New Listing, Leases Keep CBRE/NE Busy with Firm Tabbed as Exclusive Agent at 100 Apollo Dr. in Chelmsford

By Joe Clements

CHELMSFORD—Commercial real estate giant RREEF Funds has selected an experienced brokerage team from CBRE/New England as listing agent for 100 Apollo Dr. The three-story, 110,000-sf structure is a high-end office building located near the juncture of Routes 3 and Interstate 495.

A CBRE/NE official did confirm a group led by Jason Levendusky and Mark Reardon is taking on the leasing assignment along with Associate Robert LeClair, but could provide no further details on the listing. “It’s one of the nicest buildings out there,” one broker opines of the 11-year-old facility.

CBRE/NE’s suburban north brokers have had a busy summer as it is, evidenced by press releases issued this week announcing multiple deals at both the New England Business Center in Andover and the Burlington Business Centre in Burlington. Meanwhile, Reardon and David Connolly just negotiated the sale of 9 Alpha Rd. in Chelmsford for $2.7 million (see story, page three).

Centered in the heart of the I-495 submarket, Chelmsford has undergone severe swings in fortune during the past decade, launching into the new millennium as a hotbed of innovation before succumbing to the technology crash that hit in 2001. An encouraging recovery that began in 2004 and ran into 2008 was suddenly dashed by the national recession nearly two years ago, leading to several properties being abandoned by tenants and ultimately being foreclosed on by impatient lenders.

Presently, I-495 is fighting its way back to stability, but has not fared especially well to date in 2010. According to mid-year figures from Colliers Meredith & Grew, the submarket’s 24.9 million sf of office space saw negative net absorption of 195,000 sf in the first two quarters of 2010. That has pushed the vacancy rate to 24.4 percent, higher than the Greater Boston average of 21.8 percent..

Despite the overall market malaise, CBRE/NE VP Kerry Olson says this has been the busiest August in her 12-year career, with additional leases pending going into the final few weeks of summer. Already, Olson and LeClair assisted New England Business Center landlord New Boston Fund in signing two deals totaling 4,650 sf, one a renewal by Melanson Heath & Co., and the other a new commitment from SNI Companies.

“People are more confident in the economy, and there are many companies with lease expirations coming due who need to act,” Olson tells The Real Reporter in assessing the spurt of leasing.

In the case of Andover, Olson says she believes NEBC’s ability to cater to smaller tenants is one reason things have remained busy at the three-building, 248,000-sf park. The leasing broker for Melanson Heath & Co. was Tyler Ewing of Grubb & Ellis, while Chris Lawrence and Brian Tisbert of CMG served as agents for SNI Companies, a provider of recruitment and staffing services.

“SNI Companies will be an excellent addition to our roster of tenants, and we are pleased that they have signed a long-term lease,” Olson says, while adding that the renewal by Melanson Heath & Co. “illustrates the value and benefit for tenants at New England Business Center.”

Down in the Route 128 submarket, Olson and Levendusky assisted Multi-Employer Property Trust in leasing more than 11,000 sf at Burlington Centre.  Oasis (Organization for the Advancement of Structural Information) will occupy 2,400 sf at 25 Corporate Dr., while Viridity Software is leasing  in excess of 8,800 sf, with both planning to relocate by this autumn.

“Burlington Centre is a very attractive location in the Route 128 North area,” says Olson. “The park has a prime location with superb visibility, and excellent on-site and nearby amenities in addition to a responsive and well-capitalized landlord. As such, we are seeing significant interest in the remaining available space.”

Olson referred questions regarding 100 Apollo Dr. to Levendusky, who was unavailable as of press deadline.

Telecom Firm Dials into 600 Cummings Center

BEVERLY—A headquarters search across the North Shore has ended here in the opening of a 9,000-sf operation by Atlantic Tele-Network Inc. at 600 Cummings Center, part of the Cummings Center mixed-use complex that encompasses two million sf of commercial space. The 65,000-sf building recently underwent an upgrade by landlord Cummings Properties, whose in-house team also custom-designed and constructed ATN’s new quarters in time for the firm’s relocation from abutting Salem during the past week.

“It’s not your vanilla build out,” relays David Ryder, leasing officer for the park. “The space is unique and quite attractive.” Elements lauded include mahogany floors, vaulted ceilings, exposed trusses and etched glass walls. There is also natural light from skylights and three window lines that provide picturesque views of Upper Shoe Pond and other natural settings. ATN principal Justin Benincasa describes the park overall as “distinguished, yet distinguishable  from your average suburban office setting.” The firm’s chief financial officer, Benincasa recounts in a press release that “when David walked us through 600 Cummings Center, we immediately knew it would be a great match.” Ryder negotiated the lease for Cummings, whereas Benincasa and Chief Executive Officer Michael Prior represented their firm in-house.

Besides describing the lease as “beyond five years,” Ryder did not divulge details of the agreement. Office space in the North Shore market is averaging about $20.05 per sf, according to Jones Lang LaSalle, which puts the submarket’s vacancy rate at 16.6 percent as of mid-year, slightly below the overall market rate of 17.5 percent.

The ATN lease brings Cummings Center to 85 percent occupancy, and represents a rare instance of late where a firm has agreed to relocate. Typically, existing landlords have been able to craft a deal favorable enough to keep a tenant in tow, but Cummings Center overcame that challenge plus other regional alternatives viewed by the firm. “They had some feelers out,” concurs Ryder, adding he believes a competitive rate and bevy of amenities ATN employees were used to in downtown Salem were also factors in winning the company over to the Beverly alternative.

“You can get your dry cleaning done, go to the doctor’s office, there’s child care right here and six eating options to choose from,” notes Ryder, as well as full-service banks, fitness centers and on-site transit connections.

ATN is not alone in targeting Cummings Center. At least two other deals are on the verge of being inked, Ryder says, and there is optimism that the activity level will increase once the normally torpid summer season is complete. As it is, “this August has been better than last August,” offers Ryder, adding, “It seems like a lot of people are at the point where they feel they need to do something.”

The Weekly Real Report September 2, 2010

Taking it Back

BRAINTREE—Whether nostalgia had anything to do with it is uncertain, but industrial real estate giant AMB Property Corp. has supposedly opted to retain a 1.3-million-sf portfolio of CRE assets located in southeastern Massachusetts. As initially detailed by The Real Reporter two months ago, AMB hired Eastdil Secured to harvest properties in Braintree, Canton and Stoughton.

Comprised largely of older flex/industrial structures, the buildings are said to be substantially occupied with many long-term leases in place. The largest is 175 Campanelli  Pkwy in Braintree, a 485,000-sf behemoth leased to United Liquors, followed by the 345,000-sf warehouse at 675 Canton Ave. in Canton. Having recently undergone an extensive overhaul, 175 Campanelli Pkwy. alone is assessed at $16.8 million, according to town records.

As conveyed in the original article in early July, Stoughton properties that were being peddled by AMB include 12, 100 and 179 Campanelli Pkwy. Those and 200 Shuman Ave. were among several buildings purchased in a $44 million portfolio buy from the Campanelli Cos. in March 1998. Featuring 357,000 sf, 100 Campanelli Pkwy. is assessed at $6.6 million by the town of Stoughton, whereas the single-story, 157,000-sf warehouse at 200 Shuman Ave. is valued at $5.98 million.

On the smaller scale, 179 Campanelli Pkwy. has 55,000 sf of warehouse space and sits on 5.2 acres. Constructed in 1984, that building is assessed at $2.4 million. Twelve Campanelli Pkwy., is a 51,000-sf warehouse constructed in 1969 that is valued at $2.7 million.

Calls to Eastdil Secured were not returned and efforts to contact AMB by press deadline were unsuccessful. Multiple sources concurred that the portfolio has been pulled, however, even though one maintains there was interest among prospective buyers, some seeking one-off transactions and others chasing the entire package. “It’s hard to say,” accedes that source as to deciphering the motive. Also difficult to assess is whether the pricing met AMB’s expectations, but observers say stabilized industrial properties are popular in a risk-averse environment. “That’s surprising,” one broker spoken to says of AMB’s shift in strategy while noting that the California-based REIT’s global portfolio of 156 million sf makes the Bay State package a minor matter at that end.

Press Pause

BOSTON—Principals of Vornado Realty Trust have already shown locals from Mayor Thomas M. Menino on down that they know how to dig a big hole in the ground, and the REIT’s Gotham-based leaders are now displaying a willingness to dig in their heels just as deeply, with industry sources maintaining Vornado is still among the bidders in the hunt for Boston’s landmark John Hancock Tower. “Yes, they are,” confirms one source after a second round of offers was held last week by the asset’s brokers, Cushman & Wakefield’s Capital Markets Group. As first revealed last month by therealreporter.com, Vornado is among several top-level CRE investors vying to acquire the iconic 60-story tower and ancillary assets such as a Back Bay parking garage. Other heavyweights on the prowl include Boston Properties and Beacon Capital Partners, two homegrown operations bearing the wherewithal to compete for a property that some say could exceed $925 million in pricing. Beacon, in fact, previously owned the tower before selling it to Broadway Real Estate Partners, a $1.3 billion deal that ended in disaster for Broadway, with the tower taken back last year by its lender and ultimately auctioned off to current owners Normandy Real Estate Partners and Five Mile Capital.

As for Vornado, the entity certainly has the ability to consume such a large asset, precisely the point that stoked the ire of Menino upon learning that the REIT was angling to buy the asset. Menino is in the midst of a high-profile battle involving Vornado’s unwillingness to proceed on construction of the Filene’s Department Store renovation in the Hub’s Downtown Crossing district. That venture has left a gaping hole and aura of blight permeating the once-bustling shopping area, conditions Menino has railed against and vilified Vornado for creating. The city is presently threatening to revoke the $700 million project’s construction permits.

For the second at least, the best advice for all involved could be to exercise patience on the Hancock aspect of the imbroglio. “It’s dead,” one source says of progress on the bidding, with the Labor Day weekend apparently slowing down a heretofore spirited competition that the source claims still has at least seven serious contenders. “It’s incredible,” the source says of the activity that also reportedly includes an overseas suitor. The tower’s popularity is so deep that it apparently thwarted a plan to winnow the finalists down to five after the second round last week.

One issue stemming from the sales effort is whether the current owners can retain a partial stake as desired, and like everything else in the process, that also remains undetermined. One source maintains some of the finalists would accept such an arrangement, whereas others supposedly want to own it outright. As for Menino’s favorite outcome, that source maintains the choice is clear: “Anybody but Vornado.”

Boston Properties Dodges Bullet, Seen Keeping Zoll in Chelmsford

By Joe Clements

CHELMSFORD—After a space quest that pushed over the New Hampshire border and south to Route 128, Zoll Medical Corp. has reportedly agreed to renew its lease at the Quorum Office Park, a gleaming 260,000-sf complex where the homegrown healthcare company has been headquartered since 2003. A letter of intent has been “fully executed” by Zoll and landlord Boston Properties, according to one source who anticipates a formal agreement for more than 250,000 sf could be signed by mid-September.

“They are staying,” concurs another market observer who maintains Boston Properties returned with an aggressively revised bid once Zoll showed it was serious about moving on as a way to keep occupancy costs in check. The tenant had been enjoying bargain-basement rents close to $7 per sf thanks to a sublease deal struck with master tenant Tellabs, a telecommunications firm that paid upwards of $18 per sf 10 years ago on a build-to-suit complex it never occupied.

As previously detailed by The Real Reporter, Zoll was for months on the verge of relocating to a Lowell facility owned by Winstanley Enterprises. That agreement for another single-digit rate was countered when Boston Properties cut its initial offer to be in the $11- to $12-per-sf sphere. One source says the REIT initially was seeking closer to $15 per sf. The substantial gap that remains between the Winstanley deal and Boston Properties can be justified due to the quality of product, opines the broker. “It’s the nicest building up there,” the broker says of Quorum Office Park, which is located at 269 Mill Rd.

At this point, both sides are remaining mum on the leasing situation. Boston Properties spokeswoman Arista Joyner declined comment, while efforts to contact FHO Partners principal Brian Hines and other members of the tenant leasing team were unsuccessful by press deadline. Joining Hines as an advisor for Zoll is Michael Dalton, the same team that last year represented Avid Technologies in its relocation to Burlington.

The Quorum pact if consummated will be a substantial victory for the landlord, Interstate 495 North and the state overall, says one industry professional. Early on in its space search, Zoll had eyed at least one Granite State venue near Manchester, potentially shipping hundreds of jobs across the border if that route had been pursued. That does not seem to be a threat anymore, according to one broker who predicts Boston Properties will be able to get the deal across the finish line. “It looks real good,” says the source.

Mixed Results Promised in Boston Realty Advisors Hire of David Friedberg

By Joe Clements

BOSTON—In hiring industry heavyweight David Friedberg as CEO of its residential division, Boston Realty Advisors is sending a clear mixed message about the firm’s dual-pronged approach to real estate. Having offered commercial and residential expertise since his shop’s inception in 2001, the high-level addition underscores that BRA is committed to both arenas, Weissman explains, terming Friedberg “the best of the best” on the residential front, especially the luxury condominium sector in which BRA is already a significant player.

“We want to get a bigger piece of the pie,” Weissman says of a $90 million market fee-wise in which BRA counts itself third behind Tracy Campion and Otis & Ahearn among local independents. Even against those formidable opponents—“Tracy is a category killer in Boston,” accedes Weissman—he says “David is going to help us be the best.”

A real estate professional since 1982, Friedberg’s signature achievement was his turnaround of Coldwell Banker’s Brookline office, growing the operation from a 20-broker office upon his arrival in 1993 to 120 strong and becoming parent company NRT/Realogy’s most profitable agency in New England. Every year as manager, the former president of the Greater Boston Association of Realtors earned NRT/Realogy’s President’s Council designation for being in the top 20 percent of all 900-plus offices nationally.

The union comes at a crossroads for both Friedberg and BRA, the pair tells The Real Reporter, with one looking for “new challenges” and the company wanting to bring in a proven producer who could enable Weissman and partner William H. Catlin Jr. to focus on the commercial real estate market.

Friedberg says he views the BRA opportunity as different from taking over the Brookline CB office because many of the elements needed to compete are already in place. On top of a database featuring 40,000 clients and contacts, BRA proves itself as a new millennium company by having a deep technology infrastructure, Friedberg relays. Add in a stable of proven brokers and hands-on leadership and Friedberg says BRA has “the energy and resources” necessary to increase market share in the city and expand into top suburban communities. “I feel very good about where we are and our ability to grow,” he says. “There’s a real passion and a focus to make it happen.”

Besides increased revenues, there are advantages to serving both sectors, according to Friedberg, including enhanced opportunities to tap into the corporate relocation market that continues to emerge. Having done work in that field at CB through NRT/Realogy’s booming relocation business, Friedberg says he thinks BRA’s commercial base could yield clients from there as well.

“There’s a lot of synergy from doing both,” concurs Weissman, adding he is “perplexed” that most real estate firms go in just one direction. Given the rise of smart-growth communities that blend housing with retail and office space, Weissman portends an even greater need for dual knowledge. “There is no firm better prepared to represent mixed-use developments than us,” he offers. “We can put it all together, and that is definitely an advantage.” Further, BRA’s investment sales team can assist in selling income-producing assets, notes Weissman, with the company specializing in CRE trading up to $10 million.

Besides the Friedberg hire, BRA has been advancing in other ways this summer, recently moving a few doors down from its previous office into an expanded headquarters at 745 Boylston St. and stepping up its presence in the real estate auction industry through an alliance with Quincy gaveler Daniel J. Flynn and the operation’s in-house auction ace, Jeremy Fried. “We are really excited,” Weissman says of the firm that will celebrate its 10^th anniversary in a few months.

The Weekly Real Report: August 27, 2010

Whither Wyman

WALTHAM—Not quite sure of the pronunciation, but it is spelled Dassault Systemes, and the French-based software company has been on the tip of every office landlord’s tongue throughout suburban Boston for months given a lease requirement estimated at upwards of 275,000 sf. Guided by brokers from Jones Lang LaSalle, the parent company of Concord-based SolidWorks and MatrixOne in Lowell has been seeking a new home to consolidate those operations, mulling at least a half-dozen prospects that include both existing and customized ground-up projects.

According to market observers, the final choice has been winnowed to a build-to-suit proposal by the Nordblom Co. at Network Drive in Burlington and 175 Wyman St. in Waltham, a low-rise office campus situated at what has been coined the “Main and Main” of Route 128. Hobbs Brook Management, owners of the office park next door, developed 335,000 sf of speculative space overlooking the Cambridge Reservoir, a sprawling site that offers an ornate setting, Class A space and a plethora of modern amenities. “Anybody would want to work there,” opines one leasing professional familiar with the asset.

Another source went so far this week as to claim Hobbs Brook has won the spirited competition for Dassault at a rate said to be in the mid- to upper-$30’s per sf. Others are not so sure of that decree, however, claiming Dassault still has time to consider other strategies—even a do-nothing approach of renewing as the majority of office tenants have done regionally during the past year. “If they aren’t looking at it, they should be,” counseled one broker who predicts the current landlords will not give up without a fight. That would include industry heavyweight Normandy Real Estate Partners, owner of the 300 Baker Ave. property in Concord where SolidWorks occupies more than 200,000 sf.

Efforts to contact Normandy and 300 Baker Ave.’s exclusive leasing agents at Colliers Meredith & Grew were unsuccessful by press deadline. Also not around were Hobbs Brook principals and their leasing agents from Wyman Street Advisors, or JLL brokers Alex Dauria and Brendan Callahan, who have led the space search. Depending on how far along negotiations are, Normandy could still make a late-minute surge similar to that which occurred with Boston Properties and Zoll Medical Corp. (see story, page one). “If they do it right, absolutely,” one broker says of the landlord convincing SolidWorks to stay put. Tens of millions of dollars could be saved by renewing, estimates the market expert, who pegs rents at 300 Baker Ave.  in the low $20’s per sf. Moving hassles and employee attrition are other factors that have supposedly contributed to the renewal phenomenon. “It’s very rare you have a company come off Interstate 495 down to Route 128,” offers the broker. “It can be really disruptive to the employees.”

Uplifting

BOSTON—Personnel-wise, 2010 has been a busy summer for CBT Architects, with founding principal Richard J. Bertman last week announcing the promotions of 17 staffers “who have made significant contributions to the growth and success of the firm and will act as its future leaders.” One of New England’s top architectural practices, CBT promoted five to the post of Senior Associate and 12 more were named Associate.

“CBT’s greatest strengths is the skill and talent of its staff,” Bertman says in a press release. The new senior directors are: Joe Bettencourt, Eileen Casciari, Adrian LeBuffe, Sharon Steinberg and Andrew Wang, experts who have already worked on a variety of the firm’s award-winning commissions across a range of disciplines, including historic renovations, hospitality, interior design, office and retail.

Newly named Associates of CBT are: John Bedell, Mark Bourassa, Henry Celli, Matt Francke, Monte French, Virendra Kallianpur, Jennifer Miller, Michael Moore, Chad Morig, Elizabeth Peterson, Jeremy Schwartz and Kristi Sprinkel.

According to Bertman, the promotions are especially deserving this year given the challenging environment facing industry practitioners on the back end of the recession, the worse crash he has encountered in 40-plus years in the trade. CBT is among many firms forced to lay off staff in the difficult climate, and thin returns have kept salaries and bonuses equally scant. Through it all, Bertman says, CBT employees have kept their attitude upbeat and productive. “They have been ready and willing to pitch in and help,” he says. “This is one way we can let them know how much we appreciate all the hard work.”

Chelmsford Property Hits Sales Block After Comcast Renews for 98,000 SF; Eastdil Hired for Listing

By Joe Clements

CHELMSFORD—The more things stay the same at 330 Billerica Rd., the more they change. In the wake of Principal Life Insurance Co. renewing tenant Comcast for all 98,000 sf, sources indicate Eastdil Secured has been hired to market the two-story office building that abuts Route 3 southbound near Omni Way. Principal acquired 330 Billerica Rd. in Jan. 1997 for $6.1 million.

“Yes,” says one veteran broker in affirming other reports of Principal’s intentions. An asking price has not been set, but estimates are that 330 Billerica Rd. could yield between $12 million and $15 million, encouraging given a laggard climate for suburban assets. Comcast’s five-year renewal is the linchpin, conveys the broker, as having a solid tenant provides comfort for stability minded investors. CresaPartners and Lincoln Property Co. orchestrated  the lease negotiations.

Calls to Eastdil Secured to discuss the sales assignment were not returned. The Boston Capital Markets Group is led by Peter Joseph, Sarah Lagosh, James McCaffrey and Christopher Phaneuf. Lincoln SVP Kevin Malloy, who represented Principal along with Lincoln colleague Timothy Latham, did confirm the lease signing. CresaPartners broker Mitchell Jacoby was agent for Comcast, but was unavailable to discuss the matter.

Comcast was a coveted target of Route 3 landlords as the lease expiration date neared, but ultimately came to terms with Iowa-based Principal. “The building really works for them,” says Malloy, who also joined Latham five years ago in a previous renewal of the original lease. Accessibility, ample parking and ongoing upgrades are among 330 Billerica Rd.’s attractions, according to Malloy. Downtown Lowell is a quick drive north, and Route 128 is within 10 miles south on the expanded Route 3 corridor.

That thoroughfare is lined by office and flex buildings shuttered by the latest and prior economic busts dating back a decade, enhancing the significance of Comcast’s commitment. “The market is slowly heating up, but there are still a lot of vacancies,” acknowledges Malloy. The quality of 330 Billerica Rd. helped differentiate it from alternatives, he says, consistent with a tenant preference to go best-in-class in the space-flush suburban office sector.

Tracking 6.3 million sf, LPC puts the Route 3 North corridor at a flaccid 26.7 percent availability even after registering positive net absorption of 142,500 sf through mid-year, the highest level among eight submarkets in the firm’s survey. The Comcast lease will not impact absorption going forward, but Malloy says it is nonetheless a boost for the area given it keeps another substantial block of space hitting the streets.

Mission Accomplished in $7.3M Hub Sale as Cushman & Wakefield Sells 40-Unit Boston Portfolio

By Joe Clements

BOSTON—Suddenly, Beacon Hill is not the Hub’s only money mound from a real estate perspective, or so it would seem from a $7.3 million trade of four apartment buildings on Mission Hill. Concord-based Bruce Enterprises  LLC purchased 40 units in a deal orchestrated by Cushman & Wakefield’s multifamily division and with financing from South Shore Savings Bank. C&W has now been pegged to separately peddle another package of 18 units on Mission Hill.

“Investors really like that market,” relays C&W broker Christopher D. Sower, who handled the so-called Longwood Portfolio on behalf of a partnership that bought the buildings in Feb. 2007 for a collective $5.4 million. The buildings are 197 Calumet St. and 256 Parker Hill Ave., plus 9 and 10 Copenger St. Sower brokered the deal with C&W Executive Directors Simon Butler and Biria St. John, among the northeast’s leading multifamily sales teams. The marketing campaign yielded some 80 inquiries and nearly 20 tours before Bruce Enterprises emerged the winner, and Sower says many of the same prospects are now eyeing the smaller portfolio in five buildings scattered across Mission Hill.

Sower credits the location in an eclectic district as one key attraction. The Longwood Portfolio is routinely at 100 percent occupancy, he says, feeding off workers in the nearby Longwood Medical Area, plus students from expanding Northeastern University and young professionals who can connect to downtown Boston via the Green Line trolley on Huntington Avenue. “Proximity to the Longwood Medical Area is the big driver,” says Sowers, adding that the sellers further enhanced the properties through renovations of nearly half the units. “It’s a market play and a renovation play” for the buyer, says Sower, enabling the firm whose principal is Jeffrey R. Bruce to increase rents by completing the upgrades.

Cornerstone Realty Consultants principal Paul Natalizio and Brett Pagani arranged the financing for Bruce Enterprises. “A good borrower and good real estate” fueled competition among lenders, says Cornerstone principal Paul Natalizio. “They were attracted by the entire package,” says Natalizio, whose Malden-based firm last year assisted Bruce Enterprises in funding a separate multifamily deal in Westfield.

Lenders have been loyal to the multifamily sector in 2010, relays Natalizio. Having already completed a string of acquisition financings and working on several more in the pipeline, Cornerstone recently engaged South Shore Savings Bank on a $1 million loan for another investor who purchased 14 Cumberland St. in Boston. That mortgage on behalf of Yousef Realty Trust is an eight-year, fixed-rate loan at 5.85 percent with a 30-year amortization and loan-to-value of 80 percent.

The Longwood Portfolio is actually funded by two loans that equate to an LTV of about 75 percent and interest rate of 5.0 percent on a 30-year schedule. The trade amounts to a capitalization rate of just under 7 percent. Due to a paperwork issue, 9 and 10 Copenger St. were delayed briefly in their closing, whereas 197 Calumet St. and 256 Parker Hill Ave. have already changed hands. Those units sold at about $175,000 per key, compared to $220,000 for the eight apartments at 9 and 10 Copenger St.

C&W, meanwhile, is turning its attention to the so-called Mission Hill Portfolio that covers 126 Calumet St., 36 Cherokee St., 8 Oswald St., 731 and 737 Parker St. and 178 St. Alphonsus St. The properties are all three-story buildings and have been already upgraded.

Also fully occupied, the holdings yield nearly $725,000 in annual gross income. “We’re just starting on it,” Sower says, but he relays early indications are for another robust response. One possible attraction in the package is an in-place, non-recourse loan with an original balance of $5.31 million fixed at 6.5 percent through 2018.

The Weekly Real Reort August 19, 2010

A New Adventure

MEDFORD—It looks like the adventure is about to begin for Ocean State Job Lot here in Boston’s inner suburbs. The discount retail chain that has proven a savior for shuttered storefronts throughout New England during the past year has closed on 30 Commercial St. in Medford for $6.1 million. Touted as “The Home of Adventure Shopping,” Ocean State acquired Medford’s former Stop & Shop building from the Quincy based supermarket giant.

While local CRE watchers spoken to say they were unaware of the Rhode Island-based company’s strategy, and calls to the firm by The Real Report were not returned as of press deadline, past transactions would suggest Ocean State officials are focused on bringing its expanding retail footprint to the Medford market. Last autumn, the ink was barely dry on Ocean State’s $3.5 million purchase of a former Circuit City in Portsmouth, NH, before the doors were open welcoming Seacoast shoppers and the occasional job seeker incorrectly assuming they were entering an employment agency.

Branding confusion aside, Ocean State Job Lot has moved deftly and swiftly to become a force in parts of New England whose similar retailing approach was heretofore found at the likes of category killer Building 19, Spag’s in the Worcester market and Maine’s own value version, Marden’s. The Ocean State Job Lot website indicates there are 97 stores presently, mostly concentrated in its home state and southeastern Massachusetts, but expansion appears to be progressing into Connecticut, Maine and New Hampshire.

The Medford asset is a former retail property estimated to contain just over 50,000 sf. While Ocean State’s plans have not yet emerged, one broker who has worked with the firm in the past predicts the structure is about to come to life. “Lightning-speed,” the broker says of Ocean State’s business mindset. Slightly larger than certain units such as the 36,000-sf Portsmouth store, 30 Commercial St. offers plentiful parking on its 5.2-acre site, ranked among Ocean State’s big requirements when scoping out new locations.

Auburn Highlights

AUBURN—You won’t get it from them, given the firm’s low media profile, but Eastdil Secured’s Capital Markets Group participated in the recent $42 million refinancing of the Auburn Mall on behalf of Simon Property Group. A division of Deutsche Bank, German American Capital Corp. provided the new debt for 385 and 441 Southbridge St. The mall has undergone multiple lineup changes and faced physical issues in recent years, but one retail expert says the property “is holding its own” up against the tough economy and thanks to the guidance of retail giant Simon Property.

Eastdil’s Boston team is led by Peter Joseph, Sarah Lagosh, James McCaffrey and Christopher Phaneuf. Calls to discuss the Auburn assignment were not returned, but one source spoken to says the firm is actively assisting multiple clients on financing issues in addition to its growing investment sales practice. Presently, Eastdil is marketing the Bay Colony Corporate Center in Waltham among other listings such as 400 Fifth Ave. in Waltham and 330 Billerica Rd. in Chelmsford (see story, page one.)

Channel Change Has Davis Cos. Out, Synergy in on $40M Leventhal Trade of 253 Summer St

BOSTON—There has been a sudden shift in the bid to unload 253 Summer St. and several abutting office buildings on Melcher Street, a 175,000-sf conglomeration of space overlooking Fort Point Channel. According to industry sources, Synergy Investment & Development has agreed to pay just over $40 million to secure the curved, multi-building package being marketed by Cushman & Wakefield, properties that a partnership of the Norman B. Leventhal family acquired five years ago for $34 million.

As The Real Reporter first unveiled last month, the Davis Cos. of Boston beat out several competitors in a spirited summertime chase for the well-regarded holdings, but sources say that local firm has now been supplanted by Synergy, an active player in Hub CRE circles since 2005. Other Synergy conquests include 211 Congress St., 4 Liberty Sq. and 100 Franklin St., all in Boston’s Financial District, plus 100 North Washington St. in North Station and 10 Fawcett St. in Cambridge.

Synergy’s fast-paced growth platform was stunted by the CRE crash of September 2008, and a ceaseless flow of capital from founder David Greaney’s Irish homeland that paced foreign activity in Boston through 2007 has been almost entirely choked off following the Emerald Isle’s own economic meltdown. As much as any group, however, Synergy has continued to pursue deals. Earlier this spring, Greaney deployed $6 million from Digital Federal Credit Union to secure 101 Summer St., a 60,000-sf office/retail property just five minutes away from 253 Summer St.

Calls to brokers at Cushman & Wakefield’s Capital Markets Group were not returned by press deadline. Also keeping silent are Greaney and Davis CEO Jonathan G. Davis, each declining comment when contacted this week, but sources support the idea that Synergy has taken on the 253 Summer St. opportunity. “They’ve got it,” insists a market watcher who claims an overseas backer is participating. One source identifies Greaney’s partner as Mario Valdivia, said to be an investor from South America, but further information could not be provided.

Another industry contact says the Davis deal was not derailed due to a monetary dispute, but declined to elaborate on the cause. One reason for confidence in the Synergy negotiations holding up is the firm’s impressive track record for closing on properties they commit to, adds the source, although the Davis Cos. has been equally adept in that regard, having already finalized multiple deals nationally thus far in 2010 through a $230 million opportunity fund. Condos in Boston and the suburban Burlington Woods office park are among the regional ventures undertaken by the Davis Cos. this year.

As previously detailed in earlier articles, the Fort Point Channel buildings are anchored by 90,000 sf of Class A space at 253 Summer St., a 108-year-old former warehouse abutting the Summer Street Bridge that leads to South Station and the Financial District. Brokers say it commands among the best rents in the Seaport District that includes Fort Point Channel, a submarket whose average Class A asking rate is $34.47 per sf, according to Jones Lang LaSalle’s mid-year survey.

The timing for 253 Summer St. to trade remains unclear, with one expert explaining it could take a bit longer since assumption of debt is one element of the transaction. Pricing does slightly exceed the $40 million target, suggesting little difference between Synergy’s bid and the Davis Cos. top offer that was pegged between $40 million and $41 million.

Besides 253 Summer St., other buildings being harvested are 11-17, 19-27 and 29 Melcher St. Managers of the Boston HSR South Boston LLC trust that acquired the assets in 2005 are Alan M. Leventhal and Mark S. Leventhal, whose family is the force behind Beacon Capital Partners, one of the nation’s leading real estate companies.