness center, heated indoor pool and multiple lounges and dining areas, among them the Rooftop at Revere and Emerald Lounge, the former a seasonal outdoor bar constructed over the seven-level garage and the latter a second-floor cocktail bar with private event space. For Eastdil, the transaction represented the latest in a series of high profile hotel sales in

REVERE HOTEL, BOSTON MA

Boston this decade, others being the Fairmont Copley Plaza Hotel that sold in 2010 for $98.5 million and the 1,053-room Boston Park Plaza, the so-called “Grande Dame of Boston Hotels” that fetched $250 million from Sunstone Hotel Investors in 2013. Other members of the Eastdil Secured team (which Phaneuf left this spring for a new position at HFF) are Brian Barnett, Peter Joseph, Sarah Lagosh, Molly Padien-Havens and Steffan Panzone. As therealreporter.com

revealed on May 18th, a new listing by Eastdil of the Renaissance Boston Waterfront Hotel in the Seaport District is now under agreement to Rockpoint Group, that asset at 606 Congress St. totaling 450 rooms and 21 suites trading at an anticipated sale price sources peg in the $157 million sphere. Eastdil has a national hospitality machine run from Los Angeles and New York City which works with local capital markets teams on the specialized asset class. u

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ly units, with one expert explaining they typically rent based on bed count rather than unit count. Close proximity to the University of Maine gives Orchard Trails prime access to the 11,000 attending the school annually. With dorms perennially oversubscribed, some years by as many as 200 beds, demand for affordable off-campus housing is only expected to grow there, an element inviting private capital. In a manner strikingly similar to competition among colleges for top students, such housing complexes are caught up in an “arms race” to deliver the most attractive amenities and extras to distinguish their properties from competitors. Orchard Trails offers a free tanning salon, basketball and volleyball courts, clubhouse and game room, fitness-center and outdoor grilling center. Part of the firm’s Capital Markets platform, CBRE/NE’s structured finance group also found success in the student housing market in 2014. In July, First VP John Kelly secured a $3.5 million refinance on behalf of Golden Goose Capital LLC for an 85-bed, 26-unit student housing property at 5-7 Dennison Rd. at the edge of the University of New Hampshire. In a statement describing that assignment, Kelly remarked, “We placed the deal with a CMBS shop that closed the deal in a 30-day timeframe.” Among its attributes, according to CBRE/NE, are a prime position at the southeastern edge of campus as well as being within walking distance of downtown. It also includes 48 parking spaces. “We are pleased to have facilitated this transaction on behalf of GGC, a fast-growing student housing operator who has vastly improved operations at the property,” Kelly says of the client. GGC Chief Operating Officer Barrett Bilotta praises the CBRE/NE multi-housing debt and structured finance team for having “allowed us to market the property to the right set of capital sources and obtain the terms that mirrored our business plan,” adding that “we are pleased with the result to secure long-term, non-recourse debt” at what continues to be historically low interest rates. “This refinance solidifies our long-

ORCHARD TRAILS APARTMENTS, ORONO ME

term strategy to be the premier owner/operator in the New England student housing market,” Bilotta relayed. CBRE/NE’s multifamily brokerage appears poised to continue its success serving the specialized academic market into 2015 as it is handling the exclusive listing for the Arcadia Apartments in Keene. Located in close proximity to the city’s namesake college, the ARCADIA APARTMENTS, KEENE NH 138-bed complex at 120 Emerald St. is projected to experience high and Wal-Mart. Additionally, numerous nightlife demand in the future. Keene State College has and restaurant venues are within walking disan enrollment of nearly 5,500 and only guaran- tance of the apartments. The student housing market has also tees on-campus housing for freshman and sophomores, creating a shortage of housing for received a boost from the general economic about 2,800. Butler and St. John are working recovery as the mainstream residential arena with CBRE/NE principal Roger Dieker on that aims to return to its 2007 peak. Other factors have also been cited for its speedy growth, exclusive. Arcadia Apartments is a recent addition to however, most notably the marked increase in the community; the building was completed in enrollment at secondary education institutions. 2012. It consists of 10 three-bedroom apart- As the number of students attending these ments, and 27 four-bedroom apartments in a institutions continues to outpace on-campus building totaling 39,850 sf. The complex is dorm construction, conditions bode well for close to several shopping centers encompassing industry fundamentals to favor further investu a variety of stores such as CVS, Panera Bread ment, promoters of the market maintain.

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asset at 75 Pearl St. in Reading, since renamed The Residence at Pearl Street. Set on a 4.8-acre site, the facility is a combination of an historic school joined by a new wing of apartments to comprise a total of 85,000 sf. Among the changes planned were to include LCB’s Reflections Memory Care services to the Reading residents. In addition to these deals, C&W’s forays into the national market demonstrate the universality of demand for senior housing. In January, as an advisor to AEW Capital Markets, the C&W team participated in the THE RESIDENCE AT SALEM WOODS, SALEM NH sale of Thunderbird Retirement Resort in Glendale, AZ to ROC Seniors. The C&W press release regarding the note. Thunderbird team, including Richard Swartz, head of C&W’s Retirement Resort is a 345-unit luxury indeSenior Housing Capital Markets team, Debt & pendent and assisted living community, which Structured Finance Managing Director Jay will be managed by Freedom Senior Wagner, Rosenzweig and Associate Stuart Kim, Management. “ROC was quick to recognize the arranged the $21.2 million first mortgage, non- opportunity in this growing market to expand recourse acquisition financing with Grandbridge the care levels of this large community, which Real Estate, a subsidiary of BB&T Real Estate. It will make it a great addition to their portfolio,” is a three-year loan with “competitive econom- Swartz says of the assignment. ic terms and extension options,” according to a The driving factor behind this increase in

senior housing development is expectation of surging demand as the population ages. The senior citizen population is expected to double in the next 30 years, with 20 percent of the US population on pace to be over age 65 by 2030. This massive demographic shift has spurred a sharp uptick in senior housing development, and with demand expected to increase, the trend will most likely continue into 2015, according to Swartz and other market veterans. u

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percent to $195. The surge was propelled by all three key sectors of the travel industry: corporate, group and leisure consumers. Meanwhile, general metropolitan numbers are almost as impressive, with Greater Boston’s hotels hitting an occupancy rate of 77 percent last year; average daily room rates reached $206 and revPAR was $158, according to PKF Consulting USA, an arm of commercial real estate company CBRE. Boston is now considered the fifth best US hotel market, as measured by revPAR, behind only New York, San Francisco, Honolulu and Miami, according to CBRE data. Those numbers and rankings have made the entire Greater Boston market attractive to both investors who want to buy and, to a lesser extent, investors who want to build new hotels here. “We’re in a very healthy market in terms of transactions,” says David McElroy, Senior VP at CBRE in Boston. Last year, the largest hotel deal in the Boston area was the $260 million sale of the Revere Hotel Boston Common, the 356room hotel and 826-space parking garage in Boston’s Theater District. JAMES O’CONNELL Pebblebrook Hotel Trust, a Maryland-based REIT, was the buyer and Northwood Investors, represented by Eastdil Secured, was the seller. Northwood had previously purchased the hotel for $143.5 million in 2010; the recent sale price came out to $731,000 per room (see related story, this section). That deal was larger than the biggest Boston hotel sale of 2013, when the Boston Park Plaza Hotel and Towers was sold for about $250 million, or $237,000 per room, according to PKF Consulting data. That deal was also orchestrated by Eastdil Secured, and first unveiled by Real Reporter, as was the Revere Hotel Boston Common commitment by Pebblebrook. Technically, in Boston’s core downtown, 2013 was better in terms of hotel transactions, with four deals announced at a combined value of $563 million; the deals two years ago also included the sales of the Liberty Hotel ($170 million), Hotel Commonwealth ($79 million) and the Bulfinch Hotel ($12.5 million). In 2014,, Boston’s core market saw three major hotel deals for a combined value of $285 million; the sales also included enVision Hotel Boston ($9.2 million) and Best Western Plus Roundhouse Suites ($16.5 million). Those numbers do not include deals technically closed last year, such as the Fairmont Battery Wharf Hotel’s purchase by a joint venture that included Ontario-based Westmont Hospitality Group, which paid $48.6 million for the 150-room North End hotel, a deal also first unveiled by Real Reporter. That was Westmont’s first foray into the downtown Boston market. The inn is being reflagged as the Battery Wharf Hotel & Spa. Though the number of transactions may have been down in some regional submarkets, the key to last year was the rising ADR and revPAR rates for hotels— and what those numbers ultimately translate into when attracting potential buyers, industry officials say. “We had a record year in 2014,” HFF Managing Director

SHERATON WAKEFIELD AT ONE AUDUBON RD., WAKEFIELD MA

HAMPTON INN BRAINTREE, BRAINTREE MA

Denny Meikleham says of national sale and debt transactions in general, not just in Boston. Moving forward, he says he is “very bullish about 2015,” based on preliminary transaction listings. “It could be a banner year in New England,” the industry veteran says. But it is not just a thriving travel business pushing up hotel ADR and revPAR numbers in the Boston area, Meikleham and others note. The region actually has a shortage of hotel rooms that is pushing up prices amid strong demand from all types of travelers. The Greater Boston hotel market has about 55,000 hotel rooms, while the core Boston-Cambridge market claims some 22,000 of those units. That is considered low for a market the size and health of Boston, industry officials say and why the pace of hotel development is starting to pick up in the region. As of late February, there were at least a dozen hotels, with nearly 2,300 rooms, in various stages of development in Boston. Hotels expected to open in Boston this year include Autograph Collection Envoy Hotel at 66 Sleeper St., with 136 rooms; Hilton Garden Inn Boston Logan Airport at 415 McClellan Hwy., with 177 rooms; the Godfrey Hotel Boston at 59 Temple Pl., with 242 rooms; and Hotel Commonwealth’s additional 96 rooms at 500 Commonwealth Ave. Hotels expected to open in 2016 include the aloft Hotel @ Convention Center at 371-401 D St. (330 rooms); element Hotel @ Convention Center 371-401 D St. (180 rooms); Melnea Hotel at Melnea Cass Boulevard and Tremont Street (145 rooms); and Courtyard by Marriot Boston Downtown North End at Causeway and Beverly streets (210 rooms). Other new city hotels in the distant pipeline include Trinity Stuart Hotel Residence at 40 Trinity Pl. (227 rooms); Haymarket Hotel at

North and Hanover streets (225 rooms) and, of course, the new Four Seasons Hotel in the Back Bay near the Christian Science complex. Though most investors would still prefer to buy existing operations than invest in new hotels, Meikleham says hotel development is “back big time” despite all the obstacles to building in the Boston area, including the lack of affordable land. But it is not just the core Boston-Cambridge markets that is faring well. O’Connell says the suburban market is also doing fine, particularly the area that he covers in the northeast suburban market. The $14 million sale of the 280room Sheraton Hotel in Wakefield closed in 2014 (with a required $5 million buyer upgrade), he notes. O’Connell Hospitality represented the seller, Wells Fargo Bank and Eastern Bank; the buyer was Jamsan Hotel Management of Lexington. In Braintree, O’Connell Hospitality represented the seller, Magna Hospitality Group of Rhode Island, in its sale of the 104-room Hampton Inn for $14 million (plus a required $2.5 million upgrade) to Carey Watermark of Illinois. The hotel-industry recovery is expanding to other parts of New England, not just the Boston area inside the Route 128 corridor, O’Connell notes. Stretching as far north as Vermont, O’Connell Hospitality last year represented the seller, LinChris Hospitality of Hanover in its $16 million sale of the 170-room Hampton Inn Burlington to a joint-venture partnership between StepStone Hospitality of Rhode Island and Garrison Investment Group in New York. Back in the eastern Massachusetts market, other suburban hotel transactions last year included: continued on page 125

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• The $29.3 million purchase by IHP Medford Owner LLC, managed by Chatham Lodging Trust of Palm Beach, of the 157-room Hyatt Place Boston at 116 Riverside Rd. in Medford. The seller was IA Urban Hotels Medford LLC, managed by Scott Wilton. The property last sold for $16.7 million in May 2000. • The $10.6 million purchase of the Residence Inn Boston North Shore in Danvers by BRE Newton Hotels Property Owner LLC, managed by Blackstone Real Estate Partners, from Lion ES Hotels Holdings LLC, managed by Clarion Partners in Dallas. The property at 51 Newbury St. last sold for $6.4 million in August 1989. • The $10.7 million purchase of the 127room Holiday Inn Rockland by Rockland TBL Investment Group LLC, managed by Linchris Hotel Corp., from Rockland Hospitality Realty THE 157-ROOM HYATT PLACE BOSTON IN MEDFORD BROUGHT $29.3 MILLION IN ITS 2014 SALE. LLC, care of CrossHarbor Capital Partners. The property at 929 Hingham St. in Rockland last sold for $5.1 million in July 2008. • The $8 million purchase of the Best Western Adams Inn in Quincy by Giri Quincy LLC, managed by Ashish Sangani, from 29 Hancock Street LLC, managed by Sean W. Galvin. The property at 29 Hancock St. and 39 Densmore St. in Quincy last sold for $1.3 million in August 1994. • The $4.6 million purchase of Towneplace Suites in Tewksbury by Tewkstps LLC, managed by Steven J. Fairbanks and Richard Vilardo, Palm Beach (c/o Pinnacle Hotel Management), from Moody National TPS Tewksbury S LLC, managed by Robert Engel and Brett Moody in Houston. The property at 20 International Pl. last sold for $4.4 million in May 2007. • The $3.8 million purchase of the Comfort Inn Cape Cod in Hyannis by Cape Cod Hotel LLC, LINCHRIS HOTEL CORP. OF HANOVER ACQUIRED THE 127-ROOM HOLIDAY INN ROCKLAND FOR $10.7 MILmanaged by Dipak J. Patel, Gaurangkumar A. LION FROM CROSSHARBOR CAPITAL PARTNERS. Patel and Sanjaykimar D. Patel, from KGS Hyannis Hotel LLC, managed by Michael Sullivan. Meikleham of resort properties attracting The property at 1470 Iyannough Rd. (Route 132) investor interest. last sold for $2,186,000 in Jan. 1999. But the investment appetite for resort • O’Connell says he sees no reason why hotels, like all other types of hotels, is mostly continued from page 122 suburban hotels should not continue to prosper limited to existing facilities; there isn’t a lot of production conduit over the years, but the comin 2015, at least in terms of higher occupancy interest in investing in new resort develop- pany also counts head of production Ernest and room rates. Whether the actual values of ments, Meikleham says. Katai and Warren Higgins, who leads the morthotels substantially increases is another matter, Another area that was strong last year – gage banking operations, as other key profeshe says. and is expected to stay robust through 2015 – sionals assisting his company over the years. According to Pinnacle Advisory Group, the is debt re-financings by hotel owners amidst Yet another deal orchestrated last year in occupancy rate for suburban hotels within the I- historically low interest rates. Hundreds of mil- New England was led by Berkadia Assistant VP 495 corridor was 69.5 percent last year, up from lions of dollars in re-financings have occurred in Anthony Golebiewski, that $11.9 million for the 68 percent in 2013. Average daily room rates recent years in the region, a trend expected to University Towers at 100 York St. in New Haven, increased by 5 percent to $121, considered a continue in 2015, industry officials say. CT. University Towers is a 238-unit high-rise strong number for the suburbs. Pinnacle Advisory Group Vice President owned by University Towers Owners Corp., One thing O’Connell says he is closely mon- Sebastian Colella maintains the Boston market recipient of the three-year, floating rate loan itoring is the number of proposed new hotels in is poised for more hotel development in 2015 Berkadia secured from C-III Capital Partners. the area. A dramatic increase in rooms could and well beyond with a potential of 8,600 addi“We identified a lender who understood the conceivably harm existing hotels’ business, but tional rooms stretching into the distant future— client’s priorities and worked to arrange a he says he does not see that as a major threat and hardscrabble communities such as Chelsea unique, flexible loan structure that helped in 2015. and Revere could be the biggest beneficiaries of address both near- and long-term goals,” “You’re seeing more supply coming into the such new facilities due to close proximity to Golebiewski said of that instrument which has a pipeline,” he says. “We feel it’s still a year or downtown Boston. The hotel industry could see 4.8 percent interest rate and I/O payments. two away. It will affect existing hotels eventual- an even bigger surge in new hotels if Boston is Critically, the borrower also got an ability to ly, but not this year.” designated by the International Olympics as host refinance existing debt on the asset while allowAnother encouraging sign in the hotel city for the 2024 Summer Olympics, he notes. ing future loan draws above the initial funding industry, both in the US and in New England, The bottom line, says industry veteran to facilitate a capital improvements program at has been the increased interest by investors in McElroy, is that 2015 is shaping up to be the building which dates to 1958. Among those resort properties, which are often considered another strong year for the hotel industry, in impressed was University Towers property manriskier bets because they rely more heavily on Boston and across the region. “It will be a good ager Kate Bowman, who said in the press leisure travel and discretionary spending, not time to buy, sell and develop in New England,” release that Berkadia’s “commitment to their business and group travel. “That’s sort of the says the broker who is active throughout New clients is unparalleled, and we look forward to last one in the hotel food chain,” says England. u working with them again in the future.” u

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Edward C. Maher Jr. along with Pullen. Ten Post Office Square is home to several premier tenants including Arrowstreet Architects, Boston Private Bank & Trust Co., Leggat McCall Properties and the Real Reporter. In assessing Synergy’s meteoric rise in a competitive market, Pullen points to a hands-on approach and its founder’s ability to understand complex real estate trends and crunch numbers. That acumen is not always a strong suit for investors especially on debt plays as was executed to begin 2014 when Synergy secured 10 Milk St. in downtown from its overwrought management through assuming a defaulted $58 million loan held by its securitized lender. “That is a real skill,” JAMES F. GRADY Pullen says of a maneuver savvy local groups such as the Davis Cos. have used to their advantage, 24 Farnsworth St. in the Seaport one recent instance for that firm which bought the $13.3 million loan in 2012 then took over the KEVIN KILEY building and sold it this past January to the Unitarian Universalist Association at a price of $25.4 million. At 10 Milk St., Synergy spent approximately $252 per sf to gain control, well below the $350-per-sf and up similar properties have been yielding. JLL this past month finalized the $18.2 million sale of One Milk St., that equating to an impressive $475 per sf. “This was a complex transaction that took months of focus, discipline and perseverance to complete,” Director of Investments Maura Griffith Moffatt reported of 10 Milk St. after its conclusion and relaying that the firm sees “excellent opportunities as these

TEN MILK ST., BOSTON MA

141 PORTLAND ST., BOSTON MA

complex loans dating to before the recent recession continue to mature.” JLL Managing Director Frank F. Petz is anoth-

“

This was a complex transaction that took months of focus, discipline and perseverance to complete.

”

MAURA GRIFFITH MOFFATT on Synergy’s loan assumption at 10 Milk St. Boston

er fan of Synergy and its founder, and not only as a fellow expert on debt and structured finance matters. “Dave (Greaney) is the poster child for monetizing some nice gains he earned by having the guts to buy early when everybody else was running away.” says Petz, his team delivering

$327 per sf in the sale of 4 Liberty Sq., part of that operation’s specialty trading well-located Boston office buildings in the middle market range, often high-end Class B product. Regarding Ten Post Office Sq., Petz says Greaney is “upping his game in a big way” in pairing with New York based GreenOak, a past investor with Synergy in eight different endeavors. “Dave has really gone from an entrepreneurial player to an institutional investor,” says Petz. “And that is a great combination because he still has his entrepreneurial skills but now he is working with some of the largest capital groups in the country on some very big assets.” Pullen says Synergy has also assembled a core of “absolute professionals” to keep up with the expanded portfolio, among them real estate attorney Moffatt, leasing director James F. Grady and finance whiz Brian Crosse, who hails there by way of Ireland and such stateside firms as Delaware North. They have been joined over the past year by Pam Adamian and Chad J. Boulay. A 25-year industry veteran, Adamian arrived in November after time with TA Associates Realty and most recently New Boston Fund where she oversaw a portfolio of four million sf. “Pam brings a wealth of experience to the team, and will significantly increase Synergy’s overall asset management capabilities,” Moffatt said in a press release issued to announce Adamian’s hiring, adding “her addition is a testament to our ability to attract high-caliber leaders to the firm.” Chad J. Boulay also was responsible for about four million sf at HallKeen Management before being hired this winter, with prior stops for him including Equity Industrial Partners, Tishman Speyer (One Federal St., Boston) and Wellesley continued on page 127

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Management. “When I first came in, Dave gave me very clear and explicit instructions, and that was to make this the best property management group in the city of Boston,” Boulay said at the time when 31 buildings and 3.5 million sf was in the portfolio. Other group leaders on the Synergy squad include Director of Asset Management Matthew Godoff and Director of Construction Kevin Kiley. PAM ADAMIAN “They are very capable in every way” of taking on Ten Post Office Sq., Pullen relays in pointing to the nearby 2 Oliver St. that has 225,650 sf and improved to 90 percent occupancy since the investor paid $52 million in Dec. 2012. That asset CHAD J. BOULAY also acquired via C&W is now on the market for sale listed by them, as therealreporter.com unveiled in early April. Greaney has kept plenty of brokerage shops busy over the years, and 2014 was no exception. DTZ was on the case in North Station as KS Partners paid $7.2 million to buy 141 Portland St., a three-story, 22,650-office building that the new owner has since filled. David J. Pergola and Brian R. Doherty run DTZ’s Capital Markets platform. The JLL crew marketing 4 Liberty Sq. included Petz, Managing Director Jessica Hughes and Vice President Robert Borden. It closed in early August versus mid-September on 141 Portland St. That property was acquired in Feb. 2006 for $3.5 million, less than half what it brought from KS Partners.

NECCO STREET GARAGE, BOSTON

A major Synergy deal cemented in 2014 that closed in late January of this year through HFF involved 27 School St. (62,425 sf) and 141 Tremont St. (68,650 sf) going to a Japanese investor. Nippon Telegraph and Telephone (NTT) doled out $48 million compared to the $27 million the seller had spent in July 2007. HFF Capital Markets member Benjamin Sayles explains his firm’s global outreach that has a special yen for Asian capital introduced NTT to the Boston arena and to Synergy’s assets that were almost completely filled when exchanged. The investors coveted the tenancy, location and views, Sayles told Real Reporter after the group that included Senior Managing Director Coleman Benedict and Patrick McAneny closed on the package, the all-cash commitment of which was originally detailed in early January by Real Reporter. HFF Senior Managing Director Riaz A. Cassum runs the firm’s global initiative and helped source the acquisition. u

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As the half-billion dollars doled out since the recession attests, Hamilton Co. was much busier buying through 2013, a year that it paid $52 million for apartments at Douglas Park in the South End. The firm was willing to pay the price whenever doing so was deemed worthy, as they did in Oct. 2009 outpacing a stable of national suitors to win Dexter Park in Brookline, a 409-unit high-rise on the edge of Boston near Fenway Park and the Longwood Medical Area. Hamilton’s bravado rocked the market in aggressive pricing and having beaten out the institutional set for a property many coveted, and Valeri says there has been no hard swallowing since in committing more than a quarter of its capital outlay to the nine-story structure that dates to 1972. “We couldn’t be happier,” he reports. “It is well-constructed and extremely well-located.” They knew that going in, he explains, crediting the firm’s longevity and insular focus of activity inside Route 128 for being fully aware of Dexter Park’s mettle when put on the block through CBRE/NE multifamily team Simon J. Butler and Biria St. John. As usual, New England’s top multifamily team did bring together a global lineup of prospects but they were supplanted by the company whose headquarters is barely a mile away. Today, Dexter Park’s net operating income is up dramatically, Valeri says, and occupancy remains in the high 90 percent range while urban multifamily is a darling among

1085 BOYLSTON ST., BOSTON MA (RENDERING)

investors everywhere, enhancing its future value. On the multifamily development stage, Hamilton intends to concentrate on the middle arena where “they aren’t making any more” product, especially in the upper range of that class. Valeri maintains “people won’t want to pay $3,000 a month for an apartment,” fretting that could bloat vacancies on the luxury front, a class where there does appear to be a surge in construction and Valeri claims some owners are offering free rent and other concessions, a nettlesome sign if true. “That has kept us a little more bridled,” Valeri accedes of the acquisition appetite, and he speaks of more than a few listings where Hamilton determined the anticipated target allocation to be unreasonable “and in those cases,

we chose not to participate” in the bidding process. “When it starts to get like this, the best idea is to keep your powder dry and sit back for the right opportunity to come your way,” he says. Development is another avenue, he says, and Valeri maintains the efforts are in line with civic efforts to increase housing, especially in the middle market. The Fenway venture is taking that a step further; rents in the $2,000 per month range are well below comparable product and Hamilton is donating revenues from the development to a charitable trust for several community organizations. Being erected on a parking lot, the six-story building will have all one-bedroom apartments averaging 600 sf and spaces for 18 vehicles on the site bought in 2011 for $2.6 million from Richard Cohen. u

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for state agencies supported by view floors filled by private tenants. The Capital Markets team in that deal was aided by Colliers Chairman Thomas J. Hynes Jr., plus leasing expert Kristin Blount and Lauren Vecchione. Colliers also picked up owner John Henry’s high-profile Boston Globe site in Dorchester last year and had it under agreement until the buyer’s equity partner inexplicably got cold feet near closing, leading to yet another round that is near the selection stage. Pricing in the initial round topped out at $70 million. Deals the Colliers team did get wholly finished in 2014 ranged from a new Big Y Supermarket in Gardner harvested for developer Donald R. Irving at a consideration of $14.4 KRISTIN BLOUNT million plus the group was involved in a unique twostate flip of flex/industrial buildings on behalf of Campanelli (see story, this publication). The 170,000 sf yielded $21.3 million, one of them a Chelmsford 40 LANSDOWNE ST., CAMBRIDGE MA office building at 25 LAUREN VECCHIONE Industrial Rd. the client had was praised by Jacoby for its upkeep and effiacquired earlier in the year in a portfolio pur- cient layout plus a two-story atrium lobby prochase that Campanelli handled involving viding a flair to the asset. All told, the Dragos and Jacoby campaign 300,000 sf in Acton and Chelmsford. Investor George K. Tonna was the winning last year came to $162.5 million of closings suitor of a Colliers exclusive at One Cabot Rd. in involving 23 deals and 25 buildings with 100 Hudson, a gleaming 65,575-sf office building Cambridge St. counting for them as a 2015 sale. on 10.4 acres adjacent to the buyer’s Two Cabot As to his group’s new home, Jacoby says “we Rd., that a flex/industrial building encompass- are extremely excited to join Colliers and grow ing close to 150,000 sf on 18 acres owned its investment sales practice.” While expressing affection for the NAI/Hunneman stint which since Aug. 2010. “It’s a nice purchase for him,” Jacoby says began in 2012 following a period at Newmark after advising Conroy Development principal Grubb Knight Frank, the broker who along with Terence W. Conroy Jr. on One Cabot Rd., which Dragos have 35 years of experience between is in the Hudson Business Park. Conroy had pre- them relays they were drawn to Colliers by its viously last summer traded 14 acres there to “full-service platform, deep bench strength and residential builder Robert Moss in a separate state-of-the-art infrastructure” and seconds $4.2 million transaction. “I think it worked out Douvadjian’s contention that “a successful well for everybody,” says Jacoby of the office investment sales strategy draws upon the building exchange detailed by Real Reporter in knowledge of debt and equity market forces.” Douvadjian was unavailable for comment early November after its closing that was fueled by $2.64 million from Spencer Savings Bank. regarding specific assignments, but the debt and One Cabot Rd. was 25 years old when sold and structured finance operation did provide RAM

GRANADA HIGHLANDS, MALDEN MA

Management the monies to buy 25 Industrial Rd. and 267 Lowell Rd. in Hudson, NH that was listed by the Colliers sales unit after they convinced Campanelli it would lead to better pricing. The Colliers debt and structured finance team had plenty of other business to ply in 2014 to serve borrower needs from construction and mezzanine debt to funds for refinancing and repositionings. A whopping $175 million was delivered to Metropolitan Properties of America by Colliers Senior VP John Broderick and Co-Chairman Kevin Phelan from JPMorgan Chase Bank. The proceeds are being employed for various purposes, including continued upgrades to the 910-unit, 41-acre complex MPA bought in July 2007 for $140.6 million. “We were paying off existing debt, funding renovation dollars to complete the last third of the unit renovations, and were in need of new construction dollars to expand the asset with two new buildings and 236 additional units,” Broderick outlined at the time of the agreement which was detailed by Real Reporter last October. In that article, Broderick called JPMorgan “top notch and efficient” in the complicated financing that will give Granada Highlands a business center, fitness facility and media room along with manicured grounds and recreation areas such as basketball and tennis courts and a “resort style” pool featuring cabanas. “There were many moving pieces in this deal,” he said in calling the loan “the final step” in stabilizing the hillside asset that was developed in the 1970s by the late Thomas J. Flatley. On another hefty loan request, Broderick worked with Credit Analyst Jeannette Ambrosio to arrange $98 million for construction of a new mixed-use property underway in Waltham by Northland Investment Corp. The Newton based shop is creating 269 transit-oriented apartments, 27,600-sf of retail and a 300-vehicle underground garage plus 92 surface spaces on 4.5 acres known collectively as Moody & Main in reference to the intersection in the heart of continued on page 129

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given its prime location and strong local sponsorship,” Broderick said of that loan made by PCCP LLC, a full-service real estate investment firm and lender which offered the best terms, having “recognized the many strengths of the development” and structured a deal “that met Northland’s needs.” 60 CODMAN RD., BOXBOROUGH MA Northland President Steven P. Rosenthal and CEO promised to “create a new and vibrant neighborhood in the center of downtown” using funds from the loan whose process securing it “was seamless and very well-managed by the Colliers team,” he said after JEANNETTE GAEDE the closing. “We are very pleased to have completed the financing,” he said in the release. Earlier in 2014, Colliers MERC AT MOODY & MAIN, WALTHAM MA (RENDERING) arranged a $65 million leasehold mortgage to Forest City Enterprises and Health Care REIT Inc. for JEFF BLACK the refinancing of 40 Landsdowne St. in Cambridge’s University Park at MIT mixed-use complex. Hartford Investment Management Co., an affiliate of the Hartford Life Insurance Co. was tapped for the loan that runs for ONE CABOT RD., HUDSON MA JOHN BRODERICK 7.5 years by Phelan and Jeff Black. The 12-year-old structure totals 215,000 they provided Atlantic Tambone with an aggres- wide footprint has over 13,500 professionals in sf on eight levels and is fully leased for laborato- sive fixed-rate and a structure that catered to 62 countries and 482 offices. The changing ry uses. Terms beyond length were not provided. the borrower’s wants and needs,” Black said of Boston operation coincided with investment team leader Lisa M. Campoli departing to launch Black was also on the case in early 2014 lin- that conclusion. As to the new Capital Markets initiative, a private real estate group pursuing urban infill ing up $12.0 million for Atlantic Tambone Corp. to refinance existing debt at 60 and 70 Codman Colliers conveyed that the entire network is locations regionally. “Lisa has been a very valuHill Rd. in Boxborough. UniBank for Savings embracing a similar approach, pointing as one able member of the team and our executive comstepped up in that instance to back the barometer the hiring last year of Brian Ward as mittee,” Hynes said in a statement when the 144,000 sf which is 100 percent leased to president of the Colliers International Capital changes were unveiled where he pointed to investment-grade tenants who have staggered Markets Group in the America, he a financing vet- “many high-profile investment sales throughout lease expirations. “UniBank really took the time eran who will direct overall strategy in the United her tenure,” such as a $40 million laboratory to understand the collateral, realizing these are States as well as Canada and Latin America. A trade in 2013. “We wish Lisa the best of success u mission-critical assets for (their occupants) and subsidiary of FirstService Corp., the firm’s world- in her new venture,” Hynes concluded.

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north of Boston that proved the swan song for the ARA flag in the area (see story, page 10). Scott was happy to reminisce over the Timberwood Commons assignment, having been involved “from A to Z” in helping SMC acquire the parcel that led to Timberwood’s development and completion in Dec. 2011. “It’s an excellent, best-in-class property you rarely find that far north,” Scott says. The developer instinctively targeted the site because of several key employers—Dartmouth College and Dartmouth Hitchcock Medical Center—plus having metal cutting products manufacturer Hypertherm there as well, that an employer of over 1,200 people. “It is the crème de le crème of apartments in that area,” says Scott, with the price of $160,000 per key one indication of a deal said to have a capitalization rate in the low 6 percent range. ARA principal Philip Lamere calls Lebanon “its own little micro market” to the point that,

TIMBERWOOD COMMONS, LEBANON NH

“If you went 15 miles away, it’s a totally different story,” as to tenant demand. The level of interest and pricing required to nail down Timberwood Commons also suggests investors are more willing to migrate to tertiary areas, adds Lamere. “As Boston gets overheated, people are going back to the Rhode Island and New Hampshire markets looking for yield,” he says. Buyer Merion Realty Partners of Wynnewood, PA, alluded to the demand drivers

for tenants as one factor, as well as being a first-rate project, in a press release it issued after the acquisition. There will be a few “modest interior upgrades” and improvements to the clubhouse and an increase in tenant amenities, but Merion praised the offering for its overall quality and cash-flowing nature. “I think it was a win/win for everybody,” says Scott. Merion “really needed a property of this caliber, and (SMC) did very well selling it.” u

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third-largest community bank in the Commonwealth. Parent Independent Bank Corp. ended 2014 at $59.9 million in net income—up 19 percent YOY—of which $16 million was posted in Q4, a 51 percent gain versus the final frame of 2013. There was a 5.4 percent increase in the lending total YOY to $252.4 million. About 10 to 15 percent of Rockland Trust’s real estate portfolio is in Boston. People’s had branches in Jamaica Plain and West Roxbury and suburban units in Brookline, Newton, Norwood and Westwood. While those four are all well-regarded venues, the acquisition completes a longstanding goal dating back 20 years to have a retail presence in Boston, President/CEO Christopher Oddleifson recounted in the same Real Reporter interview with 186 LINCOLN ST., BOSTON MA Nadeau. The bank has been a longtime lender in the city and a few years ago Gavin, who was brought on to lead a new lendopened a commercial lending and wealth man- ing group out of Brighton, another key People’s agement office in the Financial District, but member, Christopher Lake, has been invited to leadership eschewed a de novo strategy on the join the Rockland Trust clan as a Senior VP, retail front and waited for the opportunity to whereas longtime stalwarts Maurice Sullivan Jr. come along as it did when People’s was put up and Thomas Leetch have been advising on the for sale last summer, with the bank striking merger, both Nadeau and Oddleifson praising the pair for having expanded the Brighton bank quickly. “All is well,” Oddleifson says of the process throughout the inner suburbs and building since successfully being given the go-ahead, enough of a mass to enhance its value. People’s relaying that bank branches and technology of assets were valued at about $600 million when the two institutions “were converted very traded. A sampling of commercial loans provided in smoothly and now we are providing our customers with products and services they did not 2014 by Rockland Trust in Boston includes $7.31 million for a refinancing of 1800 to 1808 have before.” One bonus for both sides is the extra lend- Centre St. in West Roxbury by Patrick E. Roach ing girth the union provides People’s, with Jr.; a total of $12.8 million to an Irish investOddleifson crediting senior loan officer James J. ment group, Frazer PLC, on 20 Marlborough St. Gavin for assembling “a pristine portfolio” that ( $3.0 million for $4.0 million purchase), 165 made the acqFuisition extra sweet for Rockland Newbury St. ($4.0 million for $6.75 million purTrust, and enables the team members kept on chase) and 465-469 Washington St. ($5.85 milafter the merger to pursue deals they were lion for $10.9 million purchase) Frequent client missing when their smaller bank maxed out. the Holland Cos. were loaned $13.8 million on “We want them to continue doing exactly what a South End redevelopment at 477-481 they have been doing, and now they have the Harrison Ave. in March on an asset acquired in capacity to do that,” explains Oddleifson, pro- July 2012. More recently, $15.5 million was delivered viding a “win/win” for both operations. Besides

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to Brickman Associates of New York City used to buy a 68,525-sf Leather District office building at 186 Lincoln St. for $20.6 million this spring, a deal previously detailed by Real Reporter that was brokered by CBRE/NE on behalf of a client of Morris & Morse, whose principals are Edwin B. Morris III and Garlan Morse Jr., CRE.

Market Basket Case TEWKSBURY — Seems like every nook and cranny of the infamous Demoulas Market Basket imbroglio that kept 2014 lively got a boatload of attention, from striking bag boys to Arthur T. kissing babies, there was a camera or Patch reporter at the ready to capture every precious moment. Strange then, that 2014’s massive exchange of the chain’s three-state real estate empire went virtually uncovered, and remains difficult to assess exactly how large in total square footage, number of assets and pricing, although $1.2 billion appears to be the answer on the latter matter. Other aspects appear to check out as well: Cushman & Wakefield’s retail unit run by Geoff Millerd, Justin Smith and US Head of Investments Robert E. Griffin Jr. was given the assignment that involved Demoulas Co. warehouses in Andover and Tewksbury plus 11 stand-alone supermarkets and at least 27 multi-tenanted properties. ARTHUR T. DEMOULAS There are at least a halfdozen land sites in Maine, New Hampshire and Massachusetts, and yes, it does appear the company owned 126-acre golf course in Andover was included in the mix. Indian Ridge Country Club at 73 Lovejoy Rd. became an emotional pawn in the tense standoff that lasted for decades between the Demoulas factions and erupted in the work stoppage and buyout of the Arthur S. Demoulas side of the business pitched in their intractable positions after that contingent accused Arthur T.’s crew of trying to steal the business. Millerd declined comment on the legal/labor imbroglio that drew national attention while Demoulas principals did not respond to inquiries as of press deadline. “That it did,” an industry source with knowledge of the parties involved says regarding whether the portfolio had changed hands. The total number of assets exceeds 50 by that industry professional’s count who is among those putting the price tag at $1.2 billion. Millerd did tell Real Reporter that C&W’s retail division finished at $1.9 billion in 2014 volume, suggesting a few large transactions, several of those outlined in this publication’s retail section. “It was Cushman,” confirmed the informed source regarding the Market Basket trade. Besides the golf course, other large assets are the warehouses at 340 Ballardvale St. in Andover and company headquarters at 875 East St. in Tewksbury, both of which were tense sites of protest during the strike. continued on page 131

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Taurus Takes on Bear Hill WALTHAM — As prior owners King Street Properties focuses its attention on a major gambit in Cambridge’s Alewife district, Taurus Investment Holdings moved in to buy the Bear Hill Business Park through Eastdil Secured in 2014. The $35.5 million transaction which closed in mid-July was one of the buyer’s larger acquisitions locally in 2014, although the group led by CEO Peter Merrigan did pick up a hefty sized multifamily asset in Chelmsford through Apartment Realty Advisors, that $20.0 million exchange wrapping up in the early spring. “Taurus was excited to have acquired a set of well-located Waltham 60 HICKORY DR., WALTHAM MA PETER MERRIGAN assets,” Merrigan said in a press release after paying $160 per sf for the assemblage of eight buildings totaling 220,000 sf, 95,000 sf of which is flex/lab product and the WALTHAM — Hometown real estate firm Duffy remainder being office product, a formula the Properties also bought a piece of the evernew owner considers a bonus. “Waltham has enticing Waltham CRE pie in 2014, picking up historically been considered Boston’s pre-emi- 400 Fifth Ave. at a consideration of $19.7 milnent suburban office market, but has recently lion in a deal that was orchestrated by Eastdil seen an influx of life science companies as Secured advising seller Mark Rubin of Maric well,” he reports, predicting that as the LWP Inc. and procuring the buyer. Duffy Properties retail elements long desired come into the picprincipal Robert Duffy Jr. ture in Waltham, “the Bear Hill Portfolio will be called the 120,000-sf well-positioned to accommodate the needs of a office building “a great variety of prospective tenants.” addition to our portfolio as The park that King Street acquired for $20.5 it complements our other million in Oct. 2006 is at 150, 255, 300, 301 Waltham assets and offers and 355 Bear Hill Rd., 60 Hickory Dr. and 300 tenants a variety of wellSecond Ave. The Eastdil contingent brokering located and affordable the sale includes Brian Barnett, Peter Joseph, STEVE JAMES product to choose from.” Sarah Lagosh, James McCaffrey, Molly PadienDuffy further announced Havens and Stefan Panzone. Taurus did obtain NAI/Hunneman financing to fund the acquisition and anticipatCommercial Co. was being ed capital improvements, with Brookline Bank hired as leasing agent, loaning $24.7 million and A-10 Capital also having earlier in 2014 backing the investment. named the team led by Earlier in spring 2014, Taurus and Water principal Steve James and Street/PhilMor Real Estate Investments had Associate Jason Rexinis its bought The Meadows Apartments in EVAN GALLAGHER agents at the firm’s Chelmsford from ARA client John M. Corcoran Waverley Oaks Office Park, also in Waltham. Co. The 180-unit, 10-building complex at 82 Says Duffy: “After the effort and creativity they Brick Kiln Rd. had been owned by Corcoran have shown on Waverly Oaks, we wanted to since buying the 14.2-acre property in 1989 for have the NAI/Hunneman (professionals) put $8.2 million (see story, multifamily section). that same amazing effort on this asset.” Taurus funded the Chelmsford purchase with The assignment was eagerly accepted, with $16.1 million from Leader Bank of Arlington. James deeming 400 Fifth Ave. “a terrific asset”

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based on location alone. Add in “first-class office finishes, a wealth of on-site and area amenities and committed local ownership like Duffy, and it’s a home run offering tenants the ideal place to bring the business,” he says. Acquired all cash, Duffy did borrow $11.0 million in December from Nationwide Life Insurance Co. Duffy has 1.2 million sf alone in Waverley Oaks Park where other NAI/Hunneman team members leasing the eight-building complex include Vice President Brendan Daly and principals Jim Boudrot, Evan Gallagher and Michael McCarthy. The landlord also has a presence north on Route 128, owning such properties as 76, 78 and 80 Blanchard Rd. in Burlington (200,000 sf total) and several more in Lexington. In Burlington, the firm added the former Building 19 on Cambridge Street (Route 3A) last year through TRB & Associates President Thomas R. Blakely. “It is not often and actually quite rare to find and acquire such a tremendous piece of commercial real estate at a prime location in Burlington,” Blakely said after the 93,875 sf in four buildings on 6.8 acres changed hands at a price of $6.9 million.

Letting it Go CAMBRIDGE — An eye-popping proposal gave KS Partners President Kambiz Shahbazi an unexpected surprise in 2014 when HFF’s Capital Markets found a bidder in CBRE Global Investors willing to pay $35.5 million for a 54,275-sf retail asset at Massachusetts and Somerville Avenues, its value enhanced by a two-level Super Walgreens in the fully leased building. “That was a phenomenal result,” Shahbazi concurs of the three-level Porter Square Galleria which was the longest held building in his portfolio, having been acquired for $7.9 million in Dec. 1997. “It is a property I really did not want to let go of, but we got a crazy number and that made it hard to say ‘No,’” explains Shahbazi, whose empire today is targeting industrial and office space after many years in the retail arena. The HFF team on the Galleria assignment included Senior Managing Director Coleman Benedict, Director Benjamin Sayles and Analyst Patrick McAneny. Other tenants besides Walgreens are Anne’s Taqueria, Potbelly, Rock N’ Fitness and Sprint. The Super continued on page 132

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Walgreens is an expanded prototype that fills 21,000 sf, among the first in New England, with CBRE/Grossman Retail Advisors Senior VP Jeremy Grossman inking that landmark lease for KS that helped it attract an institutional buyer.

Bierbrier Milestone LEXINGTON — Bierbrier Development Co. reached a significant anniversary in 2014, celebrating 40 years in business with a focus on Eastern Massachusetts retail and no signs of slowing down, as evidenced this spring when the group founded and still run by Leonard H. Bierbrier outdueled a host of institutional investors to buy South Shore Place in Braintree, a $41.5 million acquisition that its new owner insists was well-worth the price tag that amounted to a lofty $922 per sf. The same HFF contingent trading the Porter Square Galleria for KS Partners had the exclusive listing in Braintree on behalf of its developer, Carpenter & Co. In a press release after the deal first announced in LEONARD H. BIERBRIER early January by Real Reporter closed a few weeks later, Bierbrier noted it was his firm’s largest acquisition ever and also among the biggest retail trades regionally of the prior 12 months. “South Shore Place is an exciting addition to the Bierbrier Development portfolio, offering a stable income stream for the future as one of the few open-air locations for retailers interested in growing in this market,” Bierbrier says of the fully leased asset whose tenants include AT&T, Ben & Jerry’s, Joseph A. Banks, Legal Seafoods and Starbucks. Bierbrier does its own leasing and marketing through Christine Cannon. To facilitate the South Shore Place acquisition, Bierbrier borrowed $29.6 million from Wells Fargo arranged by Brian Corcoran of Ackman-Ziff. Corcoran is the same mortgage broker—one Bierbrier credits for superior service—arranging a CHRISTINE CANNON $22.8 million Bank of America refinancing in spring 2014 of the company’s Wellington Circle Plaza, a retail center in Medford., that a 55,500-sf complex at 4110 Mystic Valley Pkwy. that was Bierbrier’s first development project when starting out in 1974. It continues to fare well, he says, and its mettle

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was proven in the favorable refinancing Corcoran cobbled together in 2014. Bierbrier tells Real Report he has plans to pursue further acquisitions and spent the start of his fourth decade leasing up a development project in Newton, the Needham Street Village Shops, a prototype concept first conceived in Arlington. The Newton venue opened earlier this year. Bierbrier’s fiefdom today extends south to Brockton and north to Haverhill where it owns Walgreens Plaza.

Toasting in the Triangle BURLINGTON — Linear Retail has been on a buying spree Forever, as defined starting back in its 2003 launch to earlier this month when three more assets were added to the pile at a total consideration of $57.5 million, and that is how the company has come to own more than 75 convenience-oriented retail properties valued in excess of a half-billion dollars throughout New England. Led by President William J. Beckeman and tireless Acquisitions Director Aubrey Cannuscio, Linear’s executive management team includes leasing expert Joel Kadis and CFO Deepa Krishnamurthy. Bryan Furze is Vice President of Development and Asset Management and Gail McNeice serves as Vice President of Leasing and Asset Management. In 2014, a couple of small but strategic acquisitions were completed by the troupe, paying $3.1 million for 725 Cochituate Rd. in Framingham, an 8,025-sf Margarita’s Restaurant in the so-called Golden Triangle retail corridor where the firm had just a few months prior fulfilled a long yen to own in the triangle, its inaugural purchase 140-142 Worcester St. (Route 9) through Godino Real Estate, their $2.4 million bringing Linear a 5,275-sf property leased to a Chinese restau-

rant and Stardust Jewelers. Linear has had a lengthy stake in Boston, and added to its pile there last summer by securing a retail condominium at 558-578 Washington St., that being the hugely successful Millennium Place residential tower in the thick of Downtown Crossing. Totaling 10,400 sf, the Linear unit is demised into three slots, two of them leased when acquired to a Legal Seafoods concept AUBREY CANNUSCIO restaurant and Londonbased Caffe Nero. “We are thrilled to have purchased this great retail condo in the groundbreaking Millennium Place,” Cannuscio said after closing on that investment at a cost of $7.2 million. JOEL KADIS Linear made other acquisitions in 2014, those of the personnel talent sort in hiring Lauren Rogers as asset manager, naming Eric Banks Controller and in December announcing the arrival of Rick Rostoff as Vice President of DEEPA KRISHNAMURTHY Acquisitions. The founder of Spectra Realty Associates, Rostoff has participated in the brokerage and development of more than $200 million in hotel, office and retail product advising some of New England’s largest RICK ROSTOFF developers and owners plus various hotel and retail REITs. “Rick has a proven track record for closing deals and we expect him to contribute greatly to growing Linear’s portfolio. In the just-concluded activity, Linear bought from developer Ross Hamlin the Eaglewood Shops in North Andover and two Waltham properties, Main Street Marketplace and the adjacent 1036 Main St. The North Andover center at 175 Turnpike St. (Route 114) has 77,550 sf in three buildings that came on line in 2005. Linear paid $34.2 million for Eaglewood, whose tenants include Burton’s Grill, Jos. A. Bank, Pier 1 Imports and Staples. The firm paid $850,000 continued on page 133

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for the 2,075-sf single-tenant building at 1036 Main St. and $22.4 million to secure Main Street Marketplace which has 44,450 sf and was completed in 2013. Key tenants in the fully leased property include Aspen Dental, Chipolte, Panera Bread and Party City.

Moving on Up A pair of veteran brokers teamed up in 2014 to sell 655 Andover St. in Lawrence for $11.5 million, as Robert Cronin of Colliers International advised the seller and Burgess Properties President Phillip Burgess negotiated for the buyer, Asahi/America, a Malden company that needed to expand its operations and found the Lawrence complex that Staples Inc. once occupied to its liking. ROBERT E. CRONIN Dating to 1998, the building encompasses 200,000 sf of office and warehouse space and was acquired with a $13.0 million loan from Citizens Bank. The assignment keeps on giving for Burgess, who was then retained to list PHILLIP K. BURGESS Asahi/America’s Malden facility, which he did earlier this year in a $7.0 million purchase by Hoff’s Bakery of Medford,

MARGARITA’S RESTAURANT, FRAMINGHAM MA

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that company also outgrowing its building and embracing 35 Green St. as a location where it can accommodate those operations, growing from about 30,000 sf to 100,000 sf that will be transformed from warehouse to a commercial bakery with support from the city of Malden, MassDevelopment and Brookline Bank, which

loaned $3.4 million to the buyer. And for icing on the Hoff’s Bakery cake, Burgess has their Medford home at One Brainard Ave. on the block. Being pitched as a good venue for food production, the 29,200-sf single-story building has an asking price of $4.2 million, or approximately $144 per sf. u

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Citing CRC’s hands-on experience in all sides of commercial investing plus “an honest and value-added approach,” Bruce reports the CRC method is to “look beyond the transaction with a long-term partnership mentality” and applauds that “they do not hesitate to tell you what they really think about any aspect of a deal.” Charles Hajjar of Hajjar Management chimes in that “we have worked with Cornerstone on many transactions over the years and have always been glad that we did,” with the firm demonstrating a skill “to deliver us the best rate and terms available . . . something that pays off over and over throughout the life of a loan.” Another benefit, he conveys, is Cornerstone gathering the due diligence and other data lenders are seeking, saving time and “we know the job is getting done right,” Hajjar says while adding that his firm also taps into CRE’s stable of third-party vendors to cut costs on such things as appraisals and environmental documentation. “Cornerstone is a great partner and we plan on working with them for many years to come,” Hajjar says in his statement. Mount Vernon Co. is a fan as well, or so conveys founder Bruce A. Percelay in calling CRC “our go-to source for construction and permanent financing,” as demonstrated in a series of loans that also covered acquisition monies for the Boston-based firm that these days is being heralded for its Green District gem in Allston (see story this publication). “Speed and dependability of execution is critical for us, as well as achieving the lowest rates, and in both these categories Cornerstone has delivered,” Percelay proclaims. The Mount Vernon Co. portfolio that has expanded dramatically this decade got

SEABROOK CROSSING, SEABROOK NH (RENDERING)

mortgages through Cornerstone in 2014 to buy such assets as a South End hotel, Commonwealth Avenue commercial space and multiple mixed-use and multifamily properties in Boston and Cambridge involving dozens of lending institutions all sourced through CRC. “We have some very attractive financing, a lot of loans with ‘three’s’ in front of them, and that’s nice to see,” Percelay tells Real Reporter. Most recently, Mount Vernon Co. eschewed other debt brokers in a mixed-use South End building at 16-24 Union Park St. it acquired in late January bought through Boston Realty Advisors for $5.42 million backed by a $4.0 million Cambridge Trust Co. loan arranged by CRC. There were plenty of other mortgages delivered Mount Vernon Co. in 2014 by the CRC crew, including $15.1 million from Eastern Bank to buy the 204-room hotel at 40 Berkeley St. for $17.2 million. On the multifamily front, $5.25 million was arranged from East Boston Savings Bank in late December when Mount Vernon Co. bought 155 Salem St. and 10 Wiget St. in the North End from its longtime owners plus the company paid another $11.6 million in early December for Mission Hill apartments at 198 Hillside St. and 40-44 Parker Hill Ave., using

$7.8 million from First Republic Bank. A big book of business for CRC last year was on the retail front, including a series of loans arranged for Waterstone Retail to enable construction and upgrades to properties in Maine, New Hampshire and Massachusetts, the Bay State instrument $8.4 million to build a 54,200sf neighborhood center at 2 Broadway (Route 28) in Methuen on a 5.6-acre land site. Cornerstone was able to deliver a 12-year loan term with “an aggressive rate” and interest only during the construction period before morphing into a permanent note. “We enjoyed working closely with Cornerstone,” Waterstone Retail principal Neal Shalom said after that loan was delivered to allow work to begin after a six-year process. A privately held real estate acquisition, development and management company, Waterstone Retail also went to CRC to finance its 167,000sf Seabrook Crossing retail development in Seabrook, NH, that a $23.0 million mortgage and $8.0 million more for another planned shopping center totaling 250,000 sf in Rochester, NH. “People do know us for multifamily, but we do a lot of different properties,” Natalizio says in adding the expertise is portable to assist clients beyond its New England base. u

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Green Proves a Healthy Hue in Allston A BY JOE CLEMENTS LLSTON — Some might have thought Bruce A. Percelay was tilting at windmills four years ago in vowing to create a “Green District” from the hardscrabble area where Commonwealth and Harvard Avenues converge amidst a sea of humanity and garish neon, but instead his Mount Vernon Co. roped itself a windfall in 2014 from converting blocks of low-slung industrial buildings along Brainerd Road into a transformational mixed-used neighborhood trumpeting sustainability in design, management and tenant lifestyle. The 500 apartments created caught the eye last summer of institutional investor ASB Management and its local partner, National Development, who bought three of the eight properties and their 283 apartments plus 275 parking spaces for a total consideration of $147 million, scooping up 100 units at The Element in BRUCE A. PERCELAY September for $56 million before closing in early 2015 on The Edge and The Eco, which were 100 percent and 95 percent leased and designed for LEED Platinum certification from the USGBC, that lofty goal reflective of the sustainabilJAY BISOGNANO ity mantra Mount Vernon Co. has put on the endeavor. “National Development 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,” NatDev President Thomas M. Alperin outlined after his firm and ASB beat out heavy competition for the opportunity marketed exclusively through Boston Realty Advisors. Percelay says he prefers a long-term hold—and does still control the remaining pieces and acquired more Allston real estate since the agreement—but in opting to prune off a slice of the Green District, BRA multifamily practice leader Christopher D. Sower says the developer concurred that such an offering would reap munificent sums as it most certainly did with a capitalization rate said to be in the three percent sphere.

EDGE, ALLSTON MA

ELEMENT, ALLSTON MA

“We were extremely persistent in letting them understand where we thought the market was headed, but Bruce and (Mount Vernon Co. principal) Jay (Bisognano) never make a decision without doing their homework first and

“

I am very impressed by what Bruce has created with his Green District — it has become a very nice place to live and a great improvement to that area.

”

CARL VALERI Hamilton Co. President

they recognized this exit strategy made a lot of sense,” says Sower, who was with Cushman & Wakefield in Dec. 2010 when Mount Vernon made its initial foray into the neighborhood, acquiring 9-23 Griggs St. for $4.65 million and getting the permits in place to construct multifamily, leading to The Element as the Green District’s opening salvo when it came on line in 2012. The portfolio generated 175 inquiries from suitors and changed hands for just under

$520,000 per unit, among the highest rates ever paid for Boston apartments. Other residential projects in the mix are The Gateway, The Matrix and The Metro and Mount Vernon Co. also owns retail properties featuring a large Starbucks unit and in early 2014 he paid $2.7 million for 1314 Commonwealth Ave. into which a popular boutique market is opening a unit there, that operation not only being “the missing piece” in Percelay’s dream of creating an all-inclusive community with unique features but also replacing a raucous nightclub, the Joshua Tree, that had been the source of many local complaints. “This completes our vision for the Green District,” Percelay told Real Reporter this spring upon announcing that Bee’s Knees would open a 10,000-sf store at the property. “We could have leased that space for a lot more money, but that wasn’t our point,” Percelay outlined at the time, explaining, “There were two big amenities we always wanted there, a Starbucks and a highquality, boutique market that could meet the needs of the neighborhood, and we are very happy to have been able to achieve both.” To those who know the Rhode Island native who has been active in Boston-area real estate for over a quarter-century, Percelay’s doggedness reflects a blend of his background in sales and marketing plus strict attention to detail. “Bruce is not only one of the best operators in the city, he has a keen eye for how to present a property and he does a first-class job in everything he touches,” says Paul Natalizio, founder of mortgage brokerage firm Cornerstone Realty Capital who once worked for Percelay and these days has him as a client. Cornerstone helps borrowers negotiate with lenders to create competition and ostensibly better terms (see story page 53), and Natalizio says in his many years of working with and for Mount Vernon Co. there was “every confidence” the Allston gambit would pay off for the developer regardless of the public skepticism. “I know if Bruce sets his mind on something, there is an excellent chance it will work, and we are very happy to have been a part of helping him see his vision succeed with the Green District,” says Natalizio, whose Lexington-based group secured loans for the assets acquired. continued on page 135

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ALLSTON’S GREEN DISTRICT continued from page 134

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