Real Estate Deals

The 37th closing at The Clarendon Back Bay was recorded, today. The purchase price was $2,400,000 and included one deeded garage parking space.

This was an 22nd-floor, three-bedroom, three and ?-bathroom, 1,171+/- square foot condo, approximately $1,225.74 per square foot.

There are 103 units in the building on floors 15-33; there are fourteen floors of luxury apartments on the lower floors, and a restaurant on the first, along with a branch of the US Postal Service.

With the latest sale, the building is 36 percent occupied.
 
Boston office market improving

Rents are rising as companies expand into vacant space
By Casey Ross
Globe Staff / December 25, 2010

After two years of declines, the Greater Boston office market appears to be recovering, with landlords raising rents as companies expand and occupy more space.

Average asking rents for top-shelf space jumped to $48.62 per square foot in the last three months of the year, up from $47.31 at the end of 2009, according to Richards Barry Joyce & Partners, a real estate services firm. Rents have now risen for the last two quarters.

?The market is clearly stabilizing,?? said Bob Richards, president of Richards Barry Joyce. ?We?ve been looking for some bona fide good news to show the market is moving forward, and these numbers show it?s now happening.??

The amount of available office space also dropped by 2.2 million square feet during the last six months of the year, a sign companies are hiring and expanding again after the recession resulted in layoffs in numerous industries. Overall employment in Greater Boston has increased by 29,000 jobs since June.

While the market is improving, it is still nowhere near the peak of summer 2008, when average rents got to about $65 a square foot before falling sharply over the next couple of years. Also, the lower rents of today still are not enough to justify constructing office buildings, meaning the commercial building sector might be in for another sluggish year.

?I don?t see new construction happening,?? said John D. Miller, senior vice president of Lincoln Property Co., a Boston real estate firm. ?I don?t think you?ll see it in 2011 and I don?t think you?ll see it in 2012.??

The only office construction projects moving forward are custom-built complexes by companies that can pay for their own new headquarters. For example, Forrester Research is building a complex in Cambridge and Liberty Mutual Insurance Co. has begun construction of a 22-story tower in the Back Bay.

Most other companies are still seizing bargains in the supply of existing office space, which in some locations is leasing for more than $20 per square foot less than peak prices.

The opportunity for deals fueled a significant increase in leasing activity in 2010: Parametric Technology Corp., a software maker, signed a lease for 320,000 square feet in Needham; law firm WilmerHale renewed a lease for 272,000 square feet on State Street in Boston; and the financial services firm Columbia Management took 156,000 square feet on Franklin Street in Boston.

The commercial sales market is also stirring after extremely slow years in 2008 and 2009. Boston Properties made by far the biggest acquisition of the year by purchasing the John Hancock Tower for more than $930 million. The firm also bought the Bay Colony Office Center in Waltham for about $185 million. JPMorgan Chase and local development partner Steve Samuels are also trying to close on the purchase of the massive Landmark Center office and retail complex in Boston?s Fenway neighborhood.

?Overall we?re starting to see an increase in business confidence,?? said Richards. ?There are still plenty of challenges, but people have become a lot less wary of putting a stake in the ground and saying, ?Our company is moving forward.? ??

Link
 
Market heats up for office towers

Sales in Boston point to emergence from downturn
By Casey Ross
Globe Staff / January 16, 2012

Boston’s office towers are again hot commodities after several years of slow sales, a sign the city’s economic recovery is gathering speed as businesses expand and investors swarm opportunities to snap up trophy properties.

Eleven buildings changed hands in the city last year, a nearly fourfold increase from 2010, according to the commercial real estate firm Jones Lang LaSalle. Among the towers sold were 40-story Exchange Place on State Street and 33 Arch St. - deals that totaled nearly $1 billion. . .

. . .The volume of sales is still far from 2007, when 34 buildings changed hands for total sales of $4.9 billion. But the improvement is unmistakable after a period between 2008 and 2010 in which only 14 office buildings were sold in Boston, the kind of cold streak that causes nightmares for commercial brokers. . .

. . .Real estate specialists said underlying causes are job growth in key sectors such as health care and technology, as well as higher office rents that promise better profits with less risk than stocks and other investments. Average asking rents at top-rated buildings in Boston rose by more than 4 percent last year, to about $49 per square foot.
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Full Article
 
Boston.com - February 14, 2011
Bank of America near sale of tower
Boston Properties is said to offer $600m for site
By Todd Wallack and Casey Ross
Globe Staff / February 14, 2012


Bank of America Corp. has reached a tentative deal to sell its 37-floor skyscraper in Boston’s Financial District to Boston Properties Inc. for about $600 million, according to people familiar with the agreement.

The move underscores Boston Properties’ position as one of the area’s largest landlords. The Boston-based real estate investment trust owns 53 buildings in the area, including the two tallest office towers in Boston: the John Hancock Tower and the Prudential building. The latest deal would give Boston Properties ownership of the sixth-tallest building in Boston, at 100 Federal St.

The reddish-brown tower, known for its distinctive bulge above its base, has been a symbol of Boston banking since it was built in 1971. It served for decades as the headquarters of Bank of Boston and its successor, FleetBoston Financial, before Bank of America bought Fleet in 2004. It is now one of Bank of America’s largest buildings.

Bank of America spokeswoman Kelli Raulerson declined to comment on the deal with Boston Properties. But Raulerson noted that the bank is considering selling office buildings across the country.

Two weeks ago, Bank of America announced plans to sell three high-rises in New York and Charlotte, N.C., where the bank is headquartered. And Bank of America has said it was considering selling the Boston office tower as well.

Many companies lease, rather than own, their real estate so they can focus on their core business and invest their capital elsewhere. And Bank of America specifically has been in the process of selling billions of noncore assets and narrowing its focus over the past few years.

“We are looking at streamlining our operations,’’ Raulerson said. “Real estate is not a core business of Bank of America.’’

Still, Raulerson said any deal to sell the Boston office tower would not affect local employees, because it would lease back its space from the new owner, just as it has agreed to do in New York and Charlotte.

The bank, which has 7,000 employees in Massachusetts, occupies about 60 percent of the building. Other prominent tenants in the building include the Boston College Club on the 36th floor.

Boston Properties declined to comment.

This is not the first time the building has changed hands. The bank that originally owned the tower, Bank of Boston, sold the building to Equitable Life Assurance Society of the US for $363 million in 1984. But Fleet agreed to buy the building back for $366 million in 1999 when it bought Bank of Boston in 1999.

This time, the bank appears to have found a buyer almost as soon as it tapped real estate services firm Cushman & Wakefield to sell the building, a sign of the strength of the market for commercial real estate in downtown Boston. Cushman declined to comment.

Many institutional investors and real estate companies have been eager to buy buildings with solid tenants that can yield a steady source of income. And occupancy rates have remained relatively high in downtown Boston in part because the economy is stronger here than in the nation as a whole and because there were not many new buildings added to the Boston skyline during the real estate boom.

“The fact that you could execute a sale so quickly is indicative of the liquidity of the market,’’ said Lisa Campoli, an executive vice president at Colliers International, a commercial real estate firm with offices in Boston.

Buyers have recently scooped up other prominent office towers in Boston. Exchange Place, a slightly smaller building at 53 State St., fetched $610 million in December. And 33 Arch St. sold for $365 million last year.

In addition to Boston Properties, Equity Office of Chicago continues to control many prominent buildings in the region, including South Station, a 34-story tower at 225 Franklin St., and a 32-story tower at 100 Summer St.

Todd Wallack can be reached at twallack@globe.com. Follow him on Twitter @twallack. Casey Ross can be reached at cross@globe.com.
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Cushman & Wakefield: Boston has top US office market absorption rate for 2012

01/11/2013 11:10 AM
By Chris Reidy, Globe Staff

By one metric of commercial real estate activity, Greater Boston’s central business district fared better than any other market in the country.

Cushman & Wakefield, a large commercial real estate services firm, compiled statistics in a study that examined business districts’ office market absorption rates, which measure the net rate of growth in leasing during a given period. The study looked at the central business districts in 28 cities across the country.

Cushman & Wakefield defines Greater Boston’s central business district, or CBD, as including such neighborhoods as the Financial District, the Back Bay, Government Center/North Station, Midtown, Seaport, and Charlestown.

For 2012, absorption rose in Greater Boston’s CBD to 1.8 million square feet, versus 200,000 square feet in 2011. For 2012, Chicago was second in absorption with about 1.2 million square feet, and Houston was third with 1.08 million.

“We are seeing very solid leasing and sales activity across all Greater Boston areas and asset classes fueled by increasing occupier and investor demand,” said Robert E. Griffin Jr., president of Cushman & Wakefield’s New England region. “What is most noteworthy about the recovery now underway in Boston is its level of consistency across the board. In addition to a significant spike in the Financial District leasing activity, we are also seeing very healthy leasing fundamentals in the suburbs approaching a 10-year rolling average. Robust occupier demand is fueling new construction at a level we have not seen in more than a decade. This is supporting a new trend whereby owner/occupiers are opting for new construction over second generation space in both the CBD and suburbs. Also supporting increased sales activity are favorable financing terms combined with attractive pricing and the continued shift toward the ‘live-work-play’ model which is here to stay.”

Just this week, the Globe has published two stories about commercial real estate activity in the Financial District.

A story in Friday’s Globe reported that one of the biggest buildings in the neighborhood, 100 Federal St., is exploring plans to open multiple restaurants and shops on its heavily traveled plaza.

And an earlier story noted that Brown Brothers Harriman & Co., the oldest privately held financial institution in the country, is moving to a historic building in the Financial District, signing one of the largest leases in the city in recent years.
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Link
 
A good sign for downtown and the entire city. Also a great rebuttal claiming the demise if downtown boston.
 
Two Greenway parcels for sale

The state’s Department of Transportation is seeking buyers for two small vacant parcels along Boston’s Rose Fitzgerald Kennedy Greenway.

Dubbed parcels “CC” and “DD,” they were taken by the state in connection with the recently completed Central Artery Tunnel Project and transferred to MassDOT upon its creation in 2009.

Parcel “CC” consists of 2,024 square feet of land between Well and India streets. Parcel “DD” includes 646 square feet between Milk and Central streets. Bidders may bid on one or both parcels. MassDOT will select the bidder with the highest bid.

Bids are due at MassDOT’s Office of Real Estate and Asset Development by 2 PM on Wednesday, February 6.
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0108_Greenway_CC_DD_Parcels%20.jpg
 
I can't see what good those would be to anyone other than the adjoining building owners, who could maybe turn them into outdoor restaurant seating. DD looks like it's actually part of the sidewalk.
 
Since the only parties likely to be interested are the adjoining property owners, this might mean that the adjoining property owners expressed interest in acquiring these parcels. In order to accommodate a sale to the property owners and comply with statutory requirements, DOT would have to put the parcels out to public bid.
 
I'd assume they were taken by the state from those property owners to begin with, when the Big Dig started.
 
Reports offer mixed views on direction of Boston office market
By Thomas Grillo
Jan 6, 2014, 1:35pm EST

Boston’s office market is showing mixed signs of a recovery as rents are rising while availability is also increasing, according to a pair of separate reports released this week.

The city's 61.7 million-square-foot office market saw average asking rents swell to $43.31 in the fourth quarter, up from $41.48 for the same period over year ago, a 4.4 percent hike, according to Cassidy Turley.

While some landlords enjoyed rising rents, the overall amount of available space, including sublease space, rose to 18.3 percent in Q4, up from 16.7 in Q4 of 2012. That change reflects nearly 300,000 square feet of negative absorption.

. . .

In the Back Bay, the overall availability rate increased to 15.7 percent, up from 13 percent one year ago, while average rents slipped to $48.48, down from $49.15, according to Cassidy Turley's report.

In the Financial District, overall vacancies increased to nearly 22 percent, up from 17.5 percent for the same period a year ago. Rents, on the other hand, did better. The average asking rent in the Financial District was $46.04 in Q4, up from $44.37 a year ago.

The Seaport District remains among the hottest submarkets in the city. At $52.92 per square foot for Class A properties, asking rents are only 2 percent lower than Class A asking rents in Back Bay of $53.27. Office availability across all classes in Seaport fell slightly to 18.3 percent in Q4, down from 20 percent one year ago.
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Full article
 
Survey: New inventory pushing Boston apartment rents down

Apr 30, 2014, 12:36pm
By Thomas Grillo

Rents in Boston’s Back Bay and South End fell by more than 9 percent in the first quarter — the biggest drop of any Hub neighborhood — as competition from a handful of luxury properties in the downtown is putting downward pressure on prices, according to a new report from CoStar Group.

The decrease in rents stems from leasing that is underway at The Kensington in Downtown Crossing, AvalonExeter in the Back Bay, The Victor at North Station, 315 on A and Waterside Place in the Seaport District, researchers said. The combination of these more than 1,000 units is providing lots of choices for renters, encouraging landlords to offer incentives, such as one month free rent when they sign a lease.

“People who would have moved to the Back Bay or the South End have more choices now from these luxury towers, and these neighborhoods are losing demand to those buildings,” said Mark Hickey, a real estate economist at CoStar.

After reaching a high of $3,683 for an average apartment in the Back Bay and South End in first quarter of 2013, average rents have fallen to $3,341 in Q1 of 2014.

Despite the drop in average rents, the two tony neighborhoods are getting the highest prices for apartments anywhere in the city.

Downtown and Chinatown, the second highest priced neighborhood for renters, also saw prices dip in the first quarter. The average rent for an apartment in these neighborhoods slipped to $3,073, down 5 percent from a year ago when rents were $3,236.

In the Seaport District, rents fell by 2.1 percent to $3,065 from January through March, compared to $3,131 for the same period last year.

“If I’m looking for a brand new apartment and I can afford these high-end rents that are being asked, I have lots of choices and that’s having an impact on rents” said Aaron Jodka, manager, U.S. market research for Co-Star.

Allston-Brighton remains the most affordable neighborhood. Average rents in the first quarter were $1,919, up 1.6 percent from a year ago when rents were $1,889.

“Allston-Brighton is very student driven, it’s an older inventory and not typically where many folks start living in an apartment in Boston,” Jodka said.
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http://www.bizjournals.com/boston/r...boston-apartment-rents-down.html?iana=ind_cre
 
So Grillo's own article says rents have gone up in an affordable neighborhood like Allston-Brighton (and I can't imagine we wouldn't see the same looking at similar neighborhoods, which are conspicuously absent), but because rents have gone down in the handful of most expensive neighborhoods in the city the headline is "Boston Apartment Rents Down." What a load.
 
How about my rent in Union? Nah, that will keep going through the roof because everyone's so excited about the GLX in three or four years... womp...
 
^^I think the article makes a solid case that average rents across a neighborhood will go down if sufficient inventory is added to them. Allston/Brighton has not added new inventory as quickly as other neighborhoods, but the New Balance & Samuels projects will be more indicative of the effects new inventory has on the market when they complete in the next few years.
 
Boston's office availability rates fall in the first quarter as rents rise

May 5, 2014, 1:44pm EDT
By Thomas Grillo

An improved economy helped fill Boston’s offices in the first quarter as most of the city’s downtown submarkets saw the availability of office space decrease while rents increased, according to a new report from CoStar Group.

Boston’s burgeoning Seaport District continues to do well as the availability rate, which includes vacancies as well as soon-to-be-vacant spaces, dropped to 14.6 percent in the first quarter from 15.2 percent for the same period one year ago in a market that has 12.1 million square feet of offices. As space became more sparse, annual rent swelled to $31.88 per square foot, up from $30.73 one year ago.
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http://www.bizjournals.com/boston/r...ns-office-availability-rates-fall-in-the.html

Fast Stats

Downtown/Financial District, 42.7mm square feet, vacancies rose to 17.9% from 15.8% but rents rose to $37.07, up from $36.63 psf a year ago.
North Station, 7.5mm sf, vacancies dropped to 3.8% from 4% and rents are at $29.82 psf versus $28.34 last year.
North End/Waterfront, 1.9mm sf, is at 5% vacancy versus nearly 10% last year, and rents dropped slightly to $29.72 psf versus $29.96.
Midtown/DTX, 5.8mm sf, saw vacancy drop to 7% versus 7.9, and rents rise to $31.18 psf versus $28.51.
The Seaport, 12.1mm sf, vacancies fell to 14.6% from 15.2, and rents rose to $31.88 versus $30.73 a year ago.
Back Bay, 17.1mm sf, vacancy climbed slightly, rising to 12.7% versus 12.4% last year, but rents have increased to $42.07 psf versus $40.53.
 
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