Greater Boston Annual Investment Review

ANNUAL

BOSTON REAL STRONG THE 2013 INVESTMENT REVIEW ISSUE

LENDER BENDER

04

HOUSING FIRST

08

RETAIL REGISTERS

10

A Comprehensive Report On Greater Boston’s Commercial Real Estate Investments

Derek Szabo

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cover photo:

UNIVERSAL APPEAL

2013 RESULTS 27 CLOSED TRANSACTIONS VALUED AT $2.9 BILLION in the Greater Boston Region

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

JV/RECAP

PROPERTY SALE

PROPERTY SALE

PROPERTY SALE

ONE POST OFFICE SQUARE

THE BOSTON PARK PLAZA & TOWERS BOSTON, MA

CAMBRIDGE, MA

RIVERVIEW

10 BROOKLINE PLACE

OFFICE

HOTEL

OFFICE/LAB

OFFICE

PROPERTY SALE

PROPERTY SALE

PROPERTY SALE

PROPERTY SALE

99 SUMMER STREET

BURLINGTON CENTRE

200 UNICORN PARK

BACK BAY LUXURY PORTFOLIO

OFFICE

OFFICE

MEDICAL OFFICE

RETAIL/MIXED-USE

PROPERTY SALE

PROPERTY SALE

LOAN SALE

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125 & 150 CAMBRIDGE PARK DR.

CENTER AT HOBBS BROOK*

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COURTYARD BOSTON LOGAN AIRPORT*

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METRONORTH BUSINESS CENTER

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PROPERTY SALE

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MALL AT WHITNEY FIELD

45 MILK STREET

8 PRESIDENTIAL WAY

120 TURNPIKE ROAD

RETAIL

OFFICE

OFFICE

OFFICE

BOSTON, MA

BOSTON, MA

BURLINGTON, MA

CAMBRIDGE, MA

LEOMINSTER, MA

BURLINGTON, MA

BOSTON, MA

BOSTON, MA

BOSTON, MA

WOBURN, MA

BOSTON, MA

BURLINGTON, MA

WOBURN, MA

BROOKLINE, MA

BOSTON, MA

STURBRIDGE, MA

WOBURN, MA

SOUTHBOROUGH, MA

WE WOULD LIKE TO THANK OUR CLIENTS FOR THEIR CONTINUED TRUST AND CONFIDENCE /&8 :03, r -04 "/(&-&4 r 8"4)*/(50/ % $ r 4"/ '3"/$*4$0 r $)*$"(0 r "5-"/5" r #0450/ r %"--"4 r )0/( ,0/( r -0/%0/

THE ANNUAL REVIEW

THE REAL REPORTER ®

3

On Top of the World in 2013

BY JOE CLEMENTS OSTON — The 99 percenters, 49 percenters and 1 percenters computed to a record-breaking year for Greater Boston commercial real estate sales in 2013—by JLL estimates drawing $5 billion off a coalition of institutional funds, overseas capital grabbing minority positions in Hub office towers and high net worth money seeking havens in the center of New England’s resilient, knowledge- CENTER PLAZA, BOSTON MA based economy.

“We like Boston a lot,” says TIAA-CREF Acquisitions Director Sam Flood, whose Gotham-based pension fund has a long legacy in Boston using capital amassed from the retirement accounts of educators across the land to own such towers as 33 Arch St., One Boston Place and 99 High St. THOMAS M.ALPERIN MAURA MOFFATT STUART SHIFF The ardor led to a late December purchase of 51 Sleeper St. at a then-record price in the million doled out for downtown’s 40 Broad St. white-hot Seaport District, and Flood unabashed- earlier in 2013. “We’d like to buy more,” Flood ly defends the $60.2 million purchase of that tells the Real Reporter in acceding such a 150,300-sf office building and another $110.0 prospect is easier said than done now that the

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entire world has caught wind of Boston’s rapidly rising tide.

“Everybody was in on that one,” Flood notes of the battle for Broad Street in a trade negotiated by JLL that proved to be the third priciest Boston office building sale of 2013 despite being classified a Class B property.

“We have a lot more people operating in our space today than there used to be,” agrees Synergy Investments principal Maura Griffith Moffatt, whose homegrown firm founded by David Greaney 10 years ago has methodically built a Bostoncentric portfolio exceeding three million sf, nearly all Class B office space picked up far below the going-in rate mandated today.

According to JLL’s latest tower report compiled by Director of Research Lori Mabardi, Class B rents are getting so frothy they are approaching the rate found for low-rise Class A space that is averaging $49.54 per sf, that mark a 10 percent gain over 2012. The trend has sent Class B CRE values in the city up continued on page 52

Brokers Bring in the Business

BY JOE CLEMENTS OSTON — It sounds like a broken record, but 2013 was a year for broken records throughout New ROBERT E. GRIFFIN JR. England’s office market, a season of firsts among the $3.0 billion of building sales

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BROKERAGE C&W’s Championship Season SEE PAGE 51

completed inside Route 128 where that marquee product type was as coveted as EDWARD C. MAHER JR. any on the planet. With yield-driven and core investors equally stoked to get in on the action, plus Blackstone harvesting Greater Boston holdings by the barrel full, several notable high-water bests were crested in 2013, a few multiple times. Many chart-busters involved the Blackstone fiefdom which accounted for MATTHEW E. PULLEN more than one billion dollars in sales vol-

WELLESLEY OFFICE PARK, WELLESLEY MA

ume alone, capped by the $307 million transfer of Boston’s Center Plaza to Shorenstein Properties as the clock ticked down into 2014.

“That was the big news,” observes Cushman & Wakefield Vice-Chairman Edward C. Maher Jr. “The Blackstone

impact was very significant in 2013.”

Maher should know as a leader of the Capital Markets Group whose dispatch of Center Plaza put C&W’s operation above $2.0 billion for the year, most among regional peers. Center Plaza continued on page 56

THE ANNUAL REVIEW

4

THE REAL REPORTER ®

Independents Have Their Day

BY JOE CLEMENTS OSTON — In terms of commercial real estate sales brokerage, independent firms more than held their ground in 2013.

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MICHAEL D’HEMECOURT

BROKERAGE

“The platform continues to grow,” Boston Realty Advisors founder Jason S. Weissman says after 12 years in business, encouraging news given there was far less national competition when he CHRISTOPHER SOWER launched the Boston-based firm. BRA has, in fact, grabbed talent from larger shops including Cushman & Wakefield to complement its existing stable of professionals schooled in various categories including industrial, multifamily, office and JASON WEISSMAN retail. “Those are the core

39 JFK ST., CAMBRIDGE MA

areas we continue to focus on and are continuing to expand,” says Weissman.

BRA geographically is in a realm chock full of competitors, its Boylston Street headquarters in a district up against other private firms including Boston Urban Partners, the Dartmouth Co. and UrbanMeritage, and they all must contend with

the national powerhouses who are equally willing to chase down smaller listings, especially following the brutal downturn of 2008 that crippled New England’s sales sector. Even C&W has a dedicated Middle Markets unit, and JLL has shown a willingness to troll in shallow depths continued on page 64

Pros Helping Steer CRE Capital RIAZ CASSUM

BY JOE CLEMENTS OSTON — Commercial real estate capital and the developers, investors and landlords who crave it were brought together early and often in

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FINANCE HFF D&E Tops $2.8B SEE PAGE 72

JON SCHNEIDER

JAY WAGNER

2013 through a variety of vehicles, at times via the direct route but increasingly using mortgage bankers or in-house debt and equity professionals, which a growing number of CRE service companies are making available to sort out myriad debt and struc-

THE BLOCK ON CONGRESS, BOSTON MA

tured finance options or access hard-to-secure lenders. Boston is well-represented in both camps and most spoken to report record or nearly unprecedented results in 2013 as low interest rates, a vibrant regional economy and Boston’s thriving investment market drew borrowers out in droves, joined by a growing stripe seeking construction loans, a new wrinkle with the recession having faded.

Holliday Fenoglio Fowler racked up an astounding $2.8 billion in debt and equity placement for the year after overseeing a wave of nine-figure construction loans and other massive mortgages for acquisition and re-financings.

Senior Managing Director Riaz Cassum led the Boston office as the team easily outpaced all comers in that realm, with the group also playing a major role on the investment sales front, trading close to $1 billion for that sector and setting major market records on landmark assignments along the way (see story, lead page). continued on page 68

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THE ANNUAL REVIEW

THE REAL REPORTER ®

Lenders Treasure Active 2013

BY MIKE HOBAN OSTON — While a big banking story of 2013 was 10 Year Treasuries—which entered the New Year at 1.91 percent and closed on Dec. 31st at 3.04 percent, a jump of 113 basis points—the real impact on CRE lending was felt by the rush of owners aiming to refinance before LENDING the rates make a permanent shift upward. Those concerns have yet to take hold (10-Year Treasuries were 2.62 percent at press time), yet lenders recount an atypically large portion of last year’s business was generated by refinancings.

“Last year was a crazy year,” recalls Goedecke & Co. namesake Peter L. Goedecke “It was re-fi heaven, because you had people who were concerned that rates were going to go up, you had banks finally encouraging folks to move out . . . and ending the extending and pretending.

DUDLEY BENOIT So there was a lot of demand and a lot of supply. It was historic from that standpoint.”

Goedecke’s Boston-based firm arranged $1.28 billion in financing in 2013, with refis accounting for approximately 80 percent.

Goedecke describes the financing business as “sort of a three-legged stool” with one being re-financing, the second new construction and the third acquisition financing. “There wasn’t much construction except apartments, and we did a fair amount of that, and acquisition financing was down a little bit, at least for us,” Goedecke reports. “A lot of the acquisitions were done by major players and may have been non-leveraged as a result because they were core assets, and the cap rates kept compressing.”

DARRYL J. FESS TD Bank Regional Director of Commercial Real Estate Peter Brockelman says concerns over the impending Treasuries increase have translated into refinancing momentum into 2014 as well. “Folks are seeing the 10-year bump up against that 3.0 percent mark, and while I don’t think the 3.0 percent was a strong quantitative trigger, I think it was a psychological barrier that just

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ONE WINTHROP SQ., BOSTON MA

brought it to the forefront of folks’ thinking. So if they’re in a position to put things away and lock up the rates, now is not a bad time to do it.”

The rise in treasuries was not the only lending story of 2013, as commercial mortgage backed securities stormed back into the picture, nearly doubling last year.

Domestic CMBS issuance for 2013 crested $86 billion in 2013, a 78-percent increase from the $48.4 billion in issuance recorded PETER L. GOEDECKE in 2012. Goedecke & Co. did more than $500 million in CMBS funding last year and New York-based CMBS specialist Cantor Commercial Real Estate Lending completed two deals in the Bay State in the second half of 2013—$24 million to refinance a pair of apartment complexes in Worcester for an affiliate of Boston-based Mayo group, and an $11.5 million deal for Anchor Self Storage of Mashpee. The biggest categories for CMBS financing were “B+ industrial and B apartment portfolios,” Peter Goedecke says, but his firm also financed a shopping center that was “not core by virtue of location, but stabilized enough so that cash flows were there so that you could do CMBS.” The LTV on that deal was 75 percent, “but it wasn’t really ready for life companies at those levels and a bank wouldn’t have

gone past 65 (percent),” he conveys, adding that a high percentage of the CMBS loans last year included mezzanine financing, bringing many of the deals to an 85 percent LTV. The flip side to CMBS lending was financing done for mostly core deals by the life companies, which made their presence felt locally in the second half of 2013. In the last six months, Prudential did four deals totaling $227 million in multifamily financing, $114 million of that for the AIMCO apartment building at North Station, plus an additional $215 million for the refinancing of Stony Brook Office Park in Waltham for Clarion Partners, and a loan to develop a new headquarters for New Balance in Brighton. Hartford Life Insurance Co. refinanced a pair of apartment complexes at $34 million and $40 million for the Hamilton Cos., whose president, Carl Valeri, has been a vociferous advocate of refinancing CLAUDIA PIPER the firm’s extensive portfolio in the current environment. AXA Equitable Life Insurance Co. provided $123.6 million for construction of the Abbey Group’s 18-story, 342 apartment project the Veridian in Boston’s Fenway, and New York Life Insurance Co. provided a $50 million mortgage for the $110.0 million acquisition of 40 Broad St. Boston by continued on page 74

CUSHMAN & WAKEFIELDâ&#x20AC;&#x2122;S

BOSTON CAPITAL MARKETS GROUP WOULD LIKE TO SAY

thank

you so very

much

AEW Capital Management LP

J&M Realty Trust

Alexandria Real Estate Equities

KDR Family LLC

Blackstone/Equity Office Properties

LNR Partners

Boston Properties

Marcus Partners

Campanelli Companies

Meritage Properties

Capital Properties Cynosure The Davis Companies Deutsche Bank Asset Management Eastern Real Estate Edens Equus Capital Partners Foulger-Pratt

Normandy Real Estate Partners Pinnacle Property Holdings RAM Construction/F.W. Webb Company REIT Management & Research Skanska USA Commercial Development Stockbridge Real Estate Funds Synergy

General Growth Properties

TA Associates Realty

GLL Real Estate Partners

Talbots

Goldman Sachs

TIER REIT

The Gutierrez Company

Unison Realty Partners

INVESCO

Vornado Realty Trust

OUR CLIENTS HAVE MADE

2013 ANOTHER MEMORABLE YEAR

THE ANNUAL REVIEW

8

THE REAL REPORTER ®

Getting Their Billion Back

BY JOE CLEMENTS OSTON — Anyone concluding the cool $2.0 billion spent on multifamily real estate in 2012 had wrung out regional inventory would likely have been surprised by a 2013 in which $2.23 billion changed hands, according to Real Capital Analytics data of the Boston MSA. Per-sf pricing grew from $212,028 in Q4 2012 to $252,197 12 months later, the SIMON J. BUTLER research firm relays.

Notable names MULTIFAMILY expanding their New England multifamily holdings in 2013 ranged from Allston’s Hamilton Co., Chestnut Hill Realty and Trinity Financial at the local level to national players including AvalonBay Communities, Gerding Edlen and JP Morgan.

BIRIA ST. JOHN ALTA AT OVERLOOK RIDGE, MALDEN MA Overseas capital hailing from as far away as China was prevalent, says CBRE/NE principal Perhaps even more striking in their $1.12 lion, and the Arboretum in Burlington yielded Simon J. Butler, who with colleague Biria St. John billion tally was a lack of any oversized deals to $79.8 million, but a Mattapan land site permitagain led the universe on multifamily transac- beef up the numbers. The two-pronged disposi- ted for 34 residential units went for $1.6 miltions, recording in excess of $1 billion for the tion of 722 units at Overlook Center in Malden lion. “They all count,” observes Butler. third time as a partnership. “We did do a lot of to Mack-Cali proved the heftiest in the mix at One prevailing theme St. John recounted volume,” Butler concurs of a season that featured $149.5 million for the CBRE/NE team which put was a constituency of buyers for virtually every multiple blockbusters extended beyond their 38 separate trades over the finish line in 2013. situation, from the Mattapan land site to finBeantown roots to successful outcomes in New Another Malden exchange of 295 apartments ished luxury apartments in the most stabilized Hampshire, Rhode Island and upstate New York. at Cliffside Commons accounted for $60.0 milcontinued on page 78

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Interest Up for Multifamily JOHN EDWARDS

BY MIKE HOBAN OSTON — In crossing CRE’s favorite asset class with the prospect of record low interest rates disappearing, the urgency for what had

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MULTIFAMILY

ANDREW GNAZZO

JOHN KELLY

promised to be another big year in multifamily financing was ratcheted up to an even higher degree in 2013.

“For multifamily lenders, 2013 was very active, very aggressive,” recounts Eastern Mortgage Capital principal Timothy O’Donnell, citing the overall favorability rating for multifamily, and with metropolicontinued on page 82 JAMES COURT APARTMENTS, 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

Nick Herz Senior Vice President

Bruce Lusa

CBRE boasts the leading fully integrated Capital Markets platform in New England with over $2.63 billion in transactions closed in 2013.

Vice President

Jessica Dowd Vice President, Client Services

John Meador Associate

William Farmer Financial Analyst

Emily Simard

FE ATU R E D TR A N SAC TIONS OFFICE SALE & ACQUISITION FINANCING

MIXED-USE

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Madison, Wisconsin

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Client Services Associate

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

Biria St. John Executive Vice President/Partner

John McLaughlin Vice President

Jim Troxell Senior Marketing Project Manager

Kevin Murphy Financial Analyst

Naomi Mayeux Financial Analyst

Aliza Ritsko Client Services Associate

DEBT & STRUCTURED FINANCE Carlos Febres-Mazzei Senior Vice President

MULTI-HOUSING

Kyle Juszczyszyn Senior Vice President

Mike Prakken Senior Vice President

John Kelly VP/Multi-Housing Specialist

Josh Klimkiewicz Vice President

ALTERRA AT OVERLOOK RIDGE

Samuel Dylag

Revere, Massachusetts

Financial Analyst

$149,200,000 â&#x20AC;˘ $206,648/unit

ALTA BRIGHAM SQUARE

BAKER CHOCOLATE FACTORY

Arlington, Massachusetts

Dorchester, Massachusetts

$50,500,000 â&#x20AC;˘ $435,345/unit

$24,131,900 â&#x20AC;˘ $181,443/unit

Taylor Shepard Client Services Associate

HOTEL S Dave McElroy Senior Vice President

Scott Hutchinson Vice President

For more information, and to discuss how our platform can achieve results for your real estate investment goals, please contact CBREâ&#x20AC;&#x2122;s Boston Capital Markets team at 617.912.7000 or capitalmarkets@cbre-ne.com.

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THE ANNUAL REVIEW

10

THE REAL REPORTER ®

‘B’ Retail is Grading Better

BY MIKE HOBAN ATERTOWN — While 2013 saw retail-leaning CRE investors venture further out into the ‘B’ spectrum thanks to anorexic capitalization rates standard in

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WILLIAM MCQUILLAN

RETAIL

metropolitan offerings, Simon Property Group’s $71 million disposition of the Arsenal Mall here stood as testament to the ardor for well-located shopping centers, according to marTHOMAS V. WILDER ket observers who report its singularity reflects a paucity of similar assets available inside Route 128.

Boylston Properties, the Wilder Cos. and Jonathan Bush, Jr.—co-founder of Arsenal Mall neighbor athenahealh—bought not FRED WITTMANN just the 225,000-sf mall

ARSENAL MALL, WATERTOWN MA

and adjacent Harvard Vanguard Medical Associates building, the partnership completed a same-day purchase of the Hess gas station up the street for a total of $80.8 million spent on the district. Meanwhile, as detailed on page 44, athenahealth wowed the CRE scene last spring in buying its 29-acre complex, with both projects forged out of a US armaments facility in use for centuries until being commissioned for private use in the 1970s. Holliday Fenoglio Fowler brokered the mall sale.

A New England Development manifestation that Simon acquired in its portfolio purchase of 10.6 million sf from NED 15 years ago, the mall was 93 percent leased when swapped last summer and is populated by retailers from Ann Taylor to Victoria’s Secret, with Bath & Body Works, Chipotle, Gap, Marshall’s, Old Navy and Sports Authority in between spelling out a deep tenant roster. Since their August purchase, its new owners have begun re-positioning the asset which continued on page 87

Urban Retail Remains Hot Ticket

BY MIKE HOBAN OSTON — Limited supply continued to meet unprecedented demand for urban retail in 2013, as pricing on the assets in the trendiest neighborhoods throughout metropolitan Boston reached new heights, accentuated

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RETAIL in two high profile Back Bay deals that capped off JEREMY GROSSMAN the year in ostentatious style. Cost of entry for a quartet of buildings purchased by ASB Real Estate Investments and LA-based Blatteis & Schnur nearly doubled what it cost to assemble the four assets in the package, according to GEOFF MILLERD continued on page 92

801 BOYLSTON ST., BOSTON MA

CAPITAL SUCCESS EQUITY, DEBT & STRUCTURED FINANCE BOSTON COMPLETES $1.4 BILLION IN DEBT & EQUITY | 32 TRANSACTIONS THANKING ALL OF OUR CLIENTS FOR A SUCCESSFUL 2013!

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1 INVESTOR WAY NORWOOD, MA

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10 & 20 MALL ROAD BURLINGTON, MA

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ACQUISITION FINANCING

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THE ANNUAL REVIEW

THE REAL REPORTER ®

BJ’S WHOLESALE CLUB, REVERE MA

Net Lease Sales Booming In NE

BY MIKE HOBAN OSTON — There was a nearly insatiable appetite among wealthy private investors, 1031 exchange capital and even national institutions clamoring for net lease properties in 2013, a fervor Marcus & Millichap Vice Presidents Robert Horvath and Todd Tremblay can attest to following another record year plying listings across the land as members of the firm’s National Retail Group. “The net lease market in general is extremely, extremely active, and we’re probably the most active brokers out there from a transaction standpoint,” says Horvath, whose Waltham-based office delivered ROBERT HORVATH clients $474 million in 2013, ranking in the top 6 percent performance-wise among Marcus & Millichap’s national army of brokers that exceeds 1,300 professionals.

Getting to that lofty level mandated a steady stream of business for the season, and Horvath says the seven-member group was “straight out” from start to finish, with no lull at the beginning of 2013 as others reported experiencing. A pair of TODD TREMBLAY Rite-Aid units in Massachusetts and New Hampshire reaped a total of $4.4 million last winter after being marketed separately by the brokers. Two larger net lease listings—a 138,000-sf Lowe’s in Windham, ME, and a 120,000-sf BJ’s Wholesale Club in Revere—brought in nearly $29 million ($12.4 million and $16.4 million) for their separate clients over the summer, while an Applebee’s at 56 Plaistow Rd. in Haverhill went for $2.46 million in early October to Jodom Realty. The Horvath/Tremblay team ended 2013 in a flourish by juggling four December closings in compiling another $17.8 million. Typically weighted 60/40 to New England on business, three of the late-stage conclusions were outside New England, with the exception a 1,525-sf parking garage and parking lot in North Station dripping with future possibilities. “At the end of the day, it is a continued on page 94

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THE ANNUAL REVIEW

14

THE REAL REPORTER ®

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Representative Transactions from 2013

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DOUGLASS PARK APARTMENTS, BOSTON MA

2013 a Brisk Year For CRE Lawyers

BY MIKE HOBAN OSTON — In 2013, lenders were not the sole beneficiaries of the frenzied rush by CRE owners to refinance real estate, as the ripple effect flowed into law offices of Beantown firms like a Boston Harbor tide at full moon. And while that element comprised a sizable chunk of business in 2013, there was a significant bump in construction projects and acquisition deals as developers, investors and owners swung into action before rates escalated further, a motivator that continues to fuel deals at the outset of 2014.

“We saw a lot of refinancing,” conveys Saul Ewing Vice Managing Partner Sally E. Michael.

“There was a concern about interest rates, so if people were able to lock into a low rate, they were taking advantage of that. But it also pushed a lot of people into the market as buyers and sellers, because with the low rates they were able to close transactions with certainty and lock it down with a RICHARD D. GASS good loan, and that fueled transactions.”

Saul Ewing handled closings for a number of those transactions, representing the Hamilton Co. in its purchase of the 122-unit Douglass Park Apartments at 650 Columbus Ave. in Boston ($52 million) and the 193-unit Windsor ROBERT M. SCHLEIN Green Apartments in Andover SALLY E. MICHAEL bought for $62.5 million, the latter a high-end community divested by General Investment & Development Cos. through the JLL multifamily sales team led by Senior VPs Michael Coyne and Travis D’Amato. Hamilton Co. BRUCE I. MILLER SALLY C. STARR continued on page 96

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39 JFK Street · Cambridge, MA Square Feet: Sale Price: $/SF:

20,570 SF $33,150,000 $1,612/SF

Rhode Island Portfolio · East Providence, RI # of Units: Sale Price: $/Unit:

194 Units $15,795,000 $81,417/Unit

Boston Realty Advisors Capital Markets Group

256 Parker Hill Avenue · Boston, MA # of Units: Sale Price: $/Unit:

32 Units $7,550,000 $235,937/Unit

2013

at-a-glance

40-46 Park Street · Newton, MA # of Units: Sale Price: $/Unit:

A sampling of our sales

25 Units $7,000,000 $280,000/Unit

84 The Fenway · Boston, MA # of Units: Sale Price: $/Unit:

22 Units $6,725,000 $305,682/Unit

1725 Massachusetts Ave · Cambridge, MA Square Feet: Sale Price: $/SF (Land Area):

12,088 SF $3,750,000 $310/SF MULTI-FAMILY CHRISTOPHER D. SOWER 617.850.9633 csower@bradvisors.com

145 Wells Avenue · Newton, MA Square Feet: Sale Price: $/SF:

17,723 SF $3,750,000 $212/SF

JASON S. WEISSMAN 617.850.9608 jweissman@bradvisors.com ANDREW B. HERALD 617.850.9693 aherald@bradvisors.com

170 Needham Street · Newton, MA Square Feet: Sale Price: $/SF (Land Area):

27,178 SF $2,525,000 $93/SF

COMMERCIAL MICHAEL D’HEMECOURT 617.850.9670 mdhemecourt@bradvisors.com JEREMY A. FREID 617.850.9602 jfreid@bradvisors.com

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THE ANNUAL REVIEW

16

THE REAL REPORTER ®

SBA 504 Program Adds Up for Borrowers

BY MIKE HOBAN OSTON—Despite having fewer loans originated, the US SBA’s 504 program remained a formidable lending tool in 2013, helping borrowers reduce upfront costs and obtain favorable rates to buy or upgrade commercial real estate throughout New England.

October’s government shutdown and conclusion of a stimulus-induced refinancBARBARA ARENA ing program were seen as key factors in the volume drop after several years of upside, but experts say the situation should not diminish the program’s extensive history and growth in popularity on both sides of the teller window.

PAUL FLYNN “We’re still in an environment where lenders want to get deals done, and borrowers are seeing opportunity out there, because they made it through the recession and a lot of their competitors didn’t, and (they’re)

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looking to get a deal,” relays Davis, Malm & D'Agostine attorney and 504 expert George “Tony” Hewett, who tells the Real Reporter that “we definitely saw a lot of activity in the second half of the year, and there was a lot in the pipeline as well, so the (504 program) remains a valuable tool for DYER STREET HOTEL, 8 DYER ST., PROVINCETOWN MA commercial banks to get deals done that they the assets being financed. A Certified Development Corporation (CDC) lends the wouldn’t otherwise do.”

Qualified businesses can borrow up to $5 remaining 40 percent (typically 20 years at a million, but if the funds are used for real estate, fixed rate), with a second lien.

Davis Malm closed on an eclectic array of the borrower’s company is required to occupy at least 51 percent of the property (60 percent for deals in 2013, including 8 Dyer St., a 13-room new construction). The borrower must put up at bed and breakfast in Provincetown. Originated least 10 percent of their own funds, their cho- by Cape & Islands Community Development Inc. sen bank lends 50 percent at their own rate and ($458,000), Seamen’s Bank provided mortcontinued on page 97 term (10-year minimum) and has a first lien on

RECENT NORTHMARQ TRANSACTIONS

$30,000,000 Tidewater at Salisbury SIZE: 210

UNITS CITY: SALISBURY, MA LENDER: REGIONAL BANK

$1,700,000

$3,700,000

Albert G. Brock Building SIZE: 5,897

SF

CITY: NANTUCKET,

LENDER: LIFE

COMPANY

MA

133 Portland Street SIZE: 30,000

SF

CITY: BOSTON,

LENDER: LIFE

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COMPANY

Real Estate Capital NEW ENGLAND REGIONAL OFFICE | 617.728.9522

northmarq.com

WE’D LIKE TO THANK OUR CLIENTS FOR A SUCCESSFUL

2013 M U LT I - H O U S I N G Simon Butler Executive Vice President/Partner

Biria St. John Executive Vice President/Partner

John McLaughlin Vice President

Jim Troxell Senior Marketing Project Manager

Kevin Murphy Financial Analyst

Naomi Mayeux Financial Analyst

Aliza Ritsko Client Services Associate

DEBT & STRUCTURED FINANCE John Kelly VP/Multi-Housing Specialist

Samuel Dylag Financial Analyst

2013 capped off a record year for the CBRE/New England Multi-Housing Group, culminating in 38 transactions totaling $1.14 billion in total consideration and 8,176 units of housing. Capital continues to be attracted to the Boston market given the strong apartment market fundamentals.

SIMON BUTLER

BIRIA ST. JOHN

Executive Vice President/Partner 617.912.6923 simon.butler@cbre-ne.com

Executive Vice President/Partner 617.912.6924 biria.stjohn@cbre-ne.com

CB Richard Ellis – N.E. Partners, LP, a CBRE Joint Venture

THE ANNUAL REVIEW

18

THE REAL REPORTER ®

Boston a Title Town Thanks to CRE Pace ACQUISITIONS

T

DEVELOPMENT

T

CONSTRUCTION

Campanelli’s Acquisitions team focuses on purchasing value add properties with additional development opportunities. To learn more about our recent acquisition, Heritage Landing, please visit heritagelandingma.com.

Learn more about our portfolio, experience and investment criteria at

CAMPANELLI.COM

BY MIKE HOBAN OSTON — Another sign that acquisition and refinancing activity is on the rise in Greater Boston and throughout the country are in the revenue increases title insurers reported for 2013.

According to Real Capital Analytics, there was nearly 20 percent gain in sales volume, year over year, from 2012. For those unfamiliar with the industry, title insurance protects lenders and CRE owners against damage or loss because of defects, encumbrances or liens, for a onetime premium paid at the close of escrow. A new policy must be issued not only 99 SUMMER ST., BOSTON MA when a property changes hands but also in the case of a loan modification or refinancing.

Stewart Title Guaranty Co., which maintains a Boston office at One Washington Mall, reports US and Canadian commercial revenues increased 11.3 percent to $42.3 million from the fourth quarter of 2012 and increased sequentially by 34.7 percent from the third quarter of 2013.

“Certain markets in the US have picked up and are GAYLE BOURDEAU doing considerably better than other markets, with Boston being one of them,” Gayle Bourdeau, Associate Senior Underwriter with the firm’s Boston office, tells the Real Reporter. “Boston has a great deal of commercial construction in connection with the building of either condominiums or apartments, and multifamily is big.”

Bourdeau adds that 2013 saw a shift in the types of deals being done in that there was less SALLY FRENCH TYLER modification and re-structuring and more an emphasis on refinancing given the record low interest rate environment that persists into 2014.

In addition to seeing growth in multifamily and in new urban development areas with a residential component, Stewart Title is seeing a trend towards established hospitals opening satellite locations in urban and suburban areas in major metro markets. Another emerging market is energy related transactions. “There are energy projects happening in more rural areas, with everything that is going on with the oil shale projects as well as wind farms,” explains Bourdeau. We’re seeing growth.”

First American Financial saw revenues increase 7.8 percent year continued on page 105

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Buildings that stand the test of time are built on solid foundations… so are great legal teams.

Let our accomplished attorneys handle your most important real estate matters.

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Real Estate is Our Foundation.

20

THE ANNUAL REVIEW

THE REAL REPORTER ®

Henley Group Making Loan Workouts Work

thrive and grow.

The commercial real estate group at Washington Trust provides commercial real estate mortgages for the construction, refinancing, and purchase of investment real estate projects throughout New England.

Financing ranges from several hundred thousand dollars to projects in the millions, including the following:

$19.05 MILLION in financing for the acquisition of a five-building property in Providence, R.I. $14.485 MILLION for the acquisition of a 147,000 square foot office building in Norwalk, Conn. $10.5 MILLION in financing for the acquisition and renovation of a 32,103 square foot mixed use property in Westport, Conn. $9.2 MILLION in financing for the acquisition of a 70,000 square foot medical office building in Norwalk, Conn. $6.9 MILLION in financing for the construction of a 32,175 square foot supermarket and a 5,000 square foot stand-alone retail building in Mansfield, Conn. $5.25 MILLION in financing for the acquisition of a 94-unit apartment complex in Cranston, R.I. $4.2 MILLION in financing for the purchase of a multi-use property located in Quincy, Mass. $2.9 MILLION in financing for the acquisition of a 6,324 square foot office building in Greenwich, Conn. $1.96 MILLION in financing for the development of a 16-unit, 8-duplex condominium project in Narragansett, R.I. $1.27 MILLION for the refinancing of an 11,108 square foot retail building in New Milford, Conn.

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

Trusted Advisors Since 1800

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Photo: Derek Szabo

Helping New England businesses

BY MIKE HOBAN ATICK — Despite a decline of CMBS delinquencies that culminated in a three-year low in December, CRE loan workout specialist David Goldfisher reports business was fairly robust last year for his debt consulting operation based here. “In this region, transactions and working with borrowers was good, but more of our (business) was outside of this marketplace,” says the Henley Group’s founder and president. “But for what we expected in this market, we were pleased with 2013.”

Because Greater Boston investors are better capitalized, there are lower default rates here and throughout New England than other parts of the country, Goldfisher explains, and values have generally held up better than in markets like Florida and the Midwest. Goldfisher says investors want to be in Boston, which drives cap rates and value, so loans that got into trouble in other markets might not have done so regionally.

“In 2013, due to lighter CMBS maturities stemming from 2003 originations, we generally saw KAI CHEUNG SHANAHAN lower transaction volume and more of a challenge in dealing with special servicers in a market that they feel values are coming back, because if a lender is working with a borrower on a defaulted property and they’re looking at a resolution, but feel the value is coming back to the property, they’re digging in a little harder in their negotiations,” he observes.

But even with the improving fundamentals, DAVID GOLDFISHER New England has not been entirely immune to delinquencies and defaults. Henley’s research noted a slight concentration in New England retail and office properties that encountered tenancy issues in 2012 that resulted in servicer defaults in 2013, particularly in secondary suburban markets.

Industrial properties also struggled to maintain tenants when leases expired and occupants migrated to superior industrial buildings which BRIAN J. MORRIS offered newer space and greater amenities at equal rents. continued on page 98

Among $1,280,000,000 in 82 Debt & Equity Transactions Closed in 2013 $15,000,000

$17,240,000

$110,000,000

First Mortgage Loan

Participating First Mortgage Loan

First Mortgage & Mezzanine Loans

7 Cameron Cambridge, Massachusetts

SouthField Commons – Phase II Weymouth, Massachusetts

EIP National Portfolio

39 Apartments

72-Unit Apartment Project

7 Industrial Properties 3,228,734 Sq.Ft.

The undersigned arranged the financing with

The undersigned arranged the financing with

The undersigned arranged the financing with

Belmont Savings Bank

UBS Realty Investors LLC

JP Morgan Chase Bank, NA

$7,500,000

$15,000,000

$15,500,000

First Mortgage Loan

First Mortgage Loan

First Mortgage Loan

176 South Washington Street Norton, Massachusetts

Westford Technology Park West I Westford, Massachusetts

Lee Farm Corporate Park Danbury, Connecticut

209,000 Sq.Ft. Industrial Property

175,000 Sq.Ft. Office Property

215,000 Sq.Ft. Office Property

The undersigned arranged the financing with

The undersigned arranged the financing with

The undersigned arranged the financing with

American United Life Insurance Co.

PPM Finance, Inc.

AIG Asset Management (U.S.), LLC

$18,250,000

$30,000,000

$40,000,000

First Mortgage Loan

Construction Loan

First Mortgage Loan & Line of Credit

Heritage Park Plaza East Longmeadow, Massachusetts

One North of Boston Chelsea, Massachusetts

Riverwalk Building 1, 5 & 9 Lawrence, Massachusetts

116,840 Sq.Ft. Shopping Center

230 Unit Apartment Project

635,800 Sq.Ft. Office Property

The undersigned arranged the financing with

The undersigned arranged the financing with

The undersigned arranged the financing with

Life Insurance Company of the Southwest

East Boston Savings Bank

East Boston Savings Bank

$4,300,000

$15,000,000

$12,530,000

First Mortgage Loan

Construction Loan

First Mortgage Loan

Princeton Self Storage Princeton, New Jersey

On the Plaza Hartford, Connecticut

52-56 Roland Street Charlestown, Massachusetts

569 Unit Self Storage Facility

193 Unit Apartment Conversion

151,000 Sq.Ft. Office Building

The undersigned arranged the financing with

The undersigned arranged the financing with

The undersigned arranged the financing with

American Family Life Insurance Company

Webster Bank

Brookline Bank

Goedecke & Co., 10 High Street Boston, MA 02110

www.goedeckeco.com

LLC 107 John Street Southport, CT 06880

22

THE ANNUAL REVIEW

THE REAL REPORTER ®

234 BALLARDVALE ST., WILMINGTON MA

Synergy Investments Would Like To Thank The Following Firms For Helping Us Execute Over 100 Lease Transactions In 2013 AVISION YOUNG BABSON REAL ESTATE ADVISORS BOSTON REALTY ADVISORS BROWN & WAGNER CASSIDY TURLEY FHO CB RICHARD ELLIS COLLIERS INTERNATIONAL CRESA BOSTON CUSHMAN & WAKEFIELD JONES LANG LASALLE LANDMARK REAL ESTATE ADVISORS LINCOLN PROPERTY COMPANY MCCALL & ALMY NAI HUNNEMAN Newmark Grubb Knight Frank THE PEABODY COMPANY SETANTA REALTY ADVISORS ST JAMES REAL ESTATE ADVISORS T3 ADVISORS TRANSWESTERN/RBJ UGL EQUIS WYMAN STREET ADVISORS

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

Capital All In For Industrial W

BY JOE CLEMENTS ILMINGTON — Interstate 93 cutting up to southern New Hampshire, meeting I-495 midway, has this Boston suburb and its neighbors stocked with industrial real estate, and that bounty in 2013 equated to CRE sales being well-represented here in that category, particularly for Middle Market and INDUSTRIAL user opportunities. Deals included the $10.5 million exchange in mid-June of Wilmington’s 234 Ballardvale St., a 100,225-sf building divested by the RAM Cos., while Chestnut Realty Partners of Springfield separately paid $10.4 million in December to secure 400 Research Dr. in that same community from Deutsche Asset & Wealth Management. In Tewksbury, Deutsche dispatched 1 Radcliff Rd. for $6.65 million to international investor Varde Partners, which has its US offices in Minneapolis.

One attention-grabbing industrial transaction of 2013 saw Tritower Financial Group spend $32.2 million for 300 Riverpark Dr. in North Reading, a BRENDAN J. CARROLL 208,900-sf manufacturing building net leased to Amazon.com scion Kiva Systems through 2024 (see story, page 24). But I-93 was hardly atypical, as Massachusetts registered more than 200 industrial transactions each exceeding $1 million in 2013.

NAI/Hunneman Commercial Co. identified 218 of those sales for a total consideration of $838 million, the median price for which varied by quarter from a nadir of $61 per sf up to $72 per sf.

CATHERINE MINNERLY NAI/Hunneman Commercial Co. was exclusive broker on 234 Ballardvale St., 400 Research Dr. and the $10.0 million trade in North Andover of 25 Commerce Way, a 168,000-sf warehouse next to Lawrence Municipal Airport that changed hands in early December to another private Bay State investor. “There is a ton of interest in quality, wellleased industrial,” says Douglas Jacoby, now at Colliers International but in 2013 part of CHRISTOPHER SKEFFINGTON continued on page 100

www.hfflp.com

Thank You For A Successful 2013

$3.6 Billion of Boston Transaction Volume

WELLESLEY OFFICE PARK

SEAPORT SQUARE

GARAGE AT POST OFFICE SQUARE

RIVERSIDE CENTER

649,183 SF Office Investment Sale Wellesley Hills, MA

23 Acres of Land Floating-Rate Refinancing Boston, MA

1,400 Parking Spaces Permanent Financing Boston, MA

507,838 SF Office Investment Sale Newton, MA

TRIPADVISOR HEADQUARTERS

ARSENAL MALL

THE VAN NESS

50 CONGRESS STREET

270,000 SF Office Construction Financing Needham, MA

Enclosed Regional Mall Investment Sale Watertown, MA

853,000 SF Mixed-Use Construction/Permanent Financing Boston, MA

179,872 SF Office Permanent Financing Boston, MA

ONE GREENWAY

51 SLEEPER STREET

MARKET STREET LYNNFIELD

NAUGATUCK VALLEY

312 Multi-housing Units Construction Financing Boston, MA

150,363 SF Office Investment Sale Boston, MA

281,000 SF Retail Center Permanent Financing Lynnfield, MA

382,864 SF Retail Center Investment Sale Waterbury, CT

TWENTY TWO LIBERTY

THE VIRIDIAN

WALTHAM PLACE

HERITAGE LANDING

118 Condominium Units Construction Financing Boston, MA

342 Multi-housing Units Construction/Permanent Financing Boston, MA

201,401 SF Office Investment Sale Waltham, MA

356,045 SF Office Permanent Financing Quincy, MA

HFF BOSTON • One Post Office Square, Suite 3500 • Boston, MA 02109 • (617) 338-0990 • www.hfflp.com © 2014 Holliday Fenoglio Fowler, L.P.

THE ANNUAL REVIEW

24

THE REAL REPORTER ®

Commercial Lending • Retail Properties • Multi-Unit Residential • Professional Office Buildings

• Community Service Facilities

• Mixed-Use Properties

• Commercial Construction

FOR MORE INFORMATION CONTACT:

Cheryl Glantz

Matthew Pierce

781-646-3900 x186 cglantz@leaderbank.com

781-646-3900 x183 mpierce@leaderbank.com

Lender NMLS# 449250

300 RIVERPARK DR., NORTH READING MA

Modern Industrial Thoroughly Prized

BY JOE CLEMENTS AKEVILLE — The May exchange of 175-190 Kenneth Welch Dr. proved among the largest industrial CRE sales of 2013, an accomplishment measured by the $36.7 million American Realty Capital spent and in the building exceeding a half-million sf. Formerly occupied by apparel purveyor Talbot’s, 175-190 Kenneth Welch Dr. appears to have turned a hefty profit for seller INDUSTRIAL also Sycamore Partners Management, which spent $20.8 million in Aug. 2012. Even so, being able to acquire 175190 Kenneth Welch Dr. far below replacement cost was a lure for the Pennsylvania-based ownership, observers speculated although ARC officials declined to discuss their interest or plans for the property that was constructed in 1987 on 105 acres near Interstate 495 at Exit 4.

Another head-turning industrial swap came along Interstate 93 north of Boston when Tritower Financial Group put up $32.2 million for 300 Riverpark Dr., a state-of-the-art flex/industrial building fully leased to an Amazon.com subsidiary until 2024. As mentioned in prior Real Reporter articles, TFG has a stability minded strategy that fomented its acquisition of revitalized Ames Pond Corporate Center in Tewksbury, and now has led to its pending buy of 300 Apollo Dr. in Chelmsford, a 290,000sf office building being bought from USAA Realty Advisors.

Listed through Cassidy Turley, TOD BRAINARD DAVID L. PERGOLA the pending exchange said to be near $40 million was first detailed in the March 20th Real Reporter.

Prudential Real Estate peddled its interest in a 10-yearold warehouse at 1-3 Distribution Center Cir. in Littleton to Square Mile J.R. MCDONALD RICK SCHUHWERK continued on page 104

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THE ANNUAL REVIEW

28

THE REAL REPORTER ®

CRE Sales Gaining Across Connecticut

Investing in the future of real estate since 1936

JOHN MCCORMICK

BLUE BACK SQUARE, WEST HARTFORD CT

ACQUISITION | DEVELOPMENT | CONSTRUCTION REPOSITIONING | LEASING | MANAGEMENT

www.bulfinch.com 250 First Avenue Needham, Massachusetts 02494 781.707.4000 ©2014 The Bulfinch Companies, Inc. All rights reserved.

BY MIKE HOBAN EST HARTFORD, CT — Led by the $106.3 million sale of Blue Back Square, a tony mixed-use development in West Hartford, private investors and owner/users continued validating Connecticut CRE in 2013, following up an PATRICK MULREADY active 2012 with a flurry of sales across multiple product types, including a dozen major office transactions totaling over 1.4 million sf. Those numbers do not even include 197,000 sf in the 450,000-sf Blue Back Square transaction. continued on page 108

W

IPA Tops $500M in CT Apartment Sales

VICTOR NOLLETTI

GRAND RESERVE ORANGE APARTMENTS, ORANGE CT

BY MIKE HOBAN EW HAVEN, CT — A spectacular year has enabled the Institutional Property Advisors (IPA) multifamily brokerage contingent of Victor Nolletti and Steve Witten to blow away what had been considered a healthy 2012 where $100 STEVE WITTEN million in volume was tendered by the team headquartered here in coastal Connecticut. The tandem processed nearly $500 million in Northeast multifamily transactions in 2013, including a pair of autumn deals accounting for $80 million. “The overall multifamily investment continued on page 99

N

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THE ANNUAL REVIEW

30

THE REAL REPORTER ®

HFF Retail Team Sells CT Mall for $41M

BY JOE CLEMENTS ATERBURY, CT — The retail center here along Route 69 has undergone more makeovers in its 45 years than Joan Rivers, but the last facelift appears to have taken nicely (for the retail center), Waterbury’s 382,000-sf Naugatuck Valley Shopping Center that traded in November to Cole Real Estate Investments at a hefty price tag of $41 million. Holliday Fenoglio Fowler’s retail division negotiated the JAMES KOURY deal on behalf of seller Developers Diversified Realty Trust, with HFF Senior Managing Directors Coleman Benedict and James Koury overseeing the assignment.

“That was a huge deal,” Koury recounts of the agreement that gives its Arizona-based owner a 50.5-acre development today structured as a grocery anchored (Stop & Shop) power center featuring such category killers as Bob’s Stores, Panera Bread, Payless, Staples and Wal-Mart. Located along an infill retail corridor,

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950 Wolcott St. opened as an enclosed mall in 1969 and was a popular destination before the city’s competing Brass Mill Center came on line in the 1990s, stealing several key tenants. After a series of steps to revitalize the Wolcott Street NAUGATUCK VALLEY SHOPPING CENTER, WATERBURY CT center, it was demolished in 1999 and ultimate- Bangor Parkade in northern Maine to GM ly morphed into its current constitution, a for- Realty of Bangor LLC for $26.2 million, and sepmat Koury says “works really well” as an alter- arately harvested portions of the Rhode Island native to Brass Mill Center and the lifestyle cen- Mall in Warwick for Winstanley Enterprises, the Concord-based real estate firm that continues ter concept giving rise across New England.

The sale of Naugatuck Valley Shopping to reposition the mall piece that was not divestCenter came in a stretch when HFF’s retail team ed. Winstanley and Surrey Equities acquired the completed more than one million sf of sales in underachieving asset for $38 million in late a 90-day period. As the Real Reporter detailed 2012. The section pared off traded for $33.3

in December, HFF brokered the sale of the million.

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34

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FEATURED 2013 CLOSINGS $10,000,000 REFINANCE OF A 71 UNIT APARTMENT PROPERTY

$17,286,000 ACQUISTION OF A 116 UNIT APARTMENT PORTFOLIO

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$4,950,000

$29,000,000

ACQUISITION OF A 49 UNIT APARTMENT PORTFOLIO

CONSTRUCTION OF A 100 UNIT APARTMENT PROPERTY

MALDEN, MA

ALLSTON, MA

$22,500,000 REDEVELOPMENT OF A

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$20,648,000 REFINANCE OF A MIXED-USE PORTFOLIO

PORTFOLIO

BOSTON, MA

$4,560,000 ACQUISITION OF A 32 UNIT APARTMENT PROPERTY

SALEM/MARBLEHEAD, MA

BOSTON, MA

$10,550,000 ACQUISITION OF A 92 UNIT APARTMENT

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Suburban Hoteliers Getting Their Dues

BY JOE CLEMENTS ALTHAM â&#x20AC;&#x201D; The $32.0 million that Peopleâ&#x20AC;&#x2122;s United Bank loaned Park Lodge Hotel Group during the waning days of 2013 was more than a chance to refinance an existing loan on the borrowerâ&#x20AC;&#x2122;s Marriott Courtyard and Holiday Inn HOTELS Express plus fund a 51-room expansion at the former, it also offers a JOHN CUNNANE double-edged example of changing attitudes toward suburban hotels, according to hospitality experts who say more debt and equity is available for investors and owners.

Even as Boston and Cambridge hotels enjoyed limitless suitors chasing deals as they have since 2012 (see story, page 32), a trickle-out strategy emerged in 2013 where hotel-driven capital in pursuit of yield or overrun by institutional buyers JOHN GORGA moved beyond downtown to target everything from suburban acquisitions and new construction to joint ventures and standard re-financings.

Fantini & Gorga Managing Director Keith Wentzel has seen the shifting tide up close, his body of work last year having included structuring PLHGâ&#x20AC;&#x2122;s multi-faceted instrument for the 119-room Courtyard and abutting 108-room Holiday Inn. KEITH WENTZEL Joined on that assignment by Jason Cunnane and John Gorga, Wentzel praises the lender for providing a package attractive enough to overcome substantial competition and win the business of his client, led by Chairman/CEO Keith Gilbert. â&#x20AC;&#x153;With the new loan, we were able to substantially lower his interest rate and debt service costs on the existing debt,â&#x20AC;? recounted Wentzel, with PLHG aided by historically low fixed-rate terms and having enough equity in the assets to finance the expansion. Built by PLHG in 1965, the continued on page 112

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THE ANNUAL REVIEW

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BY JOE CLEMENTS OSTON — It may indeed take a village to raise a child, and the same could be said of One Greenway, the twin-tower apartment EMILY YU complex that broke ground in late 2013 at Hudson and Kneeland Streets in Boston’s Chinatown neighborhood. The project at Parcel 24 is considered by many a measure of social justice 50 years after Interstate 93’s arrival ripped apart what was once a vibrant city block, with an abundance of affordable housing intending to keep residents in place as the Big Dig depression hikes property values. The North Building that is now underway will have 95 of its 312 apartments rated affordable, while the South Building will have 50 condominium units designated for low- and moderate-income buyers.

Meeting that aim and other civic oriented goals not only required a dual partnership in New Boston Fund and the Asian Community Development Corp., the $117 million capital stack had to be stitched together using a multi-pronged consortium of capital, with Holliday Fenoglio Fowler engaged by the developers to craft a viable debt solution that married the different sources in a cohesive manner.

HFF Senior Managing Director Riaz Cassum accedes the solution required a complicated amalgam to create and meet stringent federal regulations and lender mandates. “It was a pretty tough process and took longer to complete than we expected, but we’re happy to have it done and feel very good about the project,” says Cassum, praising the strong, patient sponsorship, a cooperative effort among three banks, and HFF Director Porter Terry, member of a Boston debt and equity group that handled a slew of nine-figure construction loans in 2013 for a variety of high-profile projects (see story, page 72). None of those had so many moving parts, however, as One Greenway, elements of which included a ground lease with the Massachusetts Department of Transportation, fedcontinued on page 86

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THINK MARLBOROUGH Massachusetts â&#x20AC;&#x153;We were pleased at how receptive the city leaders were to the concept of a 110 acre mixed use project. Not only were they open to an innovative concepts, but they were willing to work with our development team to create an environment that is truly a live-work-play destination. The leadership in Marlborough understood the business realities of the private sector and embraced the creative concepts needed to revitalize a parcel that, otherwise, had remained underutilized for too long.â&#x20AC;?

- Joe Zink, president & CEO, Atlantic Management Contact: Tim Cummings, Executive Director Marlborough Economic Development 508.229.2010 www.marlboroughedc.com

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42

THE ANNUAL REVIEW

Maximizing Results

THE REAL REPORTER ®

Retail Rules the Roost In 2013 NH CRE Sales

in Commercial and Industrial Real Estate

304 DANIEL WEBSTER HWY., NASHUA NH

BY JOE CLEMENTS ASHUA, NH — Linear Retail Properties made its sixth CRE purchase here to wrap up 2013, and for acquisitions director Aubrey Cannuscio, 304 Daniel Webster Hwy. is the cream of the crop, calling it “arguably the best retail site in southern New NEW HAMPSHIRE Hampshire,” rather ANDY FLEISHER bold praise for a region that has an incredible 29.7 million sf of inventory, according to data from KeyPoint Partners in a survey showing that sector is booming with pre-recession net absorption and vacancy rates helping infuse confidence in the area among investors over the past year.

That verve was evident not only in the $3.1 million acquisition by Linear in December and a previcontinued on page 111 BOB SHEEHAN

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Broker Brian O’Brien Gets Elite NAI Award

P

ORTSMOUTH, NH — NAI Norwood principal Brian O’Brien capped off 2013 with a pair of upbeat results, the first negotiating a $1.1 million building sale of an asset at Pease International Tradeport, and the second receiving a major performance award from his firm’s national parent, NAI Global.

The late December sale of 68 NH Ave. involves BRIAN O’BRIEN one of the first commercial buildings constructed at the former Pease Air Force Base, a military installation turned over for private use in the 1990s. Dating to 1998, 68 NH Ave. is an 18,500-sf industrial building set on a 3.5-acre lot that has been rezoned to provide more flexibility for future use, according to O’Brien, who credits the Pease Development Authority for its assistance. “It was a great opportunity to work together and have a favorable outcome for all,” says O’Brien, who advised the seller, Wencor Corp. in the agreement that was secured by 68 NH Ave. LLC, an investment group managed by Cyrus W. Gregg and Daniel L. Plummer. continued on page 95

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46

THE ANNUAL REVIEW

THE REAL REPORTER ®

DUDLEY BROOK PRESERVE, SUDBURY MA (RENDERING)

Zoning Change Enables 26-Unit Sudbury Project

BY JOE CLEMENTS UDBURY — When Richard E. Putprush learned during a visit to town hall here last year of new zoning cutting the parcel size needed for senior housing from 20 acres to 10, the veteran CRE broker wasted zero time getting the news out. “I started making phone calls from the parking lot,” Putprush recounts of what could prove to be one of the fastest-evolving real estate JOHN PARSONS developments ever in suburban Boston, especially for multifamily housing in an era where fears of “40B” often equals consternation and lengthy delays stretching years.

Not so with 40 Tall Pine Dr., the 18.4-acre parcel Putprush had been co-listing for sale along with Parsons Commercial Group. One of two parking lot dispatches that day last spring was to the Green Co., an accomplished residential developer whose RICHARD PUTPRUSH high-end residential resume included an earlier housing enclave in Sudbury, the acclaimed Springhouse Pond. “They were the logical choice,” Putprush says of reaching that conclusion because of Green’s prior history in the community and proven ability to deliver.

“They do really excellent work,” Putprush says, “and they are always looking” for potential projects. Those instincts paid off when Green Co. President David Caligaris took a site visit last April. “We knew right away that we could do something there,” Caligaris recalls in a recent interview regarding the project that evolved into a 26-unit townhousestyle community for people aged 55 and older. Caligaris says he was comfortable with the idea from his firm’s past history in Sudbury, and in the warm reception received for the concept that has come to be known as Dudley Brook Preserve, a name given in recognition of a stream coursing through the site.

“They deserve a ton of credit,” Putprush says of planning officials who jumped on board and facilitated an approval process that led to Green Co. closing on 40 Tall Pine Dr. in early June last year, paying $1.63 continued on page 115

S

THE REAL REPORTER ®

THE ANNUAL REVIEW

47

146 DASCOMB DR., ANDOVER AND TEWKSBURY MA

CBRE/NE, Thomson Cook Up $10.5M Sale

BY JOE CLEMENTS NDOVER — The 265,000-sf property at 146 Dascomb Rd. that straddles into Tewksbury ended 2013 in the hands of Restaurant Depot, a New York group aiming to operate a BJ’s Warehouse of sorts there catering to restaurateurs. The $10.5 million deal whose commitment was first unveiled by the Real Reporter last spring was listed via CBRE/NE for seller Brockway-Smith Co. Thomson Real Estate Advisors advised buyer JMDH Real Estate of Andover LLC, whose parent group operates an estimated 100 outlets in the Northeast serving up a smorgasbord of equipment and supplies that cooking professionals can access at purportedly discounted prices.

James B. Thomson says the client advised by colleague Deborah Tamulis and his namesake firm intends to carve off a portion of the complex to defray costs of acquiring a building that dates to DAVID CONNOLLY 1969 and had not changed hands since trading for $90,000 in 1974. “It’s a great infill site” remarked one market professional active in the I93 corridor who says multiple parties pursued 146 Dascomb Rd. before the Gotham contingent took control. The outcome was supposedly seen as a DAVID CORKERY DEBORAH TAMULIS strategic coup for Restaurant Depot’s expanding footprint in now being able to service metropolitan Boston plus the Merrimack Valley. “They worked hard to get it,” relays one professional who says the process took longer than normal due to its complexities, JAMES THOMSON MARK REARDON continued on page 115

A

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Call us today to find out how we can help your company; wherever in the world it may be going.

THE STEVENS GROUP Commercial Real Estate Advisors Ten Post Office Square | Suite 800 South Boston, MA 02109 | 617.886.9300

www.thestevensgrp.com

THE ANNUAL REVIEW

48

THE REAL REPORTER ®

YOUR VISION,

DELIVERED. OFF

ICE

MSH HEADQUARTERS, MEDFORD MA

NEW BALANCE ATHLETIC SHOE CO. HEADQUARTERS, BRIGHTON MA (RENDERING)

Colliers Loan Propels New Balance HQ Plan RET

AIL

STARBUCKS, HANOVER NH

LAB

DRAPER LABS, CAMBRIDGE MA

VOTZE BUTLER ASSOCIATES CONSTRUCTION & PROJECT MANAGEMENT 978.459.7600 | www.votzebutler.com

BY JOE CLEMENTS OSTON — The Brighton section of Boston is steeped in history, especially along Market Street where denizens of the 18th century included George Washington himself and a million or so head of cattle as one of the Northeast’s primary stockyards, but these days, all the buzz is about the district’s rapidly evolving future thanks to DAVID DOUVADJIAN an ambitious development project sponsored by sneaker king New Balance Athletic Shoe Inc. The 1.4-million-sf venture got a critical boost in 2013 when New Balance chief James Davis obtained financing from Prudential Insurance Co. that has enabled work to begin on the opening phase, a 276,000-sf office/retail building that will serve as his company’s headquarters. Colliers International arranged the package through its structured debt THOMAS WELCH and equity group.

“We had a lot of interest in it,” Colliers debt expert David M. Douvadjian reports of the lending opportunity that he says was heavily pursued by regional and national banks drawn by “an iconic location” and “very solid credit tenant,” a combination which unfortunately for that sector was also enticing enough to bring Prudential to the party.

“They were in it right to the end, but Prudential BRIAN GASWIRTH was able to do a longer deal than they could,” Douvadjian explains.

Ultimately, the client secured a construction-to-permanent agreement with fixed terms at “a favorable rate” that Colliers and both borrower and lender declined to provide. “We were fortunate to get it done in one shot,” Douvadjian did observe of a team that included Senior VP Thomas Welch and Credit Analyst Brian Gaswirth.

“It was a pleasure working with the developer,” Douvadjian adds of an assignment he calls “exciting” in being able to assist New Balance, a continued on page 119

B

THE REAL REPORTER ®

THE ANNUAL REVIEW

49

Every deal has a story.

Nobody tells it more insightful, astute, or pu nctual.

THE EDGE, 60-66 BRAINERD ROAD, ALLSTON MA (RENDERING)

Being Green Gets Easier For Mount Vernon Co.

BY JOE CLEMENTS LLSTON — As any visitor traversing through over the past quarter century might cynically suggest, ‘Seedy’ could be a more apt watchword than ‘Green’ for the teeming area where Commonwealth Avenue and Harvard Avenue converge. The district’s graffiti and trash strewn streets are set against a landscape of neon hawking pizza joints, taverns and cut-rate furniture stores to college students and thousands of others arriving daily via multiple bus routes and the screeching MBTA trolley, itself incongruously termed the ‘Green Line.’

One ambitious Boston developer is setting out to BRUCE A. PERCELAY single-handedly change that gritty perception, however, and Mount Vernon Co.’s once-Quixotic vision to remake an industrial wasteland along Brainerd Road into the new-age ‘Green District” made tremendous strides in 2013 towards establishing a promised oasis more akin to the quiet Brookline neighborhood on one side than the boisterous Commonwealth Avenue flank, in between where Mount Vernon Co. Chairman Bruce A. Percelay is staking his claim of Shangri Allston via a half-dozen buildings creating more than 500 residential units and amenities. The mix is being rounded out in construction of a 104-unit building known as The Icon, with all the properties focused on sustainability and a lush setting belying the din of a 24-hour hodgepodge mere steps away. The Icon aspires to receive a rare LEED Platinum rating.

“The transformation is almost complete,” Percelay tells the Real Reporter in a recent update where two of the three new buildings are up and operating, including 60-66 Brainerd Rd., bought in March 2011 for $3.25 million when he acquired rights to a permitted project being continued on page 120

A

Reporter THE REAL

Ten Post Office Square, Boston MA 02109

MANAGING EDITOR Joe Clements SENIOR WRITER Michael Hoban PRODUCTION Bill Samatis ACCOUNT EXECUTIVE Dale O’Reilly

TECHNOLOGY Brandon Henson PHOTOGRAPHER Derek Szabo DATA DEVELOPMENT Mitchell Phillips ILLUSTRATOR Will Samatis

PUBLISHER Michael J. Walsh +1.617.692.2997 | www.therealreporter.com

© 2014 The Real Reporter Media Corporation.

All rights reserved. No part of this publication may be reproduced or distributed without the permission of the publisher.

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We pause to remember the courageous, resilient families and friends who were struck by the cowardly attack on our freedom.

BOSTON STRONG There is still much more healing and recovery.

Please donate to: onefundboston.org

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It is $2B, Again, for C&W in 2013

BY JOE CLEMENTS OSTON — They have been here before, most recently 2012 when the tally was $2.6 billion, and Cushman & Wakefield’s Capital Markets Group emerged the most prolific investment sales contingent in its New sandbox BROKERAGE England once more for 2013, again cresting $2.0 billion to clip CBRE/NE’s $1.9 billion (see story, page three).

Whereas that firm rode a $1.1-billion multifamily performance and national caliber retail operation to achieve its results, C&W feasted on first-class office assets, orchestrating record outcomes on premier corporate addresses inside Boston, Cambridge and Route 128.

“We enjoyed a very busy year,” agrees Robert ROBERT E. GRIFFIN JR. E. Griffin Jr., who with Vice Chair Edward C. Maher Jr. We’ve never and Executive Director had a stronger, Matthew E. Pullen leads more complete, the C&W juggernaut that more productive was among several firms team than helping Blackstone harvest its regional holdings. C&W this one. peddled Blackstone’s New England Executive Office Park, 25 Mall Rd. and 77 South Bedford St. in Burlington via separate campaigns, then put an exclamation point on its season by trading Center Plaza in downtown Boston to surpass CBRE/NE in the waning moments of 2013.

C&W had a flurry of fourth-quarter

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exchanges, a necessary kick after a torpid beginning . “It was a bit slow at the start, but as sellers became more comfortable that this was the right time to be out there, we began to see more product,” Griffin recounted in a recent reflection of “one of the three or four best” years during his three-plus decades in the industry, a period where more than $30 billion of CRE transactions has been processed by his group. Capital “from everywhere” amassed on the sidelines early in 2013, “and once the opportunities began to appear, we never really stopped,” he outlined.

Blackstone listings yielded a cool $630 million, but C&W delivered results for numerous

other clients. Invesco was beneficiary at One Liberty Sq., the most famous of downtown’s treasured “jewel box” office buildings, so ornate the 157,500-sf building appeared in a Goldie Hawn/Steve Martin flick, although C&W gets closing credits after attracting Clarion Partners to the table for its $54.4 million exchange in September. Meritage Properties cashed in on a Seaport District building that C&W procured the Davis Cos. to buy for $43.3 million. And GLL Real Estate took $36.0 million back for Rhineland investors on One Winthrop Square, also considered a “jewel box” and flashy enough to draw DivcoWest almost five years after GLL paid $21.0 million for the historic property. DivcoWest had already partnered with Synergy Investments to buy a portfolio of 343,000 sf in multiple Seaport District buildings earlier in 2013, a $53 million deal where C&W had the exclusive.

Outside Boston, C&W represented Behringer Harvard in a $69.3 million sale of 5 and 15 Wayside Rd. in Burlington to Piedmont Real Estate last spring and the Gutierrez Co. in its December 31st sale of 314 Littleton Rd. in Westford for $44.7 million. Cole REIT (now ASB Capital) took on that 171,000-sf office building, while RJ Kelly Co. bought two Burlington office buildings via separate C&W listings.

Seventy Seven South Bedford St. a 144,700-sf structure, fetched $30.0 million just before continued on page 61

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75 percent from 2011 levels.

Greaney seems rather astute after being the first to plunge into the Financial District and Fort Point Channel once the recovery began to take shape, acquiring gateway Seaport buildings at 250 and 253 Summer St. and a 100,000-sf office building at 51 Melcher St., a structure bought empty and filled up at rents lofty enough to now be on the market for FRANK PETZ sale at pricing said to be approaching $450 per sf in a deal being listed through Cushman & Wakefield. Synergy paid $10.5 million for 51 Melcher St. in Oct. 2011.

The recipient of TIAA-CREF’s capital at 51 Sleeper St., a deal negotiated by HFF, was DivcoWest, among a host of investors who have embraced Boston and Cambridge as prime venues for their capital. The group had paid a mere $48.2 million for 51 Sleeper St. in Nov. 2012, a

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deal at the time that raised eyebrows, but one to the neighborhood that will benefit the curved, which market observers claim is a reflection of three-building low-rise set across from Boston West Coast investors being tuned into the City Hall, upgrades featuring a $90 million overdynamics driving Boston and Cambridge such haul of the Government Center subway stop that they are betting it sets the Hub up for a directly in front of Center Plaza. “That building is more valuable today than it has ever been,” says long period of prosperity.

DivcoWest certainly appears ready to settle Griffin, adding that, “the highest degree of buyin, joining Synergy in a $53 million purchase of a ers were chasing” Center Plaza, as the infrastrucSeaport District package of office buildture and long-term stability of that ings and a parking garage, a C&W listbuilding was coveted by both domestic ing secured in the summer; and then and foreign funds. heading over to Boston’s Financial The Center Plaza result was nearly District on the last day of the year to three times the $110.8 million buy One Winthrop Square, an historic Cornerstone Real Estate Advisers paid office building that C&W broker for the second priciest Boston office Matthew E. Pullen says was appreciatbuilding sale of 2013, that being 99 ed more by that group than others. “A JEFF DEMARCO Summer St., which was the only tower lot of people didn’t recognize the high to change hands citywide last year—in ceilings and how nicely it lays out and a way. An intriguing phenomenon what can be done there to bring in the occurred when Norwegian sovereign tenants of today, but they picked up on fund Norges Bank Investment all of that, and I think they are going to Management showed up in town totdo great there,” says Pullen, who broing what some estimate could be $4 kered that deal and the Seaport portfobillion to funnel into top-rated CRE in lio on the C&W Capital Markets team Boston and Cambridge, monies used to that includes Robert E. Griffin Jr. and ROB DEMARCO grab 49 percent shares at 33 Arch St. Edward C. Maher. In early January, and One Financial Center in separate DivcoWest jumped across the Charles transactions, joining TIAA-CREF at the River to Cambridge to complete a $395 former and MetLife at the latter. The 49 million purchase of One Kendall Square percent figure is prevalent because of from Related | Beal that was yet anothonerous tax laws restricting majority er C&W assignment. ownership in such assets in the US by C&W was also the broker when overseas groups, and is “very likely” to Shorenstein Properties of San Francisco foment future arrangements, according STEPHEN MURPHY to one market expert. “Get used to it,” outbid another Who’s Who of suitors to acquire Center Plaza in the final days of 2013 for says that source, given that foreign money is $307 million, the highest amount spent on a New “desperate” to be an investor in the area.

Eastdil Secured played an advisory role to England office building in 2013. “It was no surprise to me the buyer was a West Coast (bidder),” Blackstone in selling a 50 percent share of One says Griffin. “They understand what is going on Post Office Sq. The buyer in that instance is a in the market today and see it before a lot of domestic group, Morgan Stanley, which already other people do.” In that instance, Griffin says owned the other half interest. That deal was valC&W was able to paint a vision of improvements continued on page 53

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© 2014 Data courtesy of real capital analytics

ued at $275 million—about $675 per sf—and was an outright transfer versus a recapitalization as in the case of 33 Arch St. and One Financial Center. “It’s a building sale, just for half the building,” offered one source. Morgan Stanley has held a position in the 832,000-sf tower since the 1980s. The Eastdil Boston Capital Markets team consists of Brian Barnett, Peter Joseph, Sarah Lagosh, ONE RESEARCH DR., WESTBOROUGH MA DAVID GREANEY James McCaffrey and Christopher Phaneuf. using his own funds to acquire several office upwards of $10 per sf higher than Burlington.

Beyond the pension buildings in the MetroWest, with outside backAccording to Davis, however, that delta is narcapital, REITs and sover- ers behind his $21.5 million purchase of One rowing rapidly, and fundamental changes are eign funds, many high net Research Dr. in Westborough in February. Not all taking place. “CEOs used to drive location, but worth individuals are turn- of the deals are collectives, however, with mar- now it is the employees who are making that ing to local advisors to help ket sources claiming a lone net worth individual decision, and they want to be close to their them get in the CRE game. was behind the $50 million spent on 400 homes and where there is lots to do and places Tritower Financial Group Atlantic Ave. in downtown Boston, a deal bro- to eat and shop,” observes Davis. Because it has PAUL MARCUS has a database of some kered by C&W that had Credit Suisse listed as the Burlington Mall and is in a thickly settled part 3,000 prospects, says principal Tod Brainard, the front on behalf of that New York of Route 128, “Burlington is really comwhile Christopher Knisley of Albany Road taps based buyer. C&W declined comment ing into its own as a centerpiece of the into that source as well and has already on the matter. suburbs,” he says, with the challenge amassed more than $100 million in less than now being to position the 486,000-sf Back in the Seaport, the Davis Cos. two years. Ferris Development of Southborough bought 100 percent of Tower Point Burlington Centre as an attractive has just begun accepting such investors after from Meritage Properties, a New York option to further enhance recruitment. investment firm led by Andrew Nathan, Less challenged by foreign funds BOSTON OFFICE STATS whose operation took in $43.3 million and REITs targeting urban prospects, a $3,500,000,000 on that 155,000-sf one-time ware- JONATHAN G. DAVIS host of local players such as Davis Cos. $3,000,000,000 house now upgraded to high-end office space by rushed to Burlington, some on a value-add quest Meritage, owner since paying $32.0 million in similar to that firm’s purchase, which ironically $2,500,000,000 Oct. 2008. C&W advised Meritage there and pro- was made roughly the same time that Colony $2,000,000,000 cured the Davis Cos., a Boston-based firm that Realty Partners was harvesting 1 and 3 Burlington $1,500,000,000 has been increasingly doing business outside the continued on page 54 $1,000,000,000 region, but bookended Tower Point with an even $500,000,000 larger purchase, Burlington Centre on Route 128 $in its namesake north suburban community. The H1'12 v H1'13 H2'12 v H2'13 $109 million purchase obtained through Eastdil was done in partnership with Principal Financial, Avg $/Sqft and is regarded by Davis Cos. CEO Jonathan G. $350.00 Davis to be a value-add acquisition at a landmark $300.00 location. $250.00 Having heretofore played second fiddle to $200.00 $150.00 Waltham as cream of the crop in Route 128 office $100.00 space, Davis says his firm’s hefty acquisition $50.00 reflects changing demographics, with Waltham’s $9.4 million sf of high-end office space generally 12H1 12H2 13H1 13H2 considered a product of company executives livO Office FFICE ing in more affluent ‘W’ towns next door includQTR Volume YOY % Change # of Props Total Units Avg $/SqFt YOY % Change # of Props Total Units Qtr Volume Avg $/Sqft 12H1 $1,431,646,115 33 5,063,524 $240.32 ing Wayland, Wellesley and Weston. The owner of 12H1 $ 1,431,646,115 33 5,063,524 $ 240.32 12H2 $1,284,712,241 59 12H2 $ 1,284,712,241 -59 7,470,835 7,470,835 $$192.45 192.45 100 percent leased Reservoir Woods in Waltham, 13H1 $ $1,621,790,472 13% 13% 50 50 7,803,666 13H1 1,621,790,472 7,803,666 $$230.87 230.87 Davis stresses the cluster of office space there is 13H2 $ $3,000,395,482 134%134% 60 60 9,366.513 13H2 3,000,395,482 9,366,513 $$292.77 292.77 * Price per Unit/SqFt calculations are rolling quaterly averages “doing fine,” with rents there still running WALTHAM INNOVATION CENTER, WALTHAM MA

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Woods Dr. to Artemis Capital and Griffith Properties for $60.9 million. Colony had bought those buildings from Davis Cos. in Sept. 2012, paying $54.0 million two years after Davis Cos. had acquired them at a foreclosure auction for $33 million. The firm then undertook an overhaul of the 257,000-sf park that began just ahead of the town’s rebound from the 2008 recession.

Other Burlington office buildings changing hands in 2013 were 25 Mall Rd. to TA Associates for $77.1 million, 5 Burlington Woods Dr. for $21.7 from ELV BRYAN J. CLANCY Associates to 5 BW LLC in a deal negotiated by JLL; and New England Executive Office Park, which established a record when it traded for $216 million to a 45 MILK ST., BOSTON MA partnership of AEW, Charles River Realty Investors and with the firm owning one of Providence’s largest paying $14.5 million in June 1996. FWI founder National Development. That office buildings and a growing empire of self John F. Power “really loves that city and knows it BRIAN H. KAVOOGIAN sale was brokered by C&W, storage product extending to New Hampshire, better than anyone,” says Pergola, calling them as was 25 Mall Rd. and two separate sales of 10- principal Brandon Kelly says there were reasons “the natural choice” to pitch the asset to when awarded the listing. “They are the per20 Mall Rd. and 77 South Bedford St., bringing for being so focused on Burlington last fect ones to take that property to the $30.0 million each to Boston Properties and year. Besides being “big believers in what is happening here,” principal next level,” he says of a deal that went Blackstone, respectively. under agreement in 2013 but did not RJ Kelly was the buyer of 10-20 Mass Rd. and Kelly explains the firm is bursting at close until the first week in January.

77 South Bedford St. after the homegrown CRE the seams in its other Burlington holdFWI is one of several veteran CRE firm took runs at Burlington Corporate Centre ings, and wanted to have space to operations active across the region as and NEEP. While more than capable of traveling, accommodate tenants as they expand, with 77 South Bedford St. offering the decade’s mid-point approaches, large floor plates not found in the JACOB GROSSMAN many like them established firms such existing portfolio. as Colony Realty, the Davis Cos., Rising rents on Route 128 does Griffith Properties, Paradigm Capital, TA have investors beginning to eye fringe Associates and Taurus Realty markets, and that reflected in several Investments, all of which made pur2013 trades of buildings close to chases in 2013. Others with 2013 closBurlington. Artemis and Griffith were ings have formed more recently, that buying stability at Burlington Woods, grouping including Albany Road Real but its $3.8 million purchase of 5 Omni Estate Partners and Novaya Enterprises, Way in March was made as a value-add DAVID GROSSMAN both value-add investors who formed strategy, according to Marci Loeber. in 2012 and feature a substantial portJust north of Chelmsford, Farley folio already that for the latter group is White Interests picked up 1001 now extending out beyond New Pawtucket Blvd. in Lowell from England in the wake of an industrial Winstanley Enterprises, paying $15.5 acquisition in Ohio during 2013. million for an 800,000-sf property that Novaya closer to home paid $11.1 complements FWI’s long-held million in August for 136 Constitution Wannalancit Mill in that same city.

Blvd. and 176 Grove St. in Franklin “They will do well with it,” says David LOUIS GROSSMAN and partnered with UrbanMeritage on J. Pergola of Cassidy Turley, which negotiated the four Newbury Street properties eclipsing a total ONE WASHINGTON MALL, BOSTON MA sale of a building Winstanley had owned since continued on page 55

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of $43 million. Albany Road is stretching its geography as well, but made a key investment regionally last April in buying Braintree Executive Park in Braintree from the Grossman Cos. for $17.2 million.

Speaking of the Grossmans, that firm has been on its own buying spree, paying $2.2 million for a bank building in Brookline, and 60 Maple St. in Mansfield from Calare Properties for $7.05 million (see story, page 26). One of its most ambitious treks was to Connecticut where the firm partnered with Summit Development Co. on a 92,000-sf office building in Wilton, the second joint venture with that local operator, and one principal Jacob Grossman told the Real Reporter after buying that “we expect to do well there,” both in having an established local partner and in the basis spent on the building. Jacob Grossman, part of the firm’s ownership trio of father Louis Grossman and brother David Grossman, explains the strategy does not have a specific master plan for making purchases. “We are very much an opportunistic investor,” he told the Real Reporter after the latest Nutmeg State purchase. “If it makes sense to us, we’ll take a look.” The bank building was secured as part of

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a Main Streets Retail campaign seeking solid properties in upscale communities such as Brookline, Chestnut Hill or Wellesley.

Yet another venerable South Shore firm that like the Grossman Cos. has been around for over a half-century and is performing nimbly in the new millennium is Campanelli. Among the first groups to take advantage of the disruptive 2008 recession, the firm in 2013 traded 300 Crown Colony in Quincy’s upscale Crown Colony Office Park for $16.0 million to Grander Capital Partners, an opportunity fund launched last year by industry veteran Ted Norberg.

Campanelli bought the 129,950 sf building for a bargain-basement $8.9 million in Jan. 2010,

OFFICE TOP GUNS 2013 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

BUYER Norges Bank Invt Mgmt MetLife Morgan Stanley John Hancock National Development Griffith Properties AEW Capital Mgmt Charles River Realty Group, LLC Hines Jamestown Properties Boylston Properties Company Wilder Cos Jonathan Bush Clarion Partners TIAA-CREF The Davis Cos TA Realty Beacon Capital Partners Cornerstone RE Advisers Principal Financial Group Alexandria RE Equities Artemis RE Partners Walton Street Capital Beal Cos Related Companies

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

ACQ. AMT. (IN $M) 840.5 700.0 273.5 237.0 230.7 216.8 216.0 216.0 197.3 192.8 180.0 180.0 180.0 175.4 170.2 152.4 124.1 111.8 110.8 109.0 94.5 92.3 90.0 87.3 87.3

# PROPERTIES 2 1 1 1 3 8 1 1 1 1 2 2 2 2 2 2 2 2 1 1 1 2 5 1 1

then retained Colliers International to do a lease-up campaign that brought it from about 70 percent to full occupancy last year just prior to its being marketed through C&W. Campanelli also in 2013 hired Newmark Grubb Knight Frank to sell a 145,000-sf portfolio of office buildings in Canton and Dedham (see story, page 3) but was on the buy side for one of the most visible turnaround efforts of the year, Heritage Landing in North Quincy. After buying the two-building, 358,000-sf campus from Commonwealth REIT in the spring, Campanelli hired C&W as leasing agents and simultaneously began a capital improvements program for the glitzy structures that offer views of Boston Harbor and the Boston skyline. Access to downtown can be had via the Southeast Expressway or the MBTA Red Line, which has a stop connecting to both the Hub and Quincy Center, plus out to Cambridge and Braintree on either end of the line. Already, C&W and Campanelli Leasing Director Peter Brown have landed at least three

tenants accounting for 20,000 sf.

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yielded the highest total price for a one-off transaction in 2013, and was the last of three large Blackstone deals finalized during the final frame. DivcoWest bought Riverview in Cambridge for $192 million via an Eastdil Secured marketing campaign, while Wellesley Office Park yielded $237 million, considered the most ever spent on a standalone suburban Boston office park.

John Hancock Financial signed on the bottom line in the Wellesley deal negoROBERT BORDEN tiated by Holliday Fenoglio Fowler, its outcome impressive enough for the team including Coleman Benedict and Benjamin Sayles to reap investment deal of the year by the Commercial Brokers Association. The record had JESSICA HUGHES been set only six months earlier when C&W oversaw the $216 million sale of New England Executive Office Park in Burlington for (who else?) Blackstone, tossing the 56-acre complex to a triumvirate of AEW Capital, Charles River LORI MABARDI Realty Investors and National Development that is now pursuing a major overhaul of the 1.1-million-sf park.

The HFF investment sales contingent led by Benedict and Sayles had earlier in 2013 set a per-sf price record for Route 128 office buildings when Hines Global REIT dished out $197 million

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--$386 per sf—to buy Riverside Center in Newton, a 510,000-sf first class building 97 percent leased to a cadre of credit-rated tenants.

HFF’s landmark contributions to the Blackstone pie brought the CRE firm’s Capital Markets unit to the brink of $1 billion sold in 2013 volume, with other HFF-listed closings including $51.0 million for 50 Congress St., a 180,000-sf Financial District office building bought in July by KBS Real Estate; and the $60.2 million trade in midSAMANTHA HALLOWELL December of 51 Sleeper St. to TIAA-CREF at another record per-sf price for client DivcoWest.

C&W was the only firm to double up on $1 billion in 2013, but other competitors did crest 10 figures, with CBRE/NE near MATTHEW SHERRY the leader at $1.9 billion.

Eastdil Secured and Jones Lang LaSalle each handled above $1.2 billion. Figures were not available for other major brokerage houses including Avison Young, Cassidy Turley, Colliers International, Lincoln Property Co. and Transwestern | RBJ, although each of them did process their share of memorable deals in 2013.

CBRE/NE cemented second place in acquisitions activity by coupling its renowned multifamily operation led by Simon J. Butler and Biria St. John with a mix of industrial, office and retail transactions, the latter sector a specialty of principals Christopher Angelone and William Moylan, who oversee the operation which has other professionals including Jessica Dowd, Nat Heald and Bruce Lusa. Also on board during 2013 was Josh Klimkiewicz, who recently left to start another real estate endeavor.

“It was a good year,” Angelone conveyed to the Real Reporter, its highlights including what some see as among the city’s most important agreements of the decade when Related Beal acquired the Fidelity Investments headquarters and four abutting properties in the heart of the Financial District. The five-building, 343,000-sf portfolio was listed by the Capital Markets team plus CBRE/NE President Andrew W. Hoar and debt specialist Carlos Febres-Mazzei, with his group delivering financing to the buyers (see story, page four). “The iconic nature of the properties’ location, their great bones and architecture, and favorable market trends made this an ideal investment for the fund,” Related Fund Management principal Justin Metz said of the purchase that was originally unveiled by the Real Reporter in July.

Another attention-grabbing sale was the disposition of 8 Newbury St. for $15.5 million to a partnership of Novaya Enterprises and continued on page 57

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UrbanMeritage. Situated in the first block of Newbury Street, the eight-story, 19,000-sf mixed-use property offered “a rare opportunity to reposition . . . a building on the most desirable block of the world-renowned retail corridor,” offered Angelone after the late-summer deal was completed. On the suburban front, the team delivered $4.75 million to client Samuels & Associates in trading a 94,000-sf building on five acres at 20 Seyon St. in Watertown to Illinois-based ANTHONY HAYES Hilco Real Estate. Principal Robert Gibson and Senior Associate Rachel Marks handled that assignment with Angelone, Moylan and Nick Herz. In another deal completed last spring, First VP Rob Kinlin facilitated a sale of 45 Fourth Ave. in Needham to an affiliate of Intrum Corp. “The new ownership plans to upgrade this boutique property as it has with other assets in the area,” Kinlin says of the 13,500-sf flex/office building situated in the New England Business Center complex where Intrum already has a significant presence.

CBRE/NE lived up to its name in doing business throughout the six-state region, with two

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Rhode Island assets sold separately for a total consideration exceeding $32 million (see story, page 50) and its $34.5 million autumn trade of the Big Y Shopping Center in Bethel, CT, a seven-year-old, 101,000-sf retail plaza on Route 6 in Fairfield County.

Angelone, Heald and Moylan worked BENJAMIN SAYLES with New York colleagues Jeffrey COLEMAN BENEDICT JOHN FOWLER Dunne and David Gavin transacting both sides of 40 Broad St. exclusive assignment that delivered that deal. Maine affiliate Boulos negotiated sev- client Pearlmark the third highest office building eral 2013 trades, including two downtown sale of 2013 in Boston proper. In late November, Portland investment properties at 818 and 832 JLL negotiated the $56.7 million sale of One Congress St. bought by MH Realty LLC for a total Washington Mall, a 115,750-sf office/retail buildof $3.5 million. Tony McDonald, SIOR, and Drew ing steps from Boston City Hall; and orchestrated Sigfridson, SIOR, served as exclusive agents for the $14.4 million transfer of 201-207 South St. in the seller, with Sigfridson later relaying substan- the Leather District to Meritage Properties on tial interest in the assets. “Historically low inter- behalf of seller Ebens Creek Capital. That building est rates and a lack of available inventory has cre- encompasses 62,000 sf. JLL also brokered the ated unmet demand for buildings with a stable $49.7 million sale of 230 Congress St., a $9 million trade of 7-9 Channel Center in the Seaport rent roll,” he said after the closing.

A breakout season for JLL’s multifamily divi- District to Berkeley Investments and $49.5 million sion (see story, multifamily section) was part of spent on 549 Albany St. in the South End, equatthe success for that firm’s Capital Markets Group ing to an impressive $469 per sf for that high-end getting into the billion-dollar category, although lab structure. Petz and Associate Matthew Sherry Managing Director Frank Petz stresses the orchestrated that sale.

Sherry came on board from CBRE’s amount gathered was dispersed. “We gained significant market share in all our product lines,” he Philadelphia office, while Samantha Hallowell tells the Real Reporter in assessing the first full joined in spring 2013 from Transwestern|RBJ. Petz year that the team he assembled beginning in attributes the rapid ascension of JLL’s Capital mid-2012 was in operation. One popular item Markets team to a combination of carefully from start to finish was Class B office buildings, weighing prospects at the outset and engaging as JLL rode a wave of resurgent interest to first all facets of the JLL playbook. It features one of trade 11 Beacon St. to Synergy Investments in the most complete menu of services given concontinued on page 58 January 2013 at a price of $34.9 million, then the

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Hughes hails by way of a dozen years at Beacon Capital Partners, for example, multifamily specialist Travis D’Amato cut his teeth at the Winn Cos., financing expert Jonathan Schneider is an

struction, project management and property management units in addition to a vast network of leasing brokers who are often brought into an assignment to give prospects real-time information and advice on potential strategies.

We gained significant “Nobody does that as well as we do,” says market share in all our Petz, praising the downtown leasing team includproduct lines. ing Bill Barrack, Benjamin Heller and Patrick Nugent for enabling the robust results in the 2013 Hub FRANK PETZ closings, while he reports JLL recent arrivals including Matthew Daniels and Jason alum of HSBC and Michael Coyne had a stint at Fivek “are bringing a new Bank of America. Petz himself spent 15 years at BRIAN DOHERTY energy and a sense of col- AEW Capital after several with Copley Real laboration that has been Estate Advisors. “We can speak their lanabsolutely essential to the guage,” Petz says of property investors and sales process.” Daniels is a Route 128 North expert credited by Petz for helping out on December’s $21.3 million trade of 5 Burlington Woods to Capstone on DAVID J. PERGOLA behalf of ELV Associates.

Grass roots insight is key for understanding where a market is heading, Petz says, especially in a dynamic environment where infrastructure investments and tenant trends are creating new opportunities. “You aren’t selling what is there today; the real vision is how is it going to look five years from now,” he says, with both 40 Broad St. and One Washington St. experiencing ongoing upgrades to infrastructure and the streetscape at large.

Another part of the Petz plan is “coming at brokerage from a principal’s perspective,” something he maintains helps connect with clients and investors. Managing Director Jessica AMES POND CORPORATE CENTER, TEWKSBURY MA

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owners. “We know what is important to them.”

JLL has a long legacy of investment sales, but there are several total newcomers—sort of— on the Capital Markets stage in New England, among them Avison Young, Cassidy Turley and Newmark Grubb Knight Frank. Their nascent appearance is only brand-deep, however, given that those firms have recruited seasoned professionals already familiar with the New England landscape in order to take on the establishment, as in the case of Cassidy Turley, which hired David J. Pergola and Brian R. Doherty in 2012 following several years at C&W. Cassidy Turley had an eventful 2013 focusing on suburban best-in-class listings, among the conquests in its first full year being a LEED Platinum office building overlooking Route 128 in Waltham sold for owner/user Adobe Systems. Meditech paid $25.0 million for the 100,000-sf Waltham Innovation Center that the healthcare software continued on page 59

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firm also intends to occupy. Its broker was CBRE/NE principal David L. Pergola.

For many fledgling groups, one such deal per annum would be a successful campaign, but Cassidy Turley followed that up by securing exclusives on two other suburban gems, rare finds indeed given locations in the underachieving SCOTT JAMIESON Interstate 495 North submarket. Ames Pond Corporate Center in Tewksbury and 300 Apollo Dr. in Chelmsford are separate listings each under agreement to Tritower Financial Group, with the 290,000-sf Chelmsford MICHAEL SMITH building supposedly trading for more than $135 per sf—nearly $40 million— according to market watchers. Cassidy Turley’s Pergola declined to discuss pending transactions, or concluded ones for that matter, other than to acknowledge “We were able to get some positive things done” in 2013 and relaying the pace has not eased in terms of new listings even as old ones such as 300 Apollo Dr. near a closing over the next few weeks.

Licensed professionally in Maine, Pergola

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negotiated the $5.5 million sale of a portfolio of office and retail space in Portland’s popular Old Port District. A New York investor acquired that asset, with Cassidy Turley getting local help on the venture by Cardente Real Estate and its principals, Matthew and Michael Cardente.

Astute industry observers will recall Brandon Dickason, Scott Jamieson and Michael J. Smith as three fixtures of the JLL Capital Markets division who have collectively shifted their business to Avison Young, the Canadian CRE brokerage aggressively courting established professionals in a bid to take on entrenched heavyweights such as Cresa Partners, Colliers International, C&W, Lincoln Property Co. and NGKF, some of the very firms they are plumbing for talent. Two key members are transplanted G&E superstars Steve Cook and Jack Kerrigan, primarily focused on leasing but also trained in doing the occasional building sale as well, a skill that came in handy last spring when Cook led the $168.5 million 40 BROAD ST., BOSTON MA exchange of Watertown’s ations in 2009, says Jamieson, with the current Arsenal on the Charles (see footprint at 54 offices and 1,700 industry professionals. The New England office that launched story, page 24).

KAREN MCSHEA Jamieson says there with 15 people in October 2010 is now four were myriad reasons the trio wound up at Avison times that size.

Peers also had an impact on their choice, Young, from the firm’s proven leadership that includes CEO Mark E. Rose, the one-time head of says Jamieson, with other CRE talent already on G&E, and Earl Webb, who left JLL in 2009 to board including 30-year veteran Rick Kimball as head up US Operations. That base has enabled managing principal; Lincoln Property Co. legend AY to become the fastest growing real estate Kevin Malloy; and Boston leasing stalwart Karyn company in the world since opening its US oper- McFarland, who came over from JLL with Vice President Matt Twombly. That practice has continued as AY races to become a full-service option, last year luring Steve Prozinski and his entire property management team from NGKF, and R.W. Holmes broker William J. Sullivan, who since arriving last year “has been knocking the cover off the ball,” reports Jamieson, no doubt also familiar with recent arrival Karen McShea, a JLL veteran who brings skills in development and international projects.

“We think we are building something pretty special,” Jamieson says of the New England team overall and the Capital Markets group that also hired Derek Opert to serve as a financial analyst. Now on the drawing board: “We are going to build a dedicated debt (and structured finance) practice group,” Jamieson pledges.

Besides supporting Cook on the Arsenal negotiations, the AY Capital Markets crew in 2013 listed 25 Research Dr. in Westborough for CRRI and National Development in an assignment that kicked into the first few days of January when Angelo Gordon paid $26.7 million continued on page 60

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for the 282,000-sf building which houses BJ’s Wholesale Club’s headquarters. JLL has since picked up multiple listings of note, including 235 Barnum Rd. in Devens, a modern industrial building leased to upstart shipping firm Quiet Logistics.

That group’s 184,000-sf lease-up of the space has made it a core-type opportunity and one Jamieson predicts will be wellreceived by the investment ROB KINLIN community. AY also was named exclusive agent for One Parlex Pl. in Methuen and tabbed by New Boston Fund to market the Connecticut State Lottery headquarters and warehouse at 777 Brook St. in Rocky Hill, a 172,000-sf RACHEL MARKS property expected to sell in the $13 million sphere.

Jamieson accedes creating a Capital Markets machine from nothing in Boston’s super-competitive CRE sales arena “takes time and patience,” but adds he is encouraged by JESSICA DOWD the progress to date and the estimated $300 million transacted by the team during the past 18 months. One vein of capital they intend to tap into going forward hails from Canada, a realm that Jamieson says is “eager” to buy into US real estate, and one AY has long-established relationships given its his-

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tory as one of the country’s premier CRE firms.

The prospect is more than just wishful thinking, as one Vermont client of AY New England found out this summer when a private Canadian investor paid $19.6 million for their two-building office complex off Route 89, a deal handled by the NE crew. “Avison Young has very deep penetration into those markets, and we think that is a real strength for us,” says Jamieson, especially given the Canadian dollar makes for better bargains stateside. Avision Young’s client, FD Stoneware, traded the 110,400-sf Office Park at Water Tower Hill in Colchester to Acabay Inc. Situated on a 10-acre parcel sporting vistas of the Adirondack Mountains, downtown Burlington and Lake Champlain, the buildings at 354 and 356 Mountain View Dr. were 95 percent leased when exchanged in early September. “The Avison Young team understood the intricacies of the market and asset story,

generating a competitive sale process,” FD Stonewater principal Jeffrey Toporek said later in praising the campaign.

As for their significance to AY’s growth, at least one new colleague expects positive things from the new Capital Markets division. “They are an important piece of the puzzle, and it is clear they are the right ones for the job, which is no surprise to me,” Kerrigan says. “I have known and admired their work for decades, and it is exciting to finally have ANDY HOAR those guys on my side instead of competing against me.”

Newmark Grubb Knight Frank has a Capital Markets team featuring several veterans from CRE icon Grubb & Ellis, which was bought out in 2012 by rival Newmark Knight Frank. Among its 2013 assignments was a suburban portfolio listed on behalf of Campanelli that yielded $14.5 million when acquired in December by Jumbo Capital. Two of the buildings are in Canton (35 and 45 Shawmut Rd.) and two more are perched in neighboring Dedham (55 and 59 Allied Dr.), with a total square footage of 145,000 sf. NGKF Executive Managing Director Leigh Freudenheim was joined by Senior Managing Directors Anthony Biette and Taryn Wilson as exclusive agents for that listing. “It has been rewarding working with our partners Alcion Ventures and Cambridge Savings Bank, while both Campanelli and (NGKF) teamed to make this transaction proceed seamlessly,” Jumbo Capital founder Jay Hirsch said after closing on the assets that offer “solid, stabilized, cash flow, with upside opportunity to create continued on page 63

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said, plus require permitting and construction time and potential disruption to its workforce that he explains Bush was intent on avoiding.

“What is most impressive about athenahealth’s growth from a small startup to a publicly traded corporate powerhouse with nine locations worldwide is that the company has been able to maintain its vibrant culture throughout,” says Cook, so much so that the decisionmaking also reflected “a high priority on (athenahealth) employees, sustainability and doing the right thing.” In that regard, Bush voiced his approval of the no-go answer. “The Arsenal on the Charles offers everything we could ask for in a headquarters,” he says in a prepared statement. “Its open and expansive architecture, outdoor campus feel, strong community and proximity to Boston fit with our culture, strengthen our standing as a top employer and provide an inspirational backdrop as we work to be medical caregivers’ most trusted service.”

Cook also praises the seller, which was selfrepresented, on both agreeing to divest the complex and for creating “a true partnership” from the outset in 2005 up through the exchange.

“Harvard was compassionate towards athenahealth’s growing space needs and worked over the years to accommodate its continuous

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growth,” says Cook, who also credits the Avison Young Capital Markets team led

by Scott Jamieson and Michael Smith for their assistance in the process, as well as partner Jack Kerrigan, who turned the tables, citing Cook for “really taking the lead on that one,” a transaction that 311 ARSENAL ST., WATERTOWN MA Cook declined to discuss athenahealth’s Kerrigan also predicts will benefit the entire Arsenal Street corridor connecting Brighton and timetable for growth, with the firm presently in Watertown Square. “To me, that’s a market- about 250,000 sf, half what the initial search changer,” says Kerrigan, a view Cook and he are campaign pursued. The property was 90 percent in concert on, along with other CRE profession- leased when acquired, with other tenants occuals who report increased interest in properties pying major blocks including Boston Sports close by the Arsenal. “It is amazing to see what Clubs (50,000 sf), Bright Horizons (90,000 sf) kind of an impact in a positive way that news has and Harvard Business School Publishing had over there,” says Cook. “ Nearby projects (100,000 sf). Harvard had made a similar move are helping boost the neighborhood’s amenity in 2001 when it paid $162.6 million with an base, he notes, including an overhaul next door intention of using the site for future institutionof the Arsenal Mall following its 2013 purchase al needs, then reversed course after the 2008 (see story, retail section) and a series of new recession and opted instead to concentrate its housing options under construction along activities closer to Harvard Square. “The timing worked out great for everybody,” says Cook.

Pleasant Street in Watertown.

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Thanksgiving, and 10-20 Mall Rd. brought $30.0 million to Boston Properties in midDecember. Burlington’s 15 Network Dr. was exchanged for $25.7 million from Cynosure to Nordblom. Down in Quincy, Campanelli picked up Heritage Landing in a $16.3 million agreement negotiated last spring for Commonwealth REIT, and separately used C&W to sell 300 Crown Colony in that same community for $16.0 million to Grander Capital Partners in December.

Griffin says external and internal factors cre- 25 MALL RD., BURLINGTON MA ated “a perfect storm” bringing investment sales to pre-recession levels. The educational repeated dominance of New England’s CRE advantages, solid market fundamentals and a landscape. That engages all disciplines, a stratefaster-recovering economy than other parts of gy where facility and management experts give the US has put Boston CRE demand on a par an asset the once-over, leasing brokers and with Los Angeles, New York and Washington DC research staff deliver real-time market informaacross the globe, says Griffin. “People aren’t so tion and its D&E group offers help with financconfident in the BRIC countries anymore,” he ing, a service C&W’s Jay Wagner and friends did multiple times in 2013 (see story, page six). says.

C&W also champions a team approach Coupled with Capital Markets brokers including Griffin deems a “critical component” for the Geoff Millerd and Justin Smith in the retail

group that posted more than $500 million in 2013, plus multifamily specialist Michael Byrne and Financial Analyst Judith Ravech, and Griffin says he feels good about 2014. “I would have to say we’ve never had a stronger, more complete, more productive team than this one,” he declares. “From top to bottom, they are some of the most dedicated and knowledgeable people around, and that is what had made the difference for our success and our clients.”

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THE REAL REPORTER ®

Healthcare Option Gets Notice

BY MIKE HOBAN OSTON — With the embrace of life sciences and medical office CRE by REITs and institutional funds, outside capital is increasingly bumping up against—and often boxing out— local players who have long been advocates of such assets. A dearth of available proper-

B

LIFE SCIENCES ties after a busy 2012 kept transaction volume down LISA CAMPOLI last year, with only a handful of major healthrelated CRE product trading, including Cole REIT buying a 49,250-sf building in Concord while the property was still under construction.

“The appetite for medical office FRANK NELSON is as voracious as ever from a local and national standpoint,” reports Cushman & Wakefield Medical/Academic Practice Group chief Frank Nelson.

“It is driven by a very specialized group of investors that have an allocation DAVID FIORE from their bigger funds or specialized funds to diversify into medical office.”

Demand heightened following the 2008

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meltdown, recounts Nelson, explaining when investors recognized such tenants were less prone to economic swings and often willing to sign lengthy commitments, they began earmarking funds for the asset class. “What has driven the pricing is that there’s not enough product on the market,” adds Nelson, whose division professionals includes Michael Greeley, named 2013 Rising Star by the Commercial Brokers Association. Some thought C&W and a other brokers specializing in that arena had cleaned out the cupboard in 2012, with C&W trading one portfolio of 13 prized medical office buildings on or adjacent to Massachusetts hospitals that season, a package that fetched more than $100 million in the spring when bought by Healthcare Trust of America Inc. Just one year later, the enhanced pricing was reflected in the Cole REIT deal for 330 Baker Ave., the new-age building Normandy

HARVARD VANGUARD OFFICES, 330 BAKER AVE., CONCORD MA

Real Estate Partners was constructing at its Concord Meadows Corporate Center for Harvard Vanguard. Nelson and Greeley, along with the C&W Capital Markets team, brokered the sale to Cole Corporate Income Trust. The Arizona-based REIT that this year was consumed by ASB Capital targets net-leased CRE, and with Harvard Vanguard signed on for 17 years as sole tenant, Cole ponied up $24.3 million, nearly $500 per sf. “You had a combination of net lease buyers and medical office investors including the REITs chasing that deal, which (probably established) a new benchmark for suburban medical office investment sales ($496 per sf),” says Nelson.

In Woburn, a partnership of Charles River Realty Investors and National Development sold 200 Unicorn Park Dr. in early December to Bentall Kennedy for $26.5 million, or a healthy $353 per sf for that 75,000-sf property. It is net leased for 15 years to Excel Orthopedics and Winchester Hospital after a conversion to medical office that followed CRRI and NatDev’s purchase of the entire Unicorn Office Park for $76.5 million in the summer of 2011.

Eastdil Secured was exclusive listing agent for 200 Unicorn Park Dr., with its Capital Markets team including Brian Barnett, Sarah Lagosh, Peter Joseph, James McCaffrey and Christopher Phaneuf. “We are very pleased with the results,” CRRI Managing Director Bryan J. Clancy told the Real Reporter once the exchange was consummated, relaying that the medical office strategy was “a natural” once the market was assessed in an ongoing effort to accrete value from the portfolio that consisted of 600,000 sf when bought from JPMorgan Investment Management, a deal also negotiatcontinued on page 63

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ed by Eastdil Secured.

Colliers International’s Boston office and C&W brokered a deal for Alexandria Real Estate Equities where the life sciences-centric group dispensed a three-building portfolio (plus land) at the Biotechnology Park in Worcester for $40.2 million to the University of Massachusetts Medical School. The deal allowed UMass to do long-term MINDY BERMAN campus planning, as the school already owned two buildings at the campus, according to Lisa M. Campoli, who led the Colliers team that included Tony Hayes in the exchange that proved among the largest New MICHAEL GREELEY England deal of its ilk outside of metropolitan Boston for all of 2013.

“UMass saw it as a rare opportunity” to grab existing critical mass, Campoli told the Real Reporter following its closing, with the portfolio totaling 300,000 DANIEL TURLEY of the nearly one million sf at the 105-acre Massachusetts Biotechnology Research Park. Alexandria had owned the assets since 1999 as part of a Bay State portfolio still

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additional value in the near term.” Besides the buildings, Freudenheim notes the submarket has Dedham’s Legacy Place lifestyle center and University Station in Westwood to lay claim as tent poles for a new LWP zone. “There is a lot to like about this market,” says Freudenheim, citing access both by automobile and public transportation, plus a roster of companies that feature One Beacon Insurance, Meditech, National Amusements, NStar and Reebok.

Transwestern|RBJ had a big year on the industrial front (see page 22), but also listed a number of first-class office and specialty properties in 2013, including a data center in Andover that brought nearly $130 per sf when Winthrop Realty TR divested the 92,700-sf building for $12.0 million last March to a firm focused on

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topping four million sf but more concentrated inside Route 128.

There were also a pair of hospitals swapped in late 2013, the 166-bed Braintree Rehabilitation Hospital in Braintree and the 168-bed New England Rehabilitation Hospital in Woburn. The facilities went for a combined $90 million to a joint venture of the Sanders Trust of Birmingham, AL and Harrison Street Real Estate Capital of Chicago from seller Senior Housing Properties Trust of Newton. JLL Managing Director Mindy Berman and Vice President Daniel Turley of the healthcare real estate services unit represented the buyers, with Senior VP Jon Schneider securing their debt, a multi-institutional package involving Cadence Bank,, Customers Bank, Iberiabank and Regions Bank that closed in late December along with the equally intricate real estate trade. That involved Reliant Hospital Partners buying the assets and then doing a sale-leaseback to the Harrison/Sanders tandem. Texas-based Reliant

will manage the properties, and Berman says the effort reflects that group’s desire to grow its Northeast US metro market portfolio.

Farther south, Marcus Partners acquired a 70,000 square foot Class A medical office property located at 40 Cross St. in Norwalk, CT, for $13.3 million. Washington Trust’s Commercial Real Estate Group provided financing of $9.2 million and monies to support a $650,000 capital improvements campaign that will bring Class A finishes to the lobbies, new elevators, a granite exterior entrance and “thoughtfully appointed landscaping,” Marcus Partners principal David Fiore said in relaying the building “fits in well with our investment strategy of purchasing good quality, well-located commercial real estate at a reasonable basis, and with an opportunity to add value.” Forty Cross St., he says, “offers best in class medical office and outpatient surgery center space and benefits from direct access to multiple . . . amenities,” including banking, restaurants and retail.

technology related product, Carter Validus Mission Critical REIT. A few days later in early April, Transwestern|RBJ orchestrated a $5.5 million exchange of 15 Pleasant St. Connector in Framingham between buyer Normandy Real Estate and Charles River Realty Advisors and LEIGH FREUDENHEIM TARYN WILSON Crosspoint Associates, with that sale ANTHONY BIETTE amounting to $59.40 per sf. with that 86,925 sf building going for $81.39 Approaching mid-year, the Capital Markets unit per sf. Transwestern|RBJ ended the season by negotiated another Framingham sale when helping TA Associates Realty in its $9.2 million Marcus Partners paid $14.5 for a jewel box office trade of 120 Turnpike Rd. in Southborough to building overlooking the Massachusetts Turnpike. Curo Enterprises. That 81,800sf building went Deutsche Asset & Wealth Management was for $112.48 per sf, a solid rate for that submarTranswestern|RBJ’s client on that assignment. ket, according to industry observers. Skeffington As if that was not enough, the firm was bro- would not discuss his clients or deals, but says ker in a $7.07 million trade of 700 and 900 the steady stream of business made for a sucTechnology Park Dr. in Billerica from Campanelli cessful 2013, “and we’re hoping to continue to newcomer Grander Capital in September, that momentum this year,” he says.

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while still landing such major fish as 40 Broad St. ($110.0 million), Reading Commons ($63.1 million) and One Washington Mall ($56.7 million). Even CBRE/NE plays in that space in between its high-profile listings such as the Fidelity headquarters (see lead story). In one notable Middle Market listing, CBRE/NE advised National Development and partner Turtle Bay on their $17.6 million sale of a retail strip center at 112 Commerce Way in Woburn last July. The 57,000-sf development that houses a Bob’s Discount Fun, Chipotle, and PetSmart was processed by CBRE/NE principals Christopher Angelone, SCOTT HUGHES William Moylan and Vice Presidents Nat Heald and Bruce Lusa, as the group handled both sides and Goldman Sachs financed the buyer with a $13.5 million loan.

For BRA, its whirlwind of closings featured the Harvard Square trade of 39 JFK St. last spring to very private investor Dr. Gerald L. Chan—a key figure in 2013 Middle Market activity—as BRA completed nearly $130 million in CRE sales in 2013. Besides a heavy concentration on multifamily through a dedicated group run by Weissman and Christopher D. Sower, retail expert Michael d’Hemecourt participated in multiple listings last year, and is credited by Weissman for BRA establishing another specialty—mixed use real estate consultation, something the company founder maintains is bigger than ever due to changing patterns and a steady exchange of hybrid assets such as those commonplace on Newbury Street and dozens of city and town centers throughout the Boston MSA. “Mixed-use is big and getting bigger,” says

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Weissman.

“We understood that was where the world was headed with all t h e Live/Work/Play DAVID ROSS (momentum), GINA BARROSO and wanted to make sure we had expertise to take a property and help people understand the different pieces and what they might be able to do with each of them . . . We feel very good about where we are on that.”

BRA and other CRE independents regionally tend to possess an entrepreneurial approach, deep local knowledge and a dominance on deals up to $10 million. They have also grabbed a hefty share of the ubiquitous Middle-Market business that accounts for exponentially more transactions annually than the nine-figure exchange of a downtown office tower or major portfolio sale that grabs headlines. A review of 920 CRE sales in Massachusetts listed in the Real Reporter million dollar sales report shows just 38 topping $50 million and 740 priced under $10.0 million during 2013, with about 15 percent of the deals—

ROBERT TITO

ROBERT TITO SR.

42 of them—in the Middle Market sphere from $10 million to $50 million.

BRA is more than happy to operate in the less-glamorous realm, says Weissman, whose firm is certainly managing to get attention from their peers as it moves up the scale, a trend evident in selling two East Providence apartment communities for the Mount Vernon Co. in the final days of 2013, with the 194 units fetching a total of $15.8 million. Taymil Partners of Framingham was the buyer of East Shore Apartments and The Landings.

“The Middle Market is our core focus, and we have every intention of continuing to be a dominant player in that area, even as we build our share of institutional listings where we feel we also made some great strides in 2013 and intend to continue that this year,” says principal Jeremy Freid, SIOR, stressing openly to the client base his team has built up in the Natick and Needham corridor that they have no intention of abandoning the idea of “No Job Too Small,” having been hyper-local in the area Freid and colleague Adam T. Meixner now reside with Jordan Sneider.

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completed a pair of Newton building sales at the popular Wells Avenue Executive Park in 2013. For 90 Wells Ave., the firm’s client reaped $2.83 million when Hospice of the Good Shepherd, a nonprofit, took on the office building that totals 10,000 sf and last changed hands for $385,000 in Oct. 1981. The sale equated to $283 per sf, a level Freid says rivals record pricing for an asset of that size in the submarket. “We thought that was going to happen,” ERIC O’BRIEN he says of the listing that had four groups competing, all users. Taber Keally of Donahue Associates advised the buyer.

In April, D&D Imaging reaped $3.2 million after a group managed by David M. Rosenberg bought 145 KRISTEN O’BRIEN Wells Ave. for a square footage rate of $180 per sf. BRA was also the broker there, and later negotiated a $2.7 million sale of the former Salett’s Meat Market property at 170 Needham St., a 27,000-sf parcel where the buyer intends to construct a new retail building. To Weissman, BRA’s suburban action reflects the team’s success at targeting one specific submarket and drilling down. “What they did in 2013 in that Route 128/Massachusetts Turnpike market was extremely impressive, and made a big difference in meeting our goals,” he says.

“It is a real strength of ours to have them out there on a JOHN EYSENBACH regular basis, and I think the knowledge they have from that dedication would be very difficult for others to match.” The multifamily division did a Newton transaction in 2013, selling 25 apartments at 40-46 Park St. for $7.0 million to GARRY HOLMES Micozzi Management of Allston. Sower and Weissman represented both sides and Clinton Savings Bank funded the local investor with a $5.2 million mortgage.

Weissman is also proud of the firm’s growing Middle Markets resume, but BRA is hardly alone in that space, with NAI/Hunneman

225 SECOND AVE., WALTHAM MA

Commercial Corp. another Middle Market maven which has a long history listing assets priced up to $10 million and more recently has moved higher into the Middle Markets. Given its affiliation with NAI Global—a network Hunneman company members cite as a key strength—the firm could be deemed a national player, but its stewardship under homegrown icon Stuart W. Pratt and a pool of locally trained experts creates an independent flair, one featuring mini-teams of professionals who pursue their own deals while joining forces when taking on a more complex or larger transaction.

NAI/Hunneman had its share of both with its CRE Capital Markets professionals who include Gina Barroso, Carl Christie, Henry Lieber, Dan McGee, David Ross, Robert Tito Jr. and

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Robert Tito Sr. Another contingent led by Scott Dragos and Douglas Jacoby was a significant contributor in 2013, although those two industry veterans plus colleagues Michael McLaughlin and Lyndsey Ferreira joined Colliers International earlier this year.

The Dragos/Jacoby crew was involved in seven deals amounting to 540,000 sf at NAI/Hunneman, according to Jacoby, including perhaps among the most recognizable property to sell last year in 20 Frank Bennett Highway, a/k/a Route One North in Saugus. The shuttered Weylu’s Restaurant fetched $4.0 million in an August exchange first relayed by the Real Reporter and later covered extensively by other media, a reflection of the hulking wooden struccontinued on page 66

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ture’s prominence among many ostentatious structures on display for an eight-mile stretch of Route One out to Interstate 95 (think Orange Dinosaur on the other side of Route one). The property was sold to Republic Properties principal Joseph R. Dinanno on behalf of Golden Mountain LLC, a New York-based investment group, with Arthur “Trey” Agnew and Dragos orchestrating that transaction.

NAI/Hunneman complements its Capital Markets crew with a versatile stable of professionals such as Daniel Collins, THOMAS R. BLAKELY Catherine Minnerly, Ovar Osvold and J.P. Plunkett who can adroitly straddle both sides of the ledger, with leasing and property sales in their playbooks. In order to assist certain clients or a multi-faceted a s s i g n m e n t , TOM AITKEN NAI/Hunneman brings different team members together to ensure broadbased coverage, a concept now a cornerstone at many national CRE firms (see story, page three).

A textbook example would be the $11.2 million disposition of 16 Elizabeth Dr. in Chelmsford on behalf of Brooks Automation. Retained to sell the 91,000-sf property that Brooks no longer had a need for, it was pointed out to the client that an empty flex property on I-495 North was hardly a prized item in the dour environment.

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5 BURLINGTON WOODS, BURLINGTON MA

The strategy shifted to get NAI/Hunneman’s suburban leasing team on the case to ferret out a tenant that could then enhance its value.

“We needed to sign a long-term lease to make it attractive for investors,” recounted NAI/Hunneman principal Michael M. McCarthy, a charge that resulted in Teleflex taking the entire structure. Details of the lease were not provided, but as the Real Reporter later outlined, the approach worked to perfection when the RAM Cos. of Maine stepped in and bought the building last September, backed by a $7.47 million mortgage from Blue Hills Bank.

Dragos, Jacoby and former NAI/Hunneman brokers Mitchell Levey and Sean Ryan advised Brooks on the sales process and procured the buyer. “They deserve a ton of credit—Teleflex was the exact type of tenant we needed,” Jacoby

says of the NAI/Hunneman leasing team that included James Boudrot, SIOR; Brendan Daly, Evan E. Gallagher, Stephen A. James and Jason N. Rexinis.

In his assessment of 2013, Ross concurs that the lesson was one of, if you fill it, they will come.

“Income property is still very desirable, and activity is booming across all product lines,” Ross reports of a year in which he says the only restriction to unfettered velocity came in a dwindling lack of opportunities, at TREY AGNEW least cash flowing product.

“There is plenty out there that is empty, but that’s not selling,” according to the industry veteran, who says 2012 was busier for his camp, with a slow beginning to 2013 stunting final results.

Highlights included a pair of Acton apartment communities harvested on behalf of separate clients who had held ownership for decades. The first, a $4.3 million sale of the Nashoba Apartments to Universal Realty, was done on behalf of Hamilton Co. founder Harold Brown, whose family had held the 32-unit property since the 1980s. Later, NAI/Hunneman connected both sides in the purchase of Dover Heights by True North Capital Partners from Norwood Car Club LLC, with President Katherine A. Sobel’s family ownership of that six-building, 71-unit complex dating to 1977. Ross terms the outcomes in both instances “fair” for each side, attributing the healthy pricing despite their advanced aged to meticulous upkeep and locations in a tony suburb where apartment inventory is limited. For continued on page 67

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sellers, he says, “The rationale in many of these cases is it’s a good time to move on, and this gives you an opportunity to deploy the (proceeds) elsewhere if you want,” The buyers have valueadd experience that Ross says will go far in delivering the anticipated returns once upgrades are completed.

R.W. Holmes Realty of Natick tendered 15 property sales in 2013, including the $55 million purchase of Boston Scientific’s former Natick headquarters by the MathWorks, a longtime client advised by President Garry W. Holmes. The blockbuster purchase was 300 CROWN COLONY DR., QUINCY MA his firm’s largest in at least exchange, 10 DeAngelo Drive LLC paid $1.32 a half-dozen years, Holmes million for 10 DeAngelo Dr. in Bedford from the recounts, and his client has William J. Callahan TR. The single-story, 12,000MARCI ALVARADO now retained the Wayland sf building constructed in 1967 had not changed based company the exclu- hands since its $700,000 sale in Dec. 1985. Ellen sive leasing assignment for Garthoff, David Stubblebine, James Stubblebine approximately 250,000 sf and Micah Stubblebine served as agents for the MathWorks does not seller, while buyer Formulatrix was advised by presently need.

Tom Aitken of Newmark Grubb Knight Frank.

“We are getting good interest,” Holmes says of that endeavor in reporting VICTOR GALVANI The Middle Market is our that space-starved companies on Route 128 starting core focus, and we intend to to take a gander at one of continue being a dominant the largest blocks of firstplayer in that area. class product available.

R.W. Holmes also found time last year to dispense two other Natick assets in JEREMY FREID, BOSTON REALTY ADVISORS 2013, with 23 Strathmore SIOR JAKE PARSONS Rd. fetching $2.3 million and 27 Strathmore Rd. going for $1.95 million.

O’Brien Commercial Properties of The latter structure has 16,900 sf, while 23 Marlborough completed multiple seven-figure Strathmore Rd. is a 23,000-sf building. transactions in 2013, including 330 Codman In other suburban activity, the Stubblebine Hill Rd. in Boxborough, a 45,300-sf flex/indusCo. negotiated a late-season trade of 70 Olde trial building acquired for $1.94 million in Canal Dr. in Lowell for the Doo Family LP, owners December by Sweeney Properties 330 LLC, a since paying $480,000 in Oct. 1986 who reaped client which has since hired the real estate serv$1.8 million in the sale. The buyer, 70 Old Canal ices firm to lease 21,000 sf its family owned LLC, is managed by Thomas J. Ferraro and Kevin drywall company will not utilize in the property R. Vona. David Stubblebine and James that is located within a mile from Interstate 495 Stubblebine were listed as exclusive agents for at Exit 28. that 29,000-sf building set on 4.2 acres just off President Eric O’Brien, who in December celRoute 3 North next to Mt. Pleasant Golf Course. ebrated the firm’s founding 15 years ago with James Stubblebine separately advised Janis his wife, Kristen O’Brien, had earlier in the year Research Co. in its $2.0 million trade of 2 Jewel negotiated a $1.37 million sale of 141 Parker Dr. in Wilmington to Markham Metals, with St. in Maynard to Lexvest Parker LLC, an entity Nordund Associates President Christopher managed by Eric Shapiro that specializes in Everest bringing in the buyer. In a mid-summer value-add CRE development and management

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of multi-tenanted properties. Eric O’Brien says the new ownership “is poised to deliver competitive lease deals to area companies in need of high-quality office space,” an opportunity prospects can access through OCP, named exclusive leasing agent for the former Digital Federal Credit Union headquarters on Route 27 near the Sudbury town line. Elsewhere, three buildings on an eight-acre industrial site in Littleton were purchased for $1.83 million by Nehemiah LLC from D.E.A.K. Corp., owner since the late 1980s. OCP listed the property that the firm has managed for the past year.

Boston Real Estate Advisors principal Craig Barker drove a major suburban trade over the finish line last autumn when automobile dealing giant Raymond Ciccolo sold Cadillac of Norwood to a former employee, Michael Xidea, for $17 million. The 6.7-acre property on Route One that houses a 38,400-sf dealership building is entrenched along the Automile of Norwood and stakes a claim as the oldest Cadillac dealership in New England. Xidea took control in October after coming back from Florida to the area he began his career in 1988.

Independent broker Thomas R. Blakely scored a significant MetroWest trade in 2013 advising the seller in the $5.67 million swap of Marlborough Village Plaza at 488-530 Boston Post Rd. in Marlborough and working with Everest Realty to procure buyer Marlborough Village Plaza LLC, a group whose manager Salvatore Gilsano secured a $4.25 million mortgage from East Boston Savings Bank. The roadway that also serves as Route 20 conduits 24,000 vehicles daily by the 4.5-acre infill property across from Walgreens. It has “terrific signage,” Blakely, founder of TRB & Associates, told the Real Reporter after last November’s sale on behalf of Gilda Cordone Realty TR.

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“We were very happy with the results,” acknowledges Cassum of the D&E contribution in 2013. “We have had similar years, but it was definitely one of our best, and we were able to complete a lot of different assignments for some very deserving clients and important projects.” The Boston contingent continues to bring in fresh talent to support its existing roster of industry experts, and Cassum says he believes nearly every capital requirement can be met— and may very well have been in 2013 by one of the Northeast’s most productive structured finance operations (see page 72 for more details).

While far ahead of the pack last year, HFF had plenty of company in the upper echelon as several SARAH LAGOSH other D&E units topped the $1 billion milestone, including Eastdil Secured reporting $1.7 billion, Colliers at $1.5 billion and Cushman & Wakefield with $1.4 billion.

Exact numbers were not available, but JLL and CBRE/NE were also major CRE firms offering such services, with CBRE/NE assisted by the solid multifamily unit and expert John Kelly (see story, multifamily section).

Among mortgage banking units, Goedecke & Co. posted $1.4 billion in activity last year and Fantini & Gorga did not provide a figure but was busy in a range of product lines, including net lease lending, while its Eastern Mortgage Capital unit also participated in multiple transactions of consequence (see multifamily section).

TEN BROOKLINE PL., BROOKLINE MA

440 AND 480 MCCLELLAN HWY., EAST BOSTON

Regardless of which side of the billion dollar register they landed, agents for various borrowers nearly all had one or two signature deals in 2013, and for others, the pipeline flowed unabated—not that there was anything wrong with that, stresses C&W principal Jay Wagner after his team was all over the map on product type and marching orders, plus played a constant role helping winning bidders of C&W-listed assets secure the necessary funding to leverage a deal sufficiently.

C&W’s Equity, Debt & Structured Finance Practice arranged a $21.3 million mortgage from Eastern Bank that enabled Artemis Real Estate Partners and Griffith Properties to buy 10 Fawcett St. in Cambridge from Synergy Investments for $31.3 million, a mid-summer deal previously revealed by the Real Reporter. Another $19.9 million was provided through C&W to RJ Kelly Co. when the Burlington investor bought 10 and 20

Mall Rd. for $30 million in December from Boston Properties (see story, lead page).

Cambridge Savings Bank was the lender on that Class A suburban office asset which totals 150,000 sf. Ten and 20 Mall Rd. received “a high level of interest from a variety of lenders who were attracted to RJ Kelly’s prime sponsorship and the property’s strong positioning within the Burlington market,” outlines Wagner. The same was true for 10 Fawcett St., he says, with life companies and several conduit lenders “chasing it very hard,” yet even though CMBS sources are “having some successes,” he says that, “at the end of the day, the banks were very aggressive and (CSB) stepped up to do the deal” for a sixstory, 130,000-sf building constructed in 1985.

Besides helping clients of C&W’s investment sales machine, the Boston office’s debt and equity contingent had plenty of other ventures to produce revenues in 2013, such as arranging a pair of major refinance loans for Cargo Ventures on a mixed-use property in Boston’s Seaport District and a pair of modern flex/industrial buildings in East Boston near Logan International Airport. Those buildings at 440 and 480 William F. McClellan Hwy. received $18.0 million from Brookline Bank and the Seaport District building at One Harbor St. drew $30 million from People’s United Bank, a facility Wagner says was aided in credit quality by having Vertex Pharmaceuticals lease out a warehouse portion of the 209,000-sf structure. “It’s a very unique property,” says Wagner, citing pluses for lenders as the financial strength of the eight tenants who have the property fully leased long-term “and the attractive sponsorship.”

Dating to its days as Meredith & Grew, Colliers International has had an accomplished D&E team created by Co-Chairman Kevin C. continued on page 69

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Phelan and led by him and David M. Douvadjian, whose accomplishments in 2013 included a construction loan to kick off New Balance’s 1.4-million-sf office campus in Brighton (see story, page 48). As with others, Colliers processed numerous refinancings last year, and did acquisition and capitalization assignments across a variety of asset classes, including industrial, life sciences, office and retail. “It was one of the best years we have ever had,” says Vice President Jeffrey D. Black, with Colliers clients taking the book of business out of town in many instances, including last spring when the team refinanced a portfolio of supermarkets based in Colorado, and was all over New England, its active hospitality unit that includes Black and RIVERVIEW, 245 FIRST ST., CAMBRIDGE MA John Broderick funding the owners of hotels from sition and bridge loan tandem.

Led by co-founders David R. Masse and Louis Massachusetts to Maine F. Karger, Panther Properties has been building a (see story, page 36).

The inns were mostly multifamily empire in the southeastern US KYLE JUSZCZYSZYN regional, but Colliers’ throughout the decade stretching into Florida, in Boston operation handled addition to having a more diverse CRE portfolio acquisition and mezzanine across New England. “We congratulate Panther financing on a 740-unit Properties and look forward to continue helping portfolio of multifamily them grow their Class A multifamily portfolio,” assets in Alabama and says Douvadjian, adding, “we appreciate their Tennessee last spring, continued faith in our capabilities.” Welch laudsecuring 85 percent LTV to ed UBS on the Georgia loan, observing that the enable capital expenditures CMBS lender “ran a very thorough but fast JOSH KLIMKIEWICZ at the trio of properties. upfront credit process providing for certainty of Lender Redwood Mortgage execution and putting the borrower into position Capital also provided non- to lock rate and close in a short period of time.”

As in those instances, Colliers is generally recourse terms, with the first mortgage piece of the brought on the national stage by a client, and loan fixed over the 10-year Black says the experience has been “an eyeswap rate and providing opener” in seeing the stark differences in credit two years interest only availability elsewhere. “It gives you a great perwhile the $7.7 million mezMICHAEL PRAKKEN zanine slice is IO the entire term. Redwood’s $60.4 million consideration amounts to a price of $77.30 on a per-sf metric.

The team of Douvadjian, Senior VP Thomas Welch and Analyst Brian Gaswirth aided that same borrower, Woburn-based Panther Properties, in landing $26 million last October for the Effingham Parc Apartments, a 352-unit luxury complex on 39 acres in Rincon, Georgia that Woburn-based Panther bought for $30.8 million just six months after paying $75 million for the Alabama and Tennessee assets. The 10year, fixed-rate note on Effingham Parc was arranged through UBS Real Estate Securities, with the permanent loan retiring a bank acqui- 600 NORTH BEDFORD ST., EAST BRIDGEWATER MA

69 spective of how blessed we are to be in such a strong market,” says Black. “A lot of people aren’t so fortunate.”

One assignment that drove that home was helping Synergy Investments refinance a Seaport District office building, with the client opting to do so despite incurring a pre-payment penalty because it was deemed prudent to lock in a low rate for the future. “We got a strong and immediate response,” recalls Black, including several life companies he maintains would have been loathe to put capital into what had until recently been considered a fringe office market but are eager to do now that it has morphed overnight into one of the hottest in the country. “The Seaport is finally ready for prime time,” Black says in assessing the reaction that he also credits in client Synergy’s solid reputation on the local CRE scene. In the end, People’s United Bank delivered $37.0 million on 253 Summer St., with the willingness to do a seven-year loan when life companies would not make that commitment. The dualtranched permanent loan also features a floating rate instrument to support future leasing activity.

According to Colliers Vice President John Broderick, the continued low interest rate environment was one pleasant surprise in 2013, as was the resurgence of conduit capital. “They are starting to win their share of business,” he says in estimating more than three dozen such players are aiming to grab a piece of the action regionally, with New England’s vast banking network proving the main impediment. “They have been very active in trying to get capital out, but that is a big obstacle,” he says.

CBRE/NE is another firm with a deep legacy of debt and structured finance services, and that program has been enhanced this decade by the arrival of Carlos Febres-Mazzei from HFF in 2012 and multifamily lender expert John Kelly from Arbor Commercial Mortgage. Joined by veterans continued on page 70

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including structured finance expert Michael Prakken, the division also enjoyed a brisk 2013 and took on several significant assignments.

“Marquee assignments” in Febres-Mazzei’s analysis included providing $88 million from Natixis Real Estate Capital to help Related Beal buy the Fidelity Investments headquarters in Boston’s Financial District and a $60 million refinancing of The Launch at Hingham Shipyard, a 246,000-sf waterfront shopping center on the South Shore that CBRE/NE secured funding for from Jeffries LoanCore.

Client Samuels & Associates opened the first phase of the Hingham project in spring 2010, with the ultimate build out encompassing 217,000 sf of retail, 28,700 sf of office space BRAINTREE EXECUTIVE PARK, BRAINTREE MA and 94 condominiums branded as “The Moorings.” District. CBRE/NE also got lenders involved early Febres-Mazzei was joined in the process, an approach Febres-Mazzei DAVID R. MASSE

by Senior VP Kyle explains helps to facilitate a smooth transition Juszczyszyn and Josh from marketing to closing and solidifying capital Klimkiewicz in negotiating for a given transaction. “The Block on Congress that transaction on behalf of required a creative approach to capitalizing the Boston-based Samuels, deal, and understanding Related Beal’s unique among the region’s most vision for the properties,” relays Febres-Mazzei active developers. Febres- of the buildings at 15 and 19 Congress St. and Mazzei also cited the strong 54, 68 and 82 Devonshire St./35 Congress St. sponsorship, a group he has LOUIS F. KARGER assisted getting backing for prior projects. “They have been a great client,” he says. “It is always a pleasure working with them.” More and more of our clients Samuels & Associates also hired the same have been turning to us for three CBRE/NE professionals on a $35.6 million the acquisition financing. financing of BJ’s Plaza in Brookfield, CT, with Webster Bank providing the first mortgage financing on the 131,325-sf shopping center at SARAH LAGOSH 106 Federal Rd. Besides the free-standing, Eastdil Secured 117,925-sf BJ’s unit, the property has three outparcels consisting of a Bank of America, Savings Bank of Danbury and Chick-fil-A. “The property In a statement, Related Beal Executive VP received a tremendous amount of interest from Stephen Faber says company officials “are thrilled the lending community due to its location and to be able to partner with CBRE/NE to re-imagine premier sponsorship,” Juszczyszyn said after one of the most notable locations in downtown that closing in adding that Webster Bank “was Boston and create a compelling and active retail very competitive and executed the deal flaw- and dining offering that will complement the idelessly,” adding “it was a pleasure to be able to ally placed office space.” Febres-Mazzei also work with Claudia Piper from Webster Bank on praised the lender for their “ability to close withthis transaction.” in a tight window and a complex deal structure.”

CBRE/NE was exclusive listing agent for the Eastdil Secured’s Boston office is best known Fidelity headquarters labeled for its marketing for high-profile investment sales that last year campaign “The Block on Congress” in a reflec- featured 99 Summer St. in Boston ($110.8 miltion of how centered the assemblage of 340,000 lion); Burlington Corporate Centre in Burlington sf in five buildings is in the traditional Financial ($109 million) and Financial District jewel box

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property 45 Milk St. ($21.0 million), but the group also helps clients secure financing as well, acknowledges Managing Director Sarah Lagosh, whose firm tends to keep its business quiet but does relay in addition to a couple of super-sized recapitalizations in 2013 it also delivered Jamestown financial backing from Capital One of $96.3 million when the Atlanta-based investment advisor bought Riverview at 245 First St. in Cambridge for $192.6 million in December.

“We do have that capability, and more and more of our clients have been turning to us for the acquisition financing,” she says. Lagosh declined to provide specifics, but indications are the group provided that service to the Davis Cos. and Principal Financial in their acquisition of Burlington Corporate Centre, which borrowed $76.7 million from Bank of America; and did the same for Artemis Real Estate and Griffith Properties, who borrowed $32.0 million from Wells Fargo Bank after they bought 1 and 3 Burlington Woods from Colony Realty Partners for $60 million.

Aided by several huge CMBS refinancings, Goedecke & Co. had “a monster year,” Vice President Shawn Herlihy says, and the numbers would appear to back that up given more than $1.2 billion processed overall, reportedly including an estimated $750 million arranged by Herlihy alone in representing a number of top clients, including the resilient Equity Industrial Partners, which has seemingly roared out of the recession and attracting a variety of capital as the firm marks 20 years in business.

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$90.4 million covering nine EIP assets in the Northeast, including three in the Bay State at 90 Nemco Way (216,000 sf) in Ayer, 600 North Bedford St. (297,100 sf) in East Bridgewater and 1 Harvest Ln. (115,225 sf) in Southborough. Totaling 2.7 million sf, that package also features buildings in New York, North Carolina, Ohio and Pennsylvania. JPMorgan loaned EIP $93.9 million in another CMBS issuance arranged by Goedecke & Co. for 3.2 million sf outside of New England, with assets for that pool stretching from Florida up to Ohio.

The conduit interest is a continuation of RIDGECREST VILLAGE, WEST ROXBURY MA 2012 when Goedecke & Co. aided EIP and mul- of $111 million given the firm whose leadership tiple clients on a variety of includes President Donald Levine, Neal Shalom, refinancings using CMBS Lewis Heafitz and Bruce Levine. debt, a program that is “A lot of people like CMBS because you can continuing into 2014. get more money than the banks and the life Another 2013 loan was companies, and do it on a non-recourse basis,” provided EIP for its 9 Herlihy says, including one repeat client in Northeast Blvd. project in Albany Road Real Estate Partners. Goedecke & Salem, NH, in which Co. put the CMBS monies together when ANDREW KAEYER Cantor Fitzgerald took out Boston-based Albany Road borrowed $10.6 a mortgage loan from Capital One with a per- million from JPMorgan for its $17.2 million purmanent loan of $54.0 million. chase of Braintree Executive Park in Braintree Herlihy is quite familiar with the property, last April and another $30.0 million in having helped EIP secure an interim loan from November to buy the 440,000-sf Springfield First Niagara Bank that led to purchase of the Plaza, a $34.2 million investment.

600,000-sf campus previously occupied by “They did a fantastic job helping us on Cisco Systems. Able to acquire it for the super that,” Albany Road President Christopher J. low rate of $12.2 million in October 2010, EIP Knisley relays to the Real Reporter, “It was a immediately leased up the facility to several great option to have available.” Herlihy also solid tenants, a program that has clearly boost- supplied Albany Road a $10.0 million bank loan ed its value given the latest loan issuance, a from Bank RI (and Brookline Bank participating) deal Herlihy declined to discuss specifically when the borrower acquired Gateway Center in beyond terming EIP’s results “a remarkable Rhode Island for $13.2 million last year. story” and indicative of its normal value-add In all, Goedecke & Co. completed 83 deals in approach that has made Cantor Fitzgerald a 2013, including a pair of refinancings for repeat lender, with yet another 2013 mortgage Brookwood Financial Partners, a savvy Beverly

NORWOOD GARDENS, NORWOOD MA

based investor who took out a $25.4 million loan on Brookwood Business Center in Billerica and $24 million on a three-building office park at 75 Sylvan St. in Danvers, both from East Boston Savings Bank. Brookline Bank got involved with an $8.32 million mortgage on Brookwood’s glitzy 170,000-sf industrial building at 300 Jubilee Dr. in Peabody.

NAI/Hunneman Commercial Co. arranged a pair of refinancings totaling $100 million in the final days of 2013 on behalf of Chestnut Hill Realty Corp. for apartment communities the firm owns in Boston’s West Roxbury district and in Norwood. The proceeds were split evenly between the two, something NAI/Hunneman Capital Markets principal Andrew Kaeyer says is a reflection of how closely matched the two properties are, with each having recently undergone a series of upgrades to further enhance their value to current standards.

“They are both very similar in size and the (commitment) by Chestnut Hill Realty to invest in all of their properties is consistently strong,” says Kaeyer. “They are not just providing people with a place to sleep—this is the centerpiece of their lives and Chestnut Hill Realty really recognizes that and takes it to heart.” As a result, Kaeyer says it was “an easy sell” getting Prudential Capital to pony up $100 million for the well-established firm that controls more than 3,800 units of housing throughout eastern Massachusetts and Rhode Island.

“They understand Chestnut Hill’s has a very strong reputation in the market and has some of the best, well-maintained properties you will find,” he says, while the borrower engaged NAI/Hunneman with the mission to secure an established insurer who could offer flexibility and superior rates, requirements Kaeyer says the lender was able to fulfill to their satisfaction. “It was great getting two best-in-class operations together,” he says.

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HFF Finance Team Hits $2.8B in 2013

BY JOE CLEMENTS OSTON — Even David Ortiz would have to be impressed at how 2013 turned out for Holliday Fenoglio Fowler’s structured finance team, one which posted $2.8 billion in volume to easily outpace others in its field of play, and much like Big Papi, HFF’s production last year came in all areas of the CRE arena, although the group’s construction financing pipeline seemed especially potent.

HFF-arranged construction loans included $85 million for a Needham office building

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JOHN FOWLER

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fully leased to TripAdvisor on behalf of Normandy Real Estate and Greenfield Partners, a six-story, 280,000-sf structure slated for completion in 2015; $114.7 million for One DANA E. BROME Greenway, a two-building apartment complex being developed in Boston’s Chinatown (see story page 38); and $116 million through Wells Fargo Bank for Twenty Two Liberty, a 14-story luxury residential condominium tower at Fan ROBERT HERRON Pier being developed by the Fallon Cos. and Massachusetts Mutual Life Insurance Co. through affiliate Cornerstone Real Estate Advisers.

“The appetite for construction loans changed in the past year,” concurs Cassum even in opining that the “reckless” practices of pre-2008 are unlikely to return given greater regulatory oversight and a wizened lending attitude. Pure speculative office construction would be “very difficult” to pass muster, he says, and that should keep future inventory in check. There have been concerns about multifamily development getting overheated, but Cassum maintains a lack of suitable sites could limit their exposure as well.

HFF certainly had plenty of alternatives to juggle on top of the construction lending. Also on the Boston waterfront, HFF delivered $112.0 million for Seaport Square in a refi-

CENTER 128, 400 FIFTH AVE., NEEDHAM MA (RENDERING)

nancing of the master-planned project set in the heart of its namesake Seaport District where 6.3 million sf in 20 buildings is on the dais. HFF advised borrowers Boston Global Investors of John B. Hynes III fame and Morgan Stanley Real Estate on the six-year loan procured through Starwood Property Trust. It was structured to give the partnership flexibility in releasing parcels while maintaining leverage such that the loan could carry them through

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The appetite for construction loans changed in the past year.

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RIAZ CASSUM Holliday Fenoglio Fowler

full execution of the business plan.

Executive Managing Director John Fowler handled that intricate financing with Managing Director Anthony Cutone and Analyst Brett Paulsrud. The loan’s collateral are the 15 development sites making up Seaport Square, mostly parking lots fully approved for a mix of hotel, multifamily, office and retail space.

In the Twenty Two Liberty assignment, Fowler, Cutone and Analyst Toby Banta represented the borrower, while Shelly Gouin negotiated for Wells Fargo. Featuring sweeping views of Boston Harbor, the CBT Architectsdesigned project is slated for a 2015 opening and will have 15,025 sf of ground floor retail

plus a 282-space parking structure below grade.

Across town next to Fenway Park, $191 million was arranged by Director Greg LaBine for construction of the Van Ness, a 760,000-sf mixed-use tower being built by Samuels & Associates and clients of JPMorgan Asset Management. The project will feature 172 housing units built above a three-story, 170,000-sf Target Department Store, plus an 11-story, 235,000-sf office tower, 31,000 sf of ground-floor retail and 506 parking spaces.

“The combination of high-quality residences, first-class office space and superior shopping anchored by Target make this a welcome addition to Fenway,” LaBine says in noting Samuels & Associates has already constructed several similar properties in the area in a bid to make it a premier LWP destination.

The Needham endeavor involved a floating-rate loan provided by lead lender RBS Citizens and People’s United Bank, with Cassum, Paulsrud and Director Porter Terry coordinating the agreement with RBS Citizens Senior VP William Butler and People’s Senior VP David Lewis. “Normandy and Greenfield had the vision and persistence to transform an underutilized group of 1950s era R&D buildings into an amenity rich corporate office location, and HFF was thrilled to play a part,” Cassum says of the project known as Center 128 situated on 4.7 acres along First Avenue, part of a larger mixed-use development with frontage on Route 128.

HFF separately helped Normandy take in $49 million in first mortgage financing on its Concord Meadows Corporate Center at 300 continued on page 73

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HFF FINANCE continued from page 72

Baker Ave. in Concord. The 425,000-sf office complex attracted Natixis Real Estate Capital to the fold, with Cassum joined in that instance

by Terry and Analyst Samantha Bendetson. That commitment comes in the wake of Dassault Systemes vacating 214,000 in consolidating to a Waltham headquarters, but a successful lease-up campaign has brought occupancy up near 80 percent after signed deals with Lexington Eye Associates and fruit juice kingpin Welch’s Fruit Juices. The loan provides additional funds needed to lease the fallow portion.

Other middle market MADISON PLACE, SHREWSBURY MA loans provided by HFF ANTHONY CUTONE included $14.8 million for Broder Properties that will enable that develMadison Place in oper to take on a fractured multifamily project Shrewsbury with a perma- in Cambridge known as The Wyeth. Acquired nent loan coming from by Boston-based Broder out of foreclosure, the Boston Private Bank & property on 2.2 acres includes 45 Yerxa Rd., a Trust Co. Acting on behalf 19-unit building renovated in 2008, plus 120 of developer Robert Moss, and 124 Rindge Ave. partially completed buildHFF arranged a seven- ings with 16 and 28 units. Broder is using the year, fixed-rate loan that $23 million mortgage arranged through BRETT PAULSRUD took out the construction Eastern Bank to bring those buildings up to financing with a permanent loan on the 96- LEED Platinum standards, details HFF Director unit multifamily property. It is located at 900 Greg LaBine, who processed the 15-year, fixedMadison Pl., close to Interstate 495 and just 30 rate mortgage. “Broder intends to hold these miles from downtown Boston. HFF’s Terry, who properties long-term as a core portion of their handled the loan with Cassum and Analyst growing portfolio,” says LaBine, and by blendMartha Henderson, praises his client for creat- ing the financing, is able to “lock in long-term ing “a beautiful project” that feeds off both rates in the current attractive interest rate enviBoston and Worcester work forces to fill the ronment.” mix of one- and two-bedroom units ranging from 850 to 1,125 sf.

“We got a very strong response,” Terry tells the Real Reporter, but perhaps a bit timid about the location outside Route 128, “some life companies shied away, but the banks were able to get their arms around it and there was a lot of interest from them.” Boston Private was especially astute, he says, recognizing the pedigree of the developer, who has a history of doing high-end residential, and in the end, “Boston Private really distinguished themselves to win the business,” beating out a few competitors late in the process, with Terry crediting Senior VP Robin M. Assaf and Senior Commercial Loan Officer Howard Tarlow for getting the mortgage on their institution’s books.

Elsewhere in 2013, HFF crafted a hybrid construction/permanent financing package for TWENTY TWO LIBERTY, BOSTON MA (RENDERING)

Among the many other assignments handled in 2013 was an out-of-town assignment that resulted in a 10-year, fixed-rate loan arranged by Senior Managing Director Dana E. Brome on a golf and resort on Lake George in upstate New York. The financing was done on behalf of New England-based client Ocean Properties Ltd. and provided by Cornerstone Real Estate Advisers backed by the 386-unit complex that includes a fitness center, 18-hole golf course, pavilion, pools and tennis courts.

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LENDERS ACTIVE 2013 continued from page 6

TIAA-CREF. Banks large, medium and small were also active, especially in the core lending arena. In the second half’s largest deals, JPMorgan Chase Bank provided a $185 million refinancing of One Kendall Sq. in Cambridge for the Beal Companies and Rockwood Capital; Wells Fargo Bank Northwest loaned nearly $170 million for the New Balance project in Brighton; and Bank of America originated 14 loans totaling more than $240 million during the final two quarters, ranging JULIA ANNE SLOM from $1 million to $70 million. In between the CMBS, life companies and national banking concerns were community and regional banks, and “competitive” was an oft-used term describing the lending environment among those IAN BRANDON institutions for a constituency estimated at some 200 strong by Fantini & Gorga in its Money Matrix surveys of available lenders.

“Competition continues to ramp up for just about every product type, as both pricing and terms continue to be under pressure,” says Nicholas K. Moise, Senior VP of Commercial Real Estate for Eastern Bank. Last year, Eastern financed more than $450 million in “large commercial real estate loans” (separate from the

ONE KENDALL SQUARE, CAMBRIDGE MA

5 AND 15 WAYSIDE RD., BURLINGTON MA

branch level) in 50-plus transactions, with 75 percent of those being term loans, mostly in the 7-10 year range according to Moise. Almost 50 percent of that total was office and 35 percent multi-family, with the rest being retail, condominiums and self-storage collateral.

“We set our sights on doing downtown office, whether it be the Seaport, Cambridge or the Financial District, so we were able to execute on the plan,” says Moise. “We’re not talking about towers, we’re talking B buildings.”

Some of the B building deals included a $20.3 million acquisition loan for 10 Fawcett St. in Cambridge to Artemis Real Estate Partners and Griffith Properties; $22 million in refinancing for the Abbott Mill in Westford, and a $16.6 million mortgage to Brady Sullivan Properties for

Junction Shop Lofts in Worcester. Eastern wrapped up the year nicely with a $23.5 million acquisition loan to DivcoWest for the San Francisco-based investor’s purchase of the boutique office building in Boston’s Financial District known as One Winthrop Sq. The lender also dabbled in the energy sector, delivering $10.6 million to 265 Pleasant Solar NG LLC and 651 Chase Solar NG LLC backed by a pair of sites in Lunenberg.

TD Bank’s Brockelman terms 2013 a “very good and active year” with lots SUZANNE WALSH ERNO of refinancing occurring across all product types. The industry veteran relays that besides a high percentage of multifamily deals, “we’re seeing some value-add plays, where they’re going in and there’s identifiable cash flow with some upside value and they’re willing to put their equity to work.” TD Bank also contributed a $27.7 million mortgage to Trinity Financial’s Northampton Square project, which will create 593 units of housing.

“We liked the Northampton project on multiple fronts,” Brockelman explains. “One, we like Trinity as they’re a long time client and they’re very good at what they do, and there’s also the BRA (involvement) aspect of it. We thought that was a very good deal.”

Elsewhere, showing its own versatility, TD Bank provided $8.5 million to Spectrum Health Systems, with the mortgage backed by a mixeduse assemblage at 7 Marston Way and 150, 154 and 155 Oak St. in Westborough. Another continued on page 75

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LENDERS ACTIVE 2013 continued from page 74

$4.42 million was loaned to a New York firm, Rugby Realty, to acquire a 58,900-sf office building at 151 Campanelli Dr. in Middleborough. A separate Gotham entity, RD Management, was loaned $16.5 million on a retail property at 480 Boston Rd. in Billerica.

Nouria Energy Corp. borrowed $24.0 million on 326-328 Shrewsbury St. in Boylston and 853855 West Boylston St. in Worcester. Neena’s Lighting luminary Raj K. Dhanda received $15.0 million backed by 1063-1077 Massachusetts Ave. in Cambridge, home to one of his firm’s retail showrooms. In Boston, TD loaned $9.32 million in acquisition financing to Fisher College for its $11.7 million purchase of two office buildings at 10 and 11 Arlington St. near Boston Common.

Brookline Bank, which closed on new loans for approximately $360 million, ended the year with a STONY BROOK OFFICE PARK, WALTHAM MA sprinter’s kick, booking Webster Bank, reports that her institution did “a $75 million in the month of number of deals” with the developer, including December, recounts Darryl the refinancing of 120 Brookline Ave. ($4.7 milJ. Fess, leader of the institu- lion) and 126 Brookline Ave. ($23.5 million) in PETER BROCKELMAN tion’s Commercial Real the Fenway. Overall, the Boston office originatEstate Banking Group. ed about $150 million in loans, she estimates.

“Because there was a lot “It’s more heavily weighted in office but we also of refinancing, and a lot of did retail, industrial and multifamily, so it’s pret(deals) went to Fannie and ty diverse,” conveys Piper. Other noteworthy Freddie, particularly early in Webster deals included $17.5 million in financthe year, we played catch ing to Synergy Investments for 327-337 up,” says Fess. “Towards Summer St.; and an $18.9 million construction the end of the year, we loan to build an assisted living facility Keystone GERARD NADEAU started seeing more multi- Place in Buzzards Bay. family coming back in as the rates for Fannie HarborOne experienced no slowdown makand Freddie started rising with the long-term interest rates.” Brookline Bank also was active across multiple property types, with a refinancing for $8.32 million of Brookwood Financial Partners’ 300 Jubilee Dr. in Peabody; and $6.3 million for a refinancing of Wareham Plaza on the Cape. The Wingate Cos. mortgaged multiple assets in Needham and Newton to the tune of $14.9 million, while another prominent Brookline Bank commitment was $4.5 million for its client to buy a 17,500-sf office condominium at 727-731 Boylston St. in Boston’s Back Bay for $5.2 million from Meritage Properties. The bank also provided a $25.4 million loan to Samuels & Associates for the former Howard Johnson’s Hotel at 1271 Boylston St. in Boston’s Fenway; Speaking of Samuels & Associates, Claudia Piper, Senior VP of Commercial Real Estate at 300 JUBILEE DR., PEABODY MA

ing the switch from credit union to bank, according to Friend S. Weiler, Senior VP of Commercial Lending for the Brockton-based institution. “The conversion had very little impact on the production of this department,” Weiler reports. “We had a great year, we doubled the size of our portfolio, and we probably looked at $100 million in credit, and booked about $60 million of that with 65 to 75 percent of that commercial real estate.”

In 2013, HarborOne was acquisition lender for Micozzi Management’s $5.5 million purchase of a retail center at 451-467 Station Ave. in South Yarmouth, providing a $6.2 million continued on page 76

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note for the 3.6-acre property. High Street Equity Advisors secured $2.88 million on 44 Campanelli Pkwy. in Stoughton;and the South Shore Community Action Council managed by President Daniel M. Shannon borrowed $3.5 million for 71R Obery St. in Plymouth. Weiler says he is looking for two more experienced commercial lenders JOSEPH J. MARCAURELE and is bullish on the bank’s growth potential. “I have a license to grow to about half a billion before I even have to look back,” he relays.

Meanwhile, Digital Federal Credit Union Senior Commercial Lender Paul Carey says that his institution grew 14.8 percent in 2013, adding that multifamily has been the “lion’s

share of the business” with acquisition and ren- Burlington-based RJ Kelly Co. received $19.8 ovation monies provided for multifamily million to facilitate its mid-December acquisiendeavors in Allston-Brighton, Chelsea, tion of 10-20 Burlington Mall Rd. for $30.0 milWaltham and Worcester and cross-border into lion in the borrower’s home town. Burlington’s Manchester, NH. But DCU also financed an white-hot office market was a darling among acquisition and renovation on a hotel in Woburn investors during 2013, and CSB also delivered and a renovation of a manufacturing facility in $16.3 million to 5 BW LLC to buy 5 Burlington the Granite State during the second half of Woods for $21.7 million in another December 2013. “Our year was kind of like the reverse financing. It was a productive month overall for camel—strong in the beginning of the year, a the institution that is located in Harvard Square, little soft in the middle, and then strong in the as another $8.51 million was loaned to Jumbo last couple of months,” Carey observes.

Capital used to buy 35 and 45 Shawmut Rd. in Among DCU loans completed in 2013 was Canton from Campanelli for $11.5 million, A.W. $2.0 million in late December for the $1.93 mil- Perry received $12.0 million for its 1040 lion purchase of 112 Hingham St. in Railroad St. in Revere Rockland property;

by Glenn E. Bailey from and CSB closed out We finished the year with the year with an $11.0 Burbank Realty; $3.0 million to Stella Realty about $80 million (loaned in) million infusion to Partners Hudson LLC Charles M. the Boston and Cambridge developer manager George E. Talanian for his mixedzip codes.

Danis written on 34 use property at 296 Tower St. in Hudson; Cambridge St. in and $6.0 million to Boston near GERRY NADEAU investor Andrian Massachusetts Rockland Trust Shapiro on 14-20 General Hospital.

Linden St., a mixed-use According to Brandon, property in Allston. The hotel loan was $4.15 the surge at the end was only part of the story million for the Hampton Inn hotel at 311-315 of 2013. “We found it to be consistently strong Mishawum Rd. to Woburn Lodging LLC, man- the whole way,” he says. “We never had any aged by Amit N. Patel. real (pause of deal flow) and we worked with a Ian Brandon, First VP of Commercial Real Who’s Who of borrowers, so it was a great year Estate at Cambridge Savings Bank, details for us, and we are off to a great start in 2014.” “another banner year” which saw continued In his crystal ball, Brandon accedes the intergrowth in the CRE portfolio. “In every asset est rate issue must be monitored, but maintains class the intensity has continued on,” he relates, regionally it will do little to slow business. as evidenced by the potpourri of deals delivered “Everybody wants to be in Boston, and as long by the group. CSB provided $17.5 million in refi- as equity continues to pour money into the marnancing for the Residence Inn by Marriott ket, you are going to have lenders there ready Boston in Woburn; $8.3 million to refinance to service them,” says Brandon, among those 1000-1200 Technology Park Dr. in Billerica, a predicting residential condominium developtwo-story office/R&D building for the Gutierrez ment will be among the emerging wrinkle Co.; and a $3.56 million loan to National entering the mid 2010s. “There is no question Development to acquire the 130,000-sf former that large-scale apartment projects are still the continued on page 77 Sealtest Ice Cream facility in Framingham.

“ ”

727-731 BOYLSTON ST., BOSTON MA

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darling of the investment world, but I do think you will see more condominium plays going forward. It is an option that was few and far between not so long ago, but it seems to be taking hold.”

It was another year of CRE lending growth in Boston proper for Rockland Trust Co., according to Gerry Nadeau, Commercial Lending Center Manager for the South Shore bank which originated $350 milFRIEND S. WEILER lion in CRE loans and another $125 million in construction lending.“Boston again provided us with our largest opportunities in commercial real estate,” 1440 BEACON ST., BROOKLINE MA conveys Nadeau. “We finished the year with about $80 million in the Boston/Cambridge zip Home Inc. for its project at 640-650 Concord codes. It was even bigger than the year before Ave. in Cambridge. Back near its South Shore for us.” Nadeau tells the Real Reporter he saw base, where the institution is an active lender, more multifamily activity where clients bought Rockland Trust loaned $5.25 million to facilitate existing buildings to re-work them into condo- the $10.5 million purchase of 97 Libbey miniums, with a number of those conversions Industrial Pkwy. in Weymouth, a four-story office going from industrial into residential. “For us, building acquired by borrower Jason T. Ward the residential activity nearly doubled from from Campanelli.

JPMorgan Chase Commercial continued to 2012,” he says.

In September, Rockland Trust loaned $8.0 expand its platform in Greater Boston during million to Irish investor Frazer Holdings LLC 2013, adding veteran lenders Doug Landry and used to buy a prominent retail asset at 333-335 Carmen Panacopoulos. “In the second half, we Newbury St. in Boston’s Back Bay for $14.7 mil- saw a lot more demand, more trading and also lion. Frazer borrowed another $6.71 million for more refinancing in the region,” reports Senior nearby 801 Boylston St., while Rockland Trust VP and Regional Sales Manager Dudley Benoit. loaned $11.3 million to Neville Communities One late-season commitment was the $30.0 million to Albany Road Real Estate Partners used to buy Springfield Plaza in western Massachusetts for $34.2 million. Albany Road had reaped $10.6 million in financing to buy a pair of four-story office buildings in Braintree last spring, paying $17.2 million. Independence Center Newco LLC was the borrower of $31.3 million in late November for 100 Independence Mall Way in Kingston.

As Boston Private Bank & Trust Co. and First Republic Bank continue to slug it out on the high-end residential front, the two institutions are becoming known in CRE lending circles as well, evidenced in a $16.0 million loan provided by First Republic in September to Dr. Gerald Chan on 39 JFK St. in Cambridge, a Harvard Square office/retail property the elusive investor bought in April for $33.1 million. The Mount Vernon Co. took out a $5.2 million mortgage on 21 Broad St. in Nantucket and separately $10.0 211 CONGRESS ST., BOSTON MA million for 1850 Commonwealth Ave. in

Brighton, and in Allston, First Republic provided Mount Vernon Co. $25.0 million on 60-66 Brainerd Rd. and $29.0 million on 9-23 Griggs continued on page 86

SHOPS AT FIVE, PLYMOUTH MA

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markets, core assets adored by pension fund advisors and multifamily titans such as AvalonBay, buyer of the Arboretum complex from AEW. In between demand for those extremes was—and is—an appetite for midpriced or older properties where value can be created via upgrades to units and common areas.

“There is a limited supply of that around,” says St. John, and bidders across the board are facing a rising number of competitors, as evidenced last October MICHAEL COYNE when AIMCO “got small” and bought a newly constructed apartment building in thriving Watertown for $15.1 million-$343,000 per unit—from Cresset Partners, an adroit developer presently building an even larger multiTRAVIS D’AMATO family community on D Street in Boston’s Seaport District. JLL orchestrated the AIMCO acquisition, and broker Travis D’Amato explains REITs and other institutional sources are reacting partly to the thin inventory and apartment occupancy rates at essentially 100 percent for top venues. “The market is so strong, it can be challenging (to buy urban), but people want to get in any way they can,” D”Amato says. JLL was parenthetically able to pitch listings far larger last year—some of the most substantial apartment sales of 2013, in

WINDSOR GREEN, ANDOVER MA

fact—as exclusive agents for the upscale 193unit Windsor Green in Andover that sold to Hamilton Co. for $62.5 million in July, followed by a $63.1 million deal in early December at Reading Commons where JPMorgan bought out Henderson Global Investors, owners of the 205unit, first-class development fronting Interstate 93 since paying $48.5 million in Dec. 2008.

JLL’s multifamily contingent that includes Michael Coyne delivered nearly $150 million of CRE closings during 2013, a level Capital Markets leader Frank Petz notes compares impressively to zero dollars 18 months earlier when the initiative was launched in a direct challenge to Butler and St. John’s dominance of New England multifamily sales. The total may have been a fraction of CBRE/NE’s results this year, but Petz argues JLL’s platform “made a ton of

progress” establishing JLL as an alternative on center stage for multifamily brokerage. “It’s one thing to say you can handle the big deals and another to prove you can, and we were able to clearly demonstrate more than once that we (are capable) of that,” says Petz, adding, “I think it puts us in a very favorable position for 2014.”

JLL has already completed one deal of consequence to open the year via the purchase of 626 New St. in East Boston by Gerding Edlen, continued on page 79

BOSTON MULTIFAMILY STATS $1,600,000,000 $1,400,000,000 $1,200,000,000 $1,000,000,000 $800,000,000 $600,000,000 $400,000,000 $200,000,000 $H1'12 v H1'13

H2'12 v H2'13

Avg $/Sqft $300,000.00 $250,000.00 $200,000.00

$100,000.00 $50,000.00 $12H1

12H2

13H1

13H2

M U Apartment LT I F A M I LY

QTR Volume YOY % Change # of Props Total Units Avg $/SqFt YOY % Change # of Props Total Units Avg $/Sqft Volume 12H1 $825,983,091 57 4,785 $179,553.95

$

825,983,091

12H2 $1,194,169,699 $ 1,194,169,699 13H1 $1,414,505,913 $ 1,414,505,913 13H2 $

RESIDENCES AT RIVERWALK, AMESBURY MA

$823,322,503 823,322,503

-

57

4,785 $ 179,553.95

-

58 58

71% 71%

40 40

7,159 7,159 $ $212,028.44 212,028.44 5,928 5,928 $ $231,898.10 231,898.10

-31% -31%

47 47

4,229 4,229 $ $252,197.68 252,197.68

* Price per Unit/SqFt calculations are rolling quaterly averages

© 2014 Data courtesy of real capital analytics

$150,000.00

V

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with the developer taking over a parcel permitted for 224 units of housing.

While Windsor Green and Reading Commons are the sort of high-caliber listings they would normally vie for, Butler and St. John shrugged off matters regarding any competition.

“We had plenty to do (last year), and we are really very busy right now serving our clients in 2014,” Butler responds. As it was, even up against JLL and other firms operating in the middle market realm, 2013 proved even more bountiful for CBRE/NE than in 2012 when the outcome “only” topped $900 million.

“We’re happy with the ARBORETUM AT BURLINGTON, BURLINGTON MA JENNIFER ATHAS results,” says Butler of the just-concluded campaign that featured a bit of everything, including an affordable housing project in Framingham (“those are very popular,” reports St. John); plus another $49.0 million spent by PHILIP LAMERE Cornerstone Real Estate Advisors on the Village at Taylor Pond in Bedford, a 188-unit apartment community developed by Criterion Development Partners and Northwestern Mutual.

In Boston, CBRE/NE handled the RICHARD P. ROBINSON $53.5 million sale of James 117 CENTRAL ST., ACTON MA Courts Apartments in the South End. The 136-unit asset at the site of the former Boston College High School was sold on behalf of Harrison Commons LLC, a venture between Kenney Development, National TERENCE M. SCOTT Real Estate Advisors and RF Walsh Co. Closing out the year, CBRE/NE orchestrated the transfer of 133 units at the former Baker Chocolate Factory in Dorchester to an affiliate of Fairfield Residential for $24.1 million.

Regardless of what the price point, multifamily CRE consistently garnered investor attention last year, drilling down to a plethora of exchanges under $10 million, and plenty more ranging from there up to $50 million. The field of continued on page 80 LINDEN SQUARE APARTMENTS, WELLESLEY MA

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brokerage firms serving residential owners in those realms is far more crowded than the Butler/St. John orbit, with middle market stalwarts including Boston Realty Advisors, Marcus & Millichap, NAI/Hunneman and United Multi Family.

The latter entity celebrated its 15th season in 2013, a span over which more than 450 multifamily assets have KEVIN GLEASON been processed through the Quincy based firm. Active this past year in Connecticut , Massachusetts and Rhode Island. UMF negotiated the $3.5 million trade last summer of 66 Mayflower Ave. in Middleborough to the BRENDAN SHIELDS Samia Cos. UMF principals Jason Braun and Richard Cawley also oversaw a $1.23 million sale between Row House Properties and Orest Realty in August of 23 units at 6 South Washington St. in North Attleborough

STATS ‘13

CHARLESBANK APARTMENTS, 120 PLEASANT ST., WATERTOWN MA

and separately in October delivered $3.4 million as exclusive agents for 56-88 Bowdoin Ave. in Dorchester, a 31-unit property that last changed hands for $2.1 million in Aug. 2002.

BRA’s multifamily division led by Christopher D. Sower and Jason S. Weissman is this month concluding three years in operation, during which time BRA has secured numerous high-profile listings in some of Greater Boston’s hottest neighborhoods, including the Back Bay, Beacon Hill and Brookline, and has taken several land-

MULTIFAMILY TOP GUNS 2013 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

BUYER Equity Residential AvalonBay Communities Mack-Cali Hamilton Company BlackRock JP Morgan Intercontinental Real Estate Cornerstone RE Advisers Mayo Group Home Properties Universal Realty (MA) True North Capital Partners Community Builders Inc Fairfield Residential Forest Properties Beacon Companies Taurus Invt Holdings Sanieoff family Chinburg Properties AIMCo Madison Park Development Mill Creek Residential Trst Capital Realty Group The Samia Cos LLC Preservation of Affordable Housing

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

ACQ. AMT. (IN $M) 788.9 283.2 149.6 117.7 75.1 63.1 50.5 49.1 42.7 40.3 29.9 29.9 27.8 24.1 22.3 22.0 20.3 19.4 15.4 15.1 13.4 12.4 9.5 8.9 7.8

# PROPERTIES 8 6 2 3 2 1 1 1 3 1 2 3 3 1 1 1 1 1 1 1 1 1 1 3 1

mark multifamily buildings across the Charles River in Cambridge’s Harvard Square out to market. Deals of distinction completed last year included $6.7 million for a Fenway apartment building damaged by fire that still generated more than 200 informational packages, and the $7.5 million exchange of 32 units at 256 Parker Hill Ave. near the Longwood Medical Area. Twelve units at a wellregarded Brookline condominium near Coolidge Corner reaped $3.3 million, and late in the season, an CARL CHRISTIE apartment building at 43 River St. in the Hub went for $1.65 million to Aeneas REO LLC, managed by George Dabney, on behalf of BRA client Bernard G. Berkman, who had paid $60,000 for the building in Dec. 1986.

DAN MCGEE With the $4.5 million disposition of a Beacon Hill apartment building having just concluded in late February ($562,500 per unit), Sower says 2014 is already shaping up for another bountiful season on BRA’s home turf, but the HENRY LIEBER multifamily team continues to extend its footprint geographically. The most overt result of that campaign occurred in December when Sower and Weissman advised the Mount Vernon Co. in its $15.9 million harvesting of two Rhode Island apartment communities to Framingham-based Taymil Partners. continued on page 81

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“It was a nice way to finish up the year,” acknowledges Sower of a transaction involving 194 units in East Providence.

NAI/Hunneman Commercial Co. has done its share of larger assignments this decade, but the firm is especially active in CRE sales up to $10 million, with multifamily a substantial piece of that business. The team of Gina Barroso, Scott Dragos, Douglas Jacoby, Michael McLaughlin, David Ross and Robert Tito Sr. advised one client in the transfer of 71 units at 117 Central St. in Acton that had been held by the same fam40-46 PARK ST., NEWTON MA ily since 1977. The six-buildJASON BRAUN ing complex on 26 acres Wellesley, an established apartment community was bought by True North that appears to be headed for a condominium Capital Partners, a private play, or so Levey suggested in a Dec. 6th Real entity led by Jeffrey Bruce Reporter article following his firm’s $25.6 million that has been building its purchase of the 64-unit development from regional apartment portfo- Eastern Development. “It’s a fantastic opportunilio over the past three years, ty,” Levey said in the article that relayed his own buying on the final day of firm’s portfolio growth.

2012 a 92-unit property in Such investors who RICHARD CAWLEY Woburn for $13 million. have been building market True North made another big purchase last share should be envied, or year in paying $21.2 million for apartments in so it might seem given the Brighton at 286 and 288 Chestnut Hill Ave. lament heard among most ($9.0 million) and in Somerville at 136-138 multifamily brokers, includHighland Ave. ($12.2 million), backed by $16.7 ing NAI/Hunneman’s Ross million in financing from East Boston Savings DENNIS KELLEHER and colleagues Carl Christie Bank. Totaling 116 units, the units were all and Daniel McGee, who did complete several acquired from the Niles Co., a venerable family trades in 2014, but had to toil to accomplish that based CRE operation who had held the proper- feat. “The hardest thing is finding inventory,” READING COMMONS, READING MA ties since the 1950s. says McGee, with Christie attributing the mill sell their asset to Chinburg Properties of New True North is among several private investors drought to the protracted sell-off that may be Hampshire for $15.4 million. “I wish we had active in regional multifamily since the 2008 running out of owners willing to part ways with more of those,” Christie remarked of units he recession hit, with another making further their assets regardless of the sub-atomic capital- terms “condo-quality” and in a project chock full inroads last year being Stuart Levey of Newton ization rates. “People just don’t want to let go,” of amenities such as a fitness center, library and whose Universal Properties went through explains Christie. “They can’t part with the lounge indoors and carefully manicured grounds CBRE/NE to acquire Linden Square Townhomes in income, and they don’t know where they would with a bike path, grilling area and picnic tables.

Also in late 2013, McGee teamed with put the money if they did sell.”

A can-do residential developer bought a land Robert Tito Sr. to broker 44 Worcester apartsite on Chelsea Street in East Boston permitted ments for $2.4 million to Omodi Properties from for 17 units, with Christie and McGee’s client, their client, Sigmantra LLC, an entity managed RCG Associates, reaping $1.07 million for 49-51 by Yu-Feng Wei of Carlisle. The buildings at 17Chelsea St., a parcel just two blocks from the 23 Chandler St. are among “the most signifiMBTA Blue Line station at Maverick Square. In cant architectural landmarks in downtown another NAI/Hunneman trade, five newly con- Worcester,” Tito conveys of the assets he adds structed condominiums at 54 Bay State Rd. drew interest from local and regional investors brought in $2.8 million, and the Christie/McGee “due to its size, proximity to downtown and machine produced a big winner late in the year, upside potential” going forward. “They will only assisting the owners of an 87-unit Amesbury continue to appreciate in value as redevelopMIDDLESEX CROSSING APARTMENTS, BILLERICA MA apartment development carved out of a former ment of other neighboring assets continues.”

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tan Boston product among the most highly prized, “it’s a great time to be a borrower,” adds O’Donnell. “A typical middle market loan would have banks, Fannie, Freddie and conduits looking, and sometimes FHA and insurance companies as well,” says O’Donnell, whose group is a unit of the Fantini & Gorga mortgage banking firm and a specialist in FHA loan products.

Fantini & Gorga arranged loans across the spectrum of acquisition, construction and refinancings in 2013 from a wide variety of funding sources.

PAUL DONAHUE Representative transactions featured a $16.5 million construction loan from Eastern Bank arranged by Managing Director Derek Coulombe and President John Gorga for development of the Residences at Malden Station, an 80MARA GELTZEILER unit, transit-oriented apartment property; $17.05 million from Commerce Bank & Trust Co. arranged by Managing Director Casimir Groblewski for Cabot Crossing, a 252-unit residential community bought by Casey Real Estate, Taurus Investment Holdings and the Water Street Investment Group from John M. Corcoran and Co.; and $22 million in permanent financing for the redeveloped Abbott Mill in Westford, which consists of 131

COBBLE HILL APARTMENTS, SOMERVILLE MA

ALTA AT BRIGHAM SQUARE, ARLINGTON MA

luxury apartments. Coulombe and O’Donnell arranged that note provided by Eastern Bank.

Multifamily originations were relatively flat for most of the country compared to 2012, but such was not the case regionally. “Boston is a “pick six” city and a lot of (investors) are coming here from a lot of different places,” says Jim Murphy, a 40-year CRE veteran and managing director of NorthMarq Boston. “It’s the city that everyone seems to want to come to. The foreign capital is here, the French and the Germans and the Dutch and the Chileans are all here looking at property.

There are people from all over the world looking to invest in the city of Boston today.”

Northmarq’s local unit did a pair of large deals in the latter half of 2013, including a loan

arranged by Senior VP Ed Riekstins providing construction-to-permanent financing of $30 million for Tidewater at Salisbury, a 222,000-sf affordable housing complex at 191 Beach Rd., in Salisbury. The mortgage was structured for a construction period of up to 36 months and a 10-year term following the conversion date with 30year amortization. The firm also arranged a $17 million deal in Providence, RI, through FHA. Senior VP Andrew Gnazzo of Walker & ELLEN KANTROWITZ Dunlop, which completed $5.8 billion in multifamily loans in 2013, reports that “banks have been very aggressive of late, as they can borrow money at close to a 0 percent interest rate,” and he adds that “across the country, Fannie Mae and Freddie Mac’s numbers were down, but we’re optimistic for 2014.”

Fannie Mae funded 48 percent of Walker & Dunlop’s transactions last year ($2.76 billion), marking the second consecutive year the firm was ranked as the largest Fannie Mae DUS Lender. Freddie Mac accounted for 29 percent ($1.71 billion) of their volume, followed by HUD at 20 percent (S1.14 billion). Locally, the Needham office completed $349 million in transactions in 2013, with all but $30 million for properties in Massachusetts, New Hampshire and Rhode Island. “We saw some effects from rising rates last year, but I would also say that some of the local volume was down, and that had to do with increased competition from life companies and CMBS as well continued on page 83

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as banks,” says Gnazzo. But, he reports, many of the downtown acquisitions were made by cash buyers. “A lot of the Boston product that sold last year was fancy stuff that sold in town and went to institutional owners, and much of that they didn’t put debt on,” he says. “There were a lot of unleveraged buyers in the Seaport and TD Banknorth Garden and places like that.”

Among the deals arranged by Walker Dunlop were a $42.9 million redevelopment loan from HUD for BC Colonial Estates, a 500-unit affordable housing owned by Beacon Communities; a $42.3 million HUD loan arranged by Senior VP Ellen Kantrowitz and Vice ABBOTT MILLS, WESTFORD MA President Chris Rumul for Cobble Hill Apartments in Somerville; the $33.8 million refinancing of Shrewsbury Commons, a DEREK COULOMBE 384 apartment complex in central Massachusetts; and a $25.8 million HUD loan for Millbrook Square in Arlington, comprised of 146 assisted living units.

Paul Donahue, Managing Director of Mortgage Banking at JOHN GORGA Centerline Capital Group, describes 2013 as “a year of substantial ups and downs, with the interest rate moves starting in June through July and then the moderation of those moves. CLIFFSIDE COMMONS, MALDEN MA A lot of transactions got delayed with the rates TIM O’DONNELL bouncing around, so the rates you could have gotten in March were now 100 basis points higher in August. For permanent lenders, that’s really the No. 1 story last year.”

The Centerline team of Donahue, Will Anderson and Mara Geltzeiler provided a $24 million loan to an affiliate of Brighton-based Intercontinental Real Estate Corp. to acquire Brigham Square, a 116-unit mid-rise style apartment complex in Arlington. “The Arlington asset is very useful as a template in that it was a lowleveraged loan, seven years, interest only and that’s a very common path for the institutional buyers of the better assets,” says Donahue.

“They end up with very low payments and a very low risk profile for their financing.” continued on page 84 CABOT CROSSING, LOWELL MA

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Arbor Commercial Mortgage Vice President John Edwards says that after the rates settled down, borrowers began to aggressively refinance, and towards the end of the year, he saw a significant pickup in acquisitions. “Up until May it was probably 60-40 refinancing to acquisitions, but with the spike in rates things dropped off a little bit as acquisitions had to be reset, and in August, anyone who had been sitting on the sidelines in June and July refinanced to make it 75 to 80 JIM MURPHY percent refi. Then in December, it was a whole bunch of acquisitions.”

Fannie Mae was his strongest lending product last year, Edwards recounts, and he arranged loans via the lender for $4.26 million Border City Mills ED RIEKSTINS Apartments in Fall River; a $1.85 million loan for Rogers Common Apartments in Tewksbury; a $2.65 million loan for Stone Ridge Apartments in North Providence, RI, and a $2 million loan for the Meadows Apartments in Simsbury, CT. There was a bit of a lull in the summer months, according to industry professionals who saw banks and life companies rush in to fill the void. Later in the year, the agency options were back on the table.

Senior VP Michael Edelman oversees Beech

VILLAGE AT PROPRIETORS GREEN, MARSHFIELD MA

BORDER CITY MILLS APARTMENTS, FALL RIVER MA

Street Capital’s northeast region, and he agrees that 2013 was “steady throughout the year with a slowdown over the summer when the agencies put the brakes in lending.” Edelman estimates Beech Street’s loan volume for last year to be approximately $100 million, including an $11.3 million fixed-rate, 10-year Fannie Mae conventional loan for the acquisition of the Carriage House and Coach House Apartments, totaling 149 units, in Chelmsford

by Briarcliff Property Management. Beech Street also closed a $9.5 million FHA 223(f) loan to refinance Marion Square, a 44-unit multifamily complex in Brookline, for the Nordblom Co., as well as $7.4 million in Fannie Mae convention-

al funding to refinance a portfolio consisting of two Boston-area (Cambridge/Allston) apartments, totaling 56 units.

John C. Kelly of CBRE/NE’s Structured Debt and Finance Group recalls 2013 fondly from a business standpoint in multifamily lending. “The pace was very good all year, with some (shifts) in the middle and a strong finish,” the veteran broker tells the Real Reporter. Early on, CBRE/NE delivered $45 million to finance the $55 million purchase of 478 apartBRETT PAGANI ments in Providence, RI, by Gaia Real Estate, which was introduced to the deal by CBRE/NE multifamily brokers Simon J. Butler and Biria St. John. “This transaction represented the complete capital markets capabilities that we offer all our PAUL NATALIZIO clients,” says Kelly of the monies used to acquire Winchester Park and Winchester Wood. The New York-based buyer intends to refurbish the two properties bought in what is being touted as the largest multifamily sale in the Ocean State since 2005. Constructed between 1971 and 1974, the buildings will be cared for by Gaia Property Management.

A Fannie Mae DUS, Freddie Mac and FHA licensed direct lender, CBRE/NE leverages those programs with the CMBS, banks and life company relationships Kelly has culled in more than continued on page 85

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MULTIFAMILY INTEREST UP continued from page 84

10 years funding multifamily real estate throughout the region, during which time he has completed more than 100 deals for total consideration exceeding $500 million. This past year besides helping the New York-based buyers of the Rhode Island apartments, Kelly arranged $20.4 million for Universal Realty of Newton that fueled owner Stuart R. Levey’s $25.6 million purchase of the Linden Square Townhomes in Wellesley, Financing was secured through Brookline Bank on the 64-unit complex now being eyed as a condominium conversion.

Kelly completed another loan of $36.0 million from CBRE Multifamily Capital LLC to Qianlong Management after that firm paid $60.0 million for Cliffside Commons in Malden, an apartment community that was divested by Guardian Life Insurance Co. through the multifamily sales team. Bringing Kelly in nearly two years ago was partly done to offer financing alternatives in-house to prospective buyers, and MARION SQUARE, BROOKLINE MA Butler says the arrangement has proven valu- lary services known as the Green District that focuses on urban living in a sustainable environment. Through CRC, Mount Vernon Chairman Bruce A. Percelay received separate loans of $25 There are people from all over million from First Republic Bank used to refithe world looking to invest in nance “The Edge” and another $26.9 million from Commerce Bank & Trust Co. on “The Icon.” the city of Boston today.

“It’s a phenomenal project,” Natalizio says of the initiative that today involves 500 apartments in six buildings, the final one of which is JIM MURPHY, DIRECTOR under construction (see story, page 49).

Northmarq Boston CRC also assisted investor Jeff Bruce of TrueNorth Capital Partners in the purchase of able. “It’s a real resource for our clients,” he two apartment properties, one in Somerville and says in noting several have engaged Kelly’s the other barely a mile south from the Green group for those services.

Cornerstone Realty Capital had an eventful year as well, with the firm relocating from Stoneham to Lexington but not letting the disruption keep the operation from another recordsetting year helping borrowers secure “innovative financing” for a variety of product, with a concentration on multifamily. “We were busy, and things haven’t really slowed at all,” founder Paul Natalizio says of a year that marks his 10th working with colleague Brett Pagani. The team over the past two years has added Debbie Orloff and Nick Aiken to handle the increased load.

CRC has a stable of loyal clients who benefit from their deals being offered up to a variety of funding sources, and one such firm has been the Mount Vernon Co., a Boston-based developer recasting a once-gritty industrial area of Allston into an enclave of apartments and ancil- 136 HIGHLAND AVE., SOMERVILLE MA

“ ”

District at 286-288 Chestnut Hill Ave. A $17.2 million loan package from East Boston Savings Bank was put together for the borrower.

Chestnut Highland LLC also acquired 136-138 Highland Ave. in Somerville from the Nordblom family whose ownership in the assets had extended to the 1950s. “Cornerstone was able to arrange attractive and flexible financing for this deal,” Bruce later marveled of the sevenyear mortgage that carries “an aggressive fixed rate” with a 30-year amortization and enough heft to fund building improvements and an earn-out for future income growth.” Bruce calls CRC “a valued partner of True North” that has continued on page 107

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ONE GREENWAY continued from page 38

eral low income tax credits and conversion of the loan to a mini-perm mortgage.

First targeted for a Q1 2013 conclusion, the loan closing did not occur until November, with $114.7 million assembled by HFF and another $3 million delivered by public funding. HFF brought together PNC Bank, People’s United Bank and Boston Private Bank & Trust Co. for the majority piece. Designed

by ADD Inc. and being built

by Suffolk Construction, the first building will rise JANELLE CHAN 21 stories and is slated for completion in 2015.

Janelle Chan is executive director of the Asian CDC. NBF Vice President of Development Sean Sacks says his firm knew going in that cobbling together a viable financing package EMILY YU would present challenges beyond “so many others,” such as gaining control of Parcel 24, then getting design approval and public support in a highly charged environment. ACDC was “a terrific partner” intent on making sure the Big Dig’s replacement delivers an environmentally sensitive, people friendly

LENDERS ACTIVE 2013 continued from page 77

St. (see related story, page four). Also, the Davis Cos. received $14.0 million in financing on several condominiums at 40 Beacon St. in the Back Bay and Burton Realty Trust borrowed $3.0 million on a mixed-use development at 971-981 Tremont St. Not to be outdone, Boston Private’s CRE operation was busy throughout the region from start to finish. Among the bank’s notable transactions was loaning $30.5 million to Synergy Investments on its fiefdom of downtown commercial buildings. Loans were written on 109119 Broad St. and 85-87 Wendall St.; 209-217 Congress St. and 96-104 High St.; and 100-124 North Washington St. Another well-known local firm, the Nordblom Co., was loaned $25 million in August for its apartment building at 1440 Beacon St. in Brookline.

Boston Private closed out the season with an eventful December, delivering a $37.0 million loan on 219 High St. and 141 and 143

THE ANNUAL REVIEW atmosphere, he observes, stressing it is a goal his firm was in concert with in backing One Greenway as the final piece of its Urban Strategy America Fund. A pure market-rate housing project would be far easier to do in the current climate, but Sacks says USAF “aspires to do projects that do well” civically, maintaining returns can be had so long as the right resources are assembled in praising HFF on “a fantastic job” bringing the different lenders

THE REAL REPORTER ®

together and meeting the myriad of regulations, not to mention addressing a highly unusual percentage of affordable units.

Such endeavors “are not for everyone,” concurs Sacks. “It can be really tough keeping everyone on the same page when you have that many stakeholders involved . . . (handling) all that input can extremely challenging, and might take longer to do, but the results can be very rewarding, as it is with One Greenway.” The

USA Fund mission statement pledges to “provide our investors with a competitive return . . . while striving to make a significant and positive economic, social and environmental impact on the areas where it invests.”

One Greenway maxes out the USA Fund vehicle, approximately half of which is invested in multifamily, Sacks estimates, with other properties including Seaside Village in East Lyme CT. The focus is East Coast, and trickles down to a Florida office building, with the fund launched in 2004 backed by $190 million in equity investments.

To Sacks, One Greenway is a fitting way to wrap up the vehicle. “It is nice to see people who were displaced so many years ago have the day come where they can take back their neighborhood,” he says. “That was a great aspect of being involved.”

Cassum relays a similar sentiment, stressing HFF’s “passion” in helping Chinatown residents and its clients obtain the linchpin financing to break ground validates the company’s emphasis on delivering complex debt and equity solutions. “That is where we excel, the complicated deals that have a lot of issues to address and take time to get done,” he says. “We do have a lot of experience with those types of projects, and while there were a lot of twists and turns along the way, we always felt we could come through in the end (on One Greenway), which is what is most important . . . and we are proud to say we were able to accomplish that.”

Longwater Dr. in Norwell for Foxrock Longwater II Realty LLC. Another $6.5 million acquisition loan was provided to Calare Properties for 380 South Worcester Rd. in Norton on Dec. 23rd (see Page 26) and residential developer Robert E. Moss borrowed $14.8 million for a new subdivision at 100-900 Madison Pl. in Shrewsbury, a loan inked on the final day of 2013.

The legions of lenders in New England is seemingly endless, and among the numerous banks who distinguished themselves regionally in 2013 was People’s United Bank, author of more than four dozen Bay State CRE loans written on assets from Amesbury to Chicopee that included $32.0 million for a hotel asset at 385 and 387 Winter St. in Waltham; $24.5 million to enable the $29.0 million purchase of a 58acre shopping plaza in Plymouth by a New York investor; and $45 million to Intercontinental Real Estate Corp. for 141 Portland St. in Cambridge. Other notable clients included Great Point Interests, the Hamilton Co., Michael Rauseo and Synergy Investments.

Avidia Bank also handled multiple deals,

providing investor Charles D. Katz a $6.07 million mortgage to facilitate the $8.1 million purchase of One Monarch Dr. in Littleton, a 103,000-sf office building acquired in September. Linda Currie borrowed $4.2 million to buy 287 Turnpike Rd. in Westborough from Irene A. Schmitt for $6.0 million; and Avidia participated in an SBA 504 loan with Granite State Economic Development Corp. that totaled $3.85 million used to secure 15 Liberty Way in Franklin at a price tag of $4.32 million. The 18year-old industrial building encompasses 92,425 sf on a 15-acre parcel.

Woburn-based Northern Bank & Trust is another prolific CRE lender in the area, with deals of note last year including $8.26 million to Jon P. Cronin for 616 East Fourth St. in South Boston. Another South Boston deal involved the $3.25 million mortgage on a land parcel at 7585 Northern Ave. bought by MS Seaport Block F LLC, managed by John B. Hynes III. Out of town, NB&T loaned Equity Industrial Partners $11.8 million for a sprawling development at 100 Simplex Dr. in Westminster.

“

That is where we excel, the complicated deals that have a lot of issues to address and take time to get done.

”

RIAZ CASSUM Holliday Fenoglio Fowler

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includes recasting it as ‘The Arsenal Project.’

“Our ultimate goal is to help the town realize its vision for transforming the Arsenal district . . . into a vibrant residential and commercial destination where residents and visitors will enjoy local shops, restaurants, cultural venues and easy access to the Charles River Reservation," BP CEO William P. McQuillan offered in a statement issued following his firm’s deal. The operation is already taking steps to HERITAGE PARK PLAZA, EAST LONGMEADOW MA refurbish the complex and provide its own LWP envi- requiring TLC and a leasing strategy to foment CHRIS ANGELONE ronment focused on local needed returns. Although the marquee quality cuisine and community seen in prior years was not as evident, there interaction. Retailing expert was an abundance of late-season transactions, Prellwitz Chilinski has been according to CBRE/NE principal Christopher retained to institute the Angelone who says his group had “a really busy changes. Other members of second half” once investors recognized the lack BP involved in the Arsenal of options.

Project are principal Mark “You saw an uptick because investors that Deschenes, Rhonda were fixated on close-in suburban locations WILLIAM MOYLAN Gleason, Jeff Heidelberg realized in order to get deals done and chase and Alejandro Miranda. better yields, they needed to go out on the risk Having landed the mall just as athenahealth spectrum in terms of quality and geography to committed to Watertown long-term, the pur- acquire properties,” observes Angelone, who chase would appear particularly prescient given along with fellow retail expert/principal William an anticipated surge of business and residential Moylan, closed on a half-dozen deals in the late growth between Brighton Center and going of 2013. Bay State transactions included Watertown, and what retail experts deem a The Shops at 5 in Plymouth (a 500,000-sf shopdwindling opportunity inside Route 128, a ping center featuring a BJ’s Wholesale, IHOP, dearth forcing private capital and debt sources Kohl’s, PetSmart and TJMaxx) in which CBRE/NE to explore outlying markets and properties advised seller Retail Properties of America and

SILVER CITY GALLERIA, TAUNTON MA

procured the buyer, Inland Real Estate Group, in a $29 million exchange of the asset described by some as an underachiever despite several notable tenants.

The trend is also evident west of Boston, with one major deal being the acquisition of Springfield Plaza (Stop & Shop, Kmart, and TJ Maxx) by Albany Road Real Estate Partners for $34.2 million. In neighboring Connecticut, Eastdil brokered the sale of Stop & Shopanchored Enfield Commons from NY-based Katz Properties to Phillips Edison-ARC Shopping Center REIT Inc. as part of a $156-million portfolio buy; in Bethel, Cedar Realty TR acquired the 101,000-sf Big Y shopping center for $34.5 million, ($341 per sf) from Ceruzzi Properties; and the 80,000- sf Stop & Shop-anchored Elmwood Plaza in West Hartford went to Inland Real Estate Group for $14.2 million ($179 per sf).

Albany Road has embraced retail and tertiary venues since its inception in midsummer 2012, with its fund that now tops $100 million in holdings having launched the program with the $8 million purchase ($62 per sf) of an underwater shopping center in July 2012. President Christopher J. Knisely has an extensive retail background that included years at the Koffler Group (Woburn Mall), and while the portfolio aims for diversity in product type, he says there was “no hesitation” when the chance to heap a 440,000-sf shopping center onto the pile at a basis of barely $75 per sf materialized. Knisley says he was attracted by the enduring nature of an infill property that dates to the 1950s and has housed a Stop & Shop since the late 1980s.

“Not only has the center remained leased, it has done so to the same core group of major tenants,” he observes, with the eight largest tenants who fill 62 percent of the space there an average of 23 years. “We are very pleased to continued on page 88

88

THE MALL AT WHITNEY FIELD, LEOMINSTER MA

RETAIL GRADING BETTER continued from page 87

have added Springfield Plaza to our growing portfolio,” Knisely told the Real Reporter after not only cresting $100 million in its purchase, but also eclipsing one million sf of inventory.

“Both are exciting hurdles for us to have cleared in our relatively short history,” says Knisley. Backed by $30.0 million from JPMorgan Chase Bank, Albany Road is implementing a $5 million capital JUSTIN SMITH improvements campaign at the development “while still maintaining very attractive cash-on-cash yields for our investors,” a constituency of high net worth sources who helped the deal become fully subscribed “in a very short period of time,” according to Knisley.

Cushman & Wakefield Executive Director Geoff Millerd, one of the Northeast’s top retail brokers, is another veteran who says investors are recalibrating requirements. “The A assets are getting so expensive and there’s so few of

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THE REAL REPORTER ®

HANNAFORD PLAZA, UXBRIDGE MA

them and there’s so much (investor) money, that people are redefining what it is that they want to buy, and their redefinition is, ‘I’ll go to secondary markets’ or ‘I’ll buy non-supermarket anchored (assets),’” affirms Millerd. “So it’s changing the landscape of the buyers, and while the landscape before had been primarily private in nature using debt, it’s now private guys using institutional capital like on our deal in Uxbridge.”

The 75,975-sf Uxbridge Center shopping plaza fetched $15.8 million for seller Unison Realty Partners, who had acquired the property in 2011 at a price tag of $11.2 million. It was the first retail buy for Chestnut Realty Partners, a Springfield-based real estate investment firm that has focused on industrial and multifamily since its inception in 2012. The Hannafordanchored property is fully leased and does not require upgrades, according to Millerd, who handled both sides as head of the retail team that includes Associate Justin Smith and Financial Analyst Paul Penman.

CRP principal William Steinberg says he considers the Uxbridge investment to be institutional caliber, but the asset apparently did not meet

their exacting formula. “If it had been 15 miles closer to the (Massachusetts Turnpike), I think (institutions) would have been all over this,” opines Steinberg, outlining that his firm is seeking quality product but is prepared to bend if the right opportunity comes along. “They did a great job,” Steinberg says of C&W being able to characterize the value of that asset in achieving the client’s goals.

As further evidence of the appeal of groceryanchored retail assets in secondary markets, Katz Properties acquired Heritage Park Plaza, an 116,850-sf Stop & Shop-anchored shopping center located along Route 83 in East Longmeadow for $27.3 million (about $235 per continued on page 89

BOSTON RETAIL STATS $1,000,000,000 $900,000,000 $800,000,000 $700,000,000 $600,000,000 $500,000,000 $400,000,000 $300,000,000 $200,000,000 $100,000,000 $H1'12 v H1'13

H2'12 v H2'13

Avg $/Sqft $700.00 $600.00 $500.00 $400.00

$200.00 $100.00 $12H1

12H2

13H1

13H2

R ERetail TA I L

QTR VolumeVolume YOY %YOY % Change # of Props Units Avg Avg$/Sqft $/SqFt Change # of Props TotalTotal Units 12H1 $447,553,365 34 1,724,050 $ 447,553,365 34 1,724,050 $ $620.95 620.95 12H2 $862,699,802 55 3,780,122 $ 862,699,802 55 3,780,122 $ $418.05 418.05

141 MAIN ST., FOXBOROUGH MA

$ 362,579,619 13H1 $362,579,619

-19% -19%

42 42

2,833,836 $ $315.07 315.07 2,833,836

$ 814,359,506 13H2 $814,359,506

-6% -6%

60 60

3,455,553 $ $511.69 511.69 3,455,553

* Price per Unit/SqFt calculations are rolling quaterly averages

© 2014 Data courtesy of real capital analytics

$300.00

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RETAIL GRADING BETTER continued from page 88

sf). Aided by $18.2 million in financing from Life Insurance Co. of the Southwest, the center’s tenant roster includes national and regional retailers including Aspen Dental, Cost Cutters, Dollar Tree, Game Stop, GNC, H&R Block, iParty, Panera Bread, and 99 Restaurant & Pub. Despite the limited inventory, C&W closed another trio of Massachusetts deals in 2013, with Eastern Real Estate harvesting a 65,000-sf Stop & Shop plaza in Foxborough at 141 Main St. to RK Centers for $6.35 million ($98 per sf) and a 10,125-sf CVS to National Development for $7 million, at $691 per sf further testament of the favor retail SPRINGFIELD PLAZA, SPRINGFIELD MA enjoys when blessed by outstanding. “It has a lot of issues,” one industry the $118 million its vanquished owners paid in solid credit tenants even in professional familiar with the asset says of 2002 for the underachieving property that was WILLIAM BECKEMAN secondary markets. Case in Diamond’s rough run. further saddled by a mountain of debt obtained point would be Millerd and Speaking of distressed retail, the Silver City in 2005. “It needs a lot of work,” the expert his team negotiating the Galleria shopping mall in East Taunton was sold maintains but noting the new ownership has a sale of Burlington Town for $22.1 million by special servicer JE Robert history of similar turnaround ventures.

Center in northern Vermont, Cos. to a consortium of Eastdil was also which was acquired for $25 investors broker for an asset including million by a joint venture of MGHerring similarly overleveraged Group, private investment firm Contrarian Capital We were very pleased to but in far better condiDevonwood Investors and Management LLC of have added Springfield Plaza tion when the Mall at AUBREY CANNUSCIO Mountain Development Greenwich, Conn., and Whitney Field went for to our growing portfolio. $36.1 million in early Corp. The 230,000-sf shopping center sold for Tricom Real Estate General Growth Properties is anchored by a Group of Dallas in a June. Working with Macy’s. Also in Vermont, special servicer LNR complicated, lengthy principal Christopher CHRISTOPHER J. KNISLEY Properties engaged C&W to disgorge the special process that Eastdil Phaneuf on that Albany Road Real Estate servicer there of Rutland’s distressed Diamond Secured assignment were ultimately Run Mall, an assignment leading to a purchase coaxed over the finish Eastdil Capital Markets

by Bon Aviv Investments for $4.3 million, a pal- line at mid-year. Silver City was more than one- colleagues Brian Barnett, Peter Joseph, Sarah try $11 per sf. The mall, anchored by JC Penney, third vacant and featured a lone restaurant Lagosh and James McCaffrey. The 657,000-sf Sears and Kmart, previously sold for $53 million beyond the mall’s food court despite a tenant property that was foreclosed on in Nov. 2010 in 2007 to Gemini Real Estate Advisors. At the roster including Best Buy, JCPenney, Macy’s and had last changed hands for $81.9 million in end of 2012, the owners surrendered the mall to Sears. One retail investor expressed surprise at May 2007. its mortgage holder with more than $30 million the pricing achieved despite being a fraction of Another troubled central Massachusetts retail site appears poised for better times after KeyPoint Partners helped Torchlight Loan Services unload 476 Boston Turnpike (Route 9) in Shrewsbury to a Michigan group intending to write a new chapter for the erstwhile Border’s Books store by recasting it for multi-tenanted use headlined by a Buffalo Wild Wings. “With the planned improvements and tenancies in queue, 476 Boston Turnpike will be a viable destination,” KeyPoint Vice President of Leasing Don Mace predicted after orchestrating the mid-summer disposition to B-W Warrenville Operations LLC, with $3.5 million needed to buy the 24,750-sf property on 3.5 acres that continued on page 90 CENTRE STREET VILLAGE, DANVERS MA

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Torchlight foreclosed on in Jan. 2012. Crystal Lake Bank & Trust Co. loaned the buyers $2.95 million for acquisition and redevelopment.

In other 2013 retail deals of note, the former Johnnies Foodmaster retail plaza on the Revere/Malden line went to Boston HarleyDavidson, which acquired the 120,000-sf property for $7,05 million. Steve Woodworth of Wyman Street Advisors represented Boston Harley Davidson in those negotiations along with Robert J. Borgman Jr. and Scott Dragos, Douglas Jacoby and Michael McLaughlin were exclusive agents for the seller, Squire LLC. A new Harley Davidson dealership will be constructed there where a Bally’s Fitness Center previously stood, with the mid-September closing following six months of due diligence and permitting of the 7.5-acre site, recounts Woodworth, who has since gone on to join Studley Real Estate.

Lowe’s Home Centers purchased their 117,000-sf unit at 25 Computer Dr. in Haverhill from Providence-based KGI Properties for $11.3 million--$96 per sf for a store that never opened when the recession hit the home improvements arena. Burlington-based RJ Kelly added its first

STATS ‘13

561 SQUIRE RD., REVERE MA

retail asset to an expanding portfolio, paying $8.1 million for the 31,850-sf Vinebrook Plaza at 112 Mall Rd. in its hometown, a community where RJ Kelly made a big splash last year in buying several other assets. The strip center is tenanted by strong credit retailers Dunkin Donuts, Newbury Comics and Supercuts.

Multiple upgrades are planned for the property

RETAIL TOP GUNS 2013 1

BUYER Spirit Realty Capital

CAPITAL GROUP Public

ACQ. AMT. (IN $M) 110.2

# PROPERTIES 6

2

ASB Capital Management

3

Blatteis & Schnur Inc

Institutional

90.2

4

Private

90.2

4

4

Realty Income Corp

Public

81.0

14

5

Boylston Properties Company

Private

69.3

2

6

Wilder Cos

Private

69.3

2

7

Jonathan Bush

Private

69.3

2

8

Jamestown Properties

Institutional

67.8

2

9

Regency Centers

Public

40.9

1

10

Charter Realty & Development

Private

40.9

1

11

ARCP

Public

38.2

1

12

Vintage Capital Group

Private

36.1

1

13

UrbanMeritage

14

Sun Realty Capital

Private

35.2

3

Institutional

29.0

1

15

Kimco

Public

28.3

1

16

Blackstone

Equity Fund

28.3

1

17

Contrarian Capital Management

Equity Fund

25.5

1

18

MGHerring Group

Private

25.5

1

19

Tricom Real Estate Group

Private

25.5

1

20

L&B Realty Advisors

Institutional

25.2

2

21

Novaya Ventures

Private

25.2

2

22

Kroenke Group

Private

23.9

1

23

Paul V Profeta & Assoc

Private

22.5

1

24

CBRE Global Investors

Institutional

21.5

1

25

RK Centers

Private

18.0

2

that sits across from the Burlington Mall.

Just north of there in Chelmsford, Winstanley Enterprises has begun demolition and overhaul of an aging 60,000-sf retail property being upgraded with new buildings, landscaping and tenants. The 8.5 acres at16-20 Boston Rd. were purchased in August for $7.6 million and backed by $4.5 million from People’s United Bank.

Besides new storefronts, a traditional brick façade and clock tower are among the design changes and ornamental features “that will make the new Chelmsford Town Center a downtown destination,” Winstanley principal Adam Winstanley conveys in a press release announcing the project’s construction that is slated for completion

by July. Adam Winstanley says the effort began months before even pur- JONATHAN ARON chasing the property that previously housed a Marshall’s and Stop & Shop, with the deal finalized last August in a $7.6 million buy from the grocery chain/owner. “Now we are excited to see visible signs that the project is under- DONALD MACE way, and look forward to our vision becoming a reality this year,” Adam Winstanley says. When finished, the changed site will offer pedestrianfriendly circulation, meticulously manicured grounds and a patio for outdoor dining.

“Winstanley’s Chelmsford Town Center reprecontinued on page 91

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sents a significant private investment and will set the stage for future private and public investments in the center village,” predicts Chelmsford Community Development Director Evan Belansky, with an effort to revive the asset similar to that occurring at another Winstanley reclamation project, the Rhode Island Mall in Warwick.

Linear Retail Properties of Burlington took the rare step of trimming its portfolio in 2013 after a decade of acquiring more than five dozen “convenience-oriented” retail properties throughout New England.

Nordlund Associates principal Christopher Everest negoti- 1730 AND 1740 LAKEVIEW AVE., DRACUT MA ated the $3.1 million sale seemed right,” says Cannuscio, while on the flip ROBERT BORGMAN of Centre Street Village in side, he reports the firm’s prolific buying camDanvers, a multi-tenanted paign this past decade was impeded last year by asset set on 2.3 acres the same pricing metrics that led to the disposialong Route 1 South (110 tions. “The numbers are crazy, and when it is like Newbury St.) that Linear that, you need to make very sure a deal makes acquired 10 years ago this sense,” says Cannuscio, and more often than not spring, while the firm’s first last year, potential deals faded in the harsh light fund investment ($4.1 mil- of seller demands Linear could not accommodate.

Fortunately, conditions began to improve lion in Sept. 2003) fetched STEVE WOODWORTH $4.92 million in its sale to later in 2013, and Cannuscio says Linear has “a investor Christopher Alexandrou, that property couple of good deals brewing” that will require being1730 and 1740 Lakeview Ave. and 24 and a premium to buy but do have enough strong 25 Tennis Plaza Rd. in Dracut, a property that points to warrant such an action. “We’re finally KeyPoint Partners principal Jonathan Aron listed making strides, and that’s great,” he says of the firm founded by President William Beckeman exclusively for the sellers.

Linear principal Aubrey Cannuscio acknowl- with backing from Principal Financial. “It looks edges frothy pricing was one factor in opting to like we will be busier in 2014.” The company is harvest its legacy investments. “The environment giddy about one acquisition completed in 2013,

VINEBROOK PLAZA, BURLINGTON MA

making its initial foray into the retail-rich Framingham/Natick market with a $2.4 million purchase of 140-142 Worcester Rd. (Route 9) from long-time owner Anthony Gargiulo.

Brokered by industry veteran Thomas Godino Sr., Cannuscio told the Real Reporter in a December article that it had been a goal “since day one” of Linear’s existence to have a stake in the so-called Golden Triangle.

Supporting Linear’s optimism for a productive 2013 is CBRE/NE, with the upbeat assessment delivered in its just-released capital markets forecast. High Street retail and quality neighborhood assets will remain limited, the review indicates, but adds there could be some owners prompted to test the market by a climate that “in many if not most cases, is stronger than the ‘peak’ pricing seen in 2005 to 2007.” The report further relays interest in Class B and secondary markets could lead to a decreased discount compared to core opportunities, with CBRE/NE estimating the delta has already tightened from 300 basis points in 2012 to between 150 and 200 bps at year-end 2013 caused by strong financing terms for secondary markets, “investor willingness to take on slightly more risk in exchange for significantly higher yield.”

Besides Mace’s Shrewsbury transaction and the Linear assignment in Dracut, Burlingtonbased KeyPoint’s CRE sales contingent led by Aron also had a bountiful season, especially as 2013 progressed. Delivering eight deals from mid-year on in markets across New England, trades under their belt included a 121,600-sf grocery anchored shopping center in Providence, RI; a new Walgreens anchored plaza in Norfolk; 5,600-sf plaza in Salem occupied by Sleepy’s and Supercuts; and a 6,900-sf Advance Auto Parts net lease asset in Groton, CT.

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1285 BEACON ST., BROOKLINE MA

URBAN RETAIL continued from page 10

Registry of Deeds records, including one building Ireland-based Frazer Holdings flipped after just three months for a gain of $2.05 million.

Frazer Holdings reaped $90.1 million in total for the 51,000-sf portfolio, or about $1,765 per sf for 801 Boylston St. ($53.9 million), 333-335 Newbury St. ($16.75 million), 342 Newbury St. ($9.7 million) and 352 Newbury St. ($9.8 million). Frazer had paid a total of $49.3 million for the buildings beginning in Oct. 2010 and culminating with the purchase of 333-335 Newbury St. last September at a price of $14.7 million, mere months before flipping the property whose prior owner had paid only $4.7 million in Nov. 2010.

205 NEWBURY ST., BOSTON MA

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170 NEEDHAM ST., NEWTON MA (RENDERING)

“There is not a huge market (for so-called ‘High Street Retail’) in Boston and it’s a fairly defined area, so when you have a smaller market and a lot of demand in a strong city, pricing tends to be significant,” observes Michael d'Hemecourt, president of the retail division at Boston Realty Advisors. “High Street retail and infill markets are where the money is chasing these deals, so you still have an intense amount of capital” for listings. Enhancing the appeal of the retail is the influx of new luxury housing product being developed in the area, a trend that “generates a lot of excitement . . . which is why you’re seeing prices at this level,” d”Hemecourt concludes.

But the pricing increases were more than a case of good timing, according to the veteran retail CRE expert. “The owners certainly did a lot of upgrading on that portfolio throughout the buildings, but the biggest carrot was 801 Boylston St.,” d’Hemecourt outlines. With its lease set to expire in November 2014, Fidelity significantly expanded from approximately 8,900 sf to 14,000 sf, reportedly at a significant rental hike. d'Hemecourt would not discuss details, but market buzz says the new rate could be in excess of $140 per sf.

The ASB portfolio overshadowed 2013’s “other” late Newbury Street deal, which closed the day after Christmas. Boston Blue LLC used the proceeds from the 333-335 Newbury St. sale to Frazer in September to acquire the 4-6 Newbury St. Retail Unit for $27.8 million in a Tenants in Common 1031 Exchange. The retail condominium was purchased from Londonbased Tribeca Holdings London Ltd, which bought it in Dec. 2010 for just under $15.3 million. It was the second acquisition of 2013 for Boston Blue, who also landed 93-95 Newbury St. for $29.4 million in a deal with Edward F. Kakas II and George J. Kakas Jr in September, who quietly discharged the longtime home of

Kakas Furs after a lengthy 25-plus year hold.

It was a busy 2013 overall for trades on Newbury Street, despite the lack of supply. In the spring, Novaya Ventures and Urban Meritage purchased three Newbury Street properties for a combined $33.2 million: 79 Newbury St. for $10 million from YAS Real Estate LLC; 205 Newbury for $8.06 million (about $1,105 per sf) from Boyd/Smith; and the continued on page 93

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URBAN RETAIL continued from page 92

19,000-sf, eight-story, mixed-use 8 Newbury St. for $15.1 million. CBRE/NE negotiated the latter sale of a mixed-use property on the treasured first block of Newbury St. The CBRE/NE team featured retail sales aces Christopher Angelone and William Moylan, plus Nat Heald and Bruce Lusa along with retail leasing specialist Jeremy Grossman.

The acquisitions further cemented the partnership’s foothold on New England’s shopping Mecca. Urban Meritage is based on Newbury Street and handles leasing and other CRE duties for several local landlords, including Jamestown. VILLAGE STREET SHOPS, 71 NEEDHAM ST., NEWTON (RENDERING) Novaya principal Peter Carbone helped orchestrate the landmark purchase of a Newbury Street 429 Harvard St., a 3,000-sf structure occupied which the firm is constructing its prototype portfolio by Jamestown by a Citizens Bank branch. The investment is multi-tenanted retail plaza catering to upperwhile at Taurus Investments, part of the firm’s “Main Street Retail” program scale tenants. The namesake of developer the Hub-based firm that had that seeks high-quality product in tony commu- Leonard Bierbrier completed the purchase utiassembled the portfolio over nities such as Belmont, Wellesley or Boston’s lizing $11.3 million from Commerce Bank &

several years in partnership Beacon Hill. Cambridge Savings Bank financed Trust Co. with Urban Meritage princi- the Brookline deal that closed in early August pals Michael T. Jammen and with a mortgage of $1.5 million.

Mere blocks up Harvard Street is the Vincent Norton.

NAT HEALD Urban retail sales were Coolidge Corner district of Brookline that holds continued from page 40 hardly confined solely to its own as a desirable urban center, as shown in “was actively in the market for the exact kind of Newbury Street and the May purchase of 1285 Beacon St. to a part- space 267 Lowell Rd. offered,” Farrelly relays, Boston, however. BRA bro- nership between the Bulfinch Cos. and a Sudbury although there were certain modifications to kered the $33.1 million investor. The 49,000-sf structure was acquired meet the firm’s long-term needs. Once they exchange of 39 JFK St. in from Nicholas Heras Jr. for a healthy $13.9 mil- expressed interest, C&W brought Campanelli Harvard Square (topping lion after a marketing process led by Boston into the equation, a prescient choice given that $1,600 per sf) in the spring Urban Partners brokers Jonathan P. Dutch, Ann V. Braintree-based developer and Mercury had a to Chinese investor Dr. Ehrhart and Sam Hawkey that began last prior amicable landlord/tenant relationship.

BRUCE LUSA In addition to signing a 70,000-sf pact with Gerald Chan, a deal first autumn. The infill development features 49 relayed by the Real Reporter. The 20,575-sf underground parking spaces and a 25,600-sf Mercury, Vectron agreed to lease back another office and retail building is anchored by Kaplan retail building occupied by an upscale butcher 20,000 sf, putting the asset at 75 percent occushop, fitness center Bodyscapes and office supply pancy when acquired by Campanelli. Yet anothInternational and an American Express office.

Other Hub retail deals were not of the block- icon Staples. RBS Citizens loaned the buyers er piece of the puzzle involved buying Mercury’s existing 31,000 sf building at 26 Hampshire Dr. buster variety. Linear Retail picked up a North $10.4 million to secure 1285 Beacon St. Several BRA professionals are listing urban in Hudson, with the total consideration in the End property at 48-50 Salem St. for $2.07 million, a two-story building totaling 1,925-sf, cur- retail assets or land sites, or completed end of $6.1 million.

Campanelli used its in-house architectural rently occupied by Goody Glover’s Bar & Bistro exchanges of such in 2013, with the team of and a Bank of America ATM. Retail CRE at 465, Jeremy Freid, SIOR, and Adam T. Meixner and and construction services to build a new 467 and 469 Washington St. brought in $3.47 Jordan Sneider joined by d’Hemecourt in help- entrance and façade at 267 Lowell Rd., which million to Pinwash Realty TR principals Frederick ing the owner of the former Salett’s Meat has 28,000 sf available for lease through the D. Ballou and Peter B. Loring in a May closing of Market at 170 Needham St. in Newton harvest C&W team that is also listing 26 Hampshire Dr. the 7,175-sf structure that dates to 1899 and the 27,000-sf site on which the buyer intends to for lease or sale on behalf of the new owners. had last changed hands in July 1962. It was tear down the existing 14,000-sf structure in “Both buildings . . . offer outstanding access to bought by a New Jersey concern, Treeco/Liberty favor of a 7,200-sf retail building. Sanford both the Massachusetts and New Hampshire LLC, with $4.0 million in financing from East Builders founder Marc Kaplan paid $2.52 mil- labor markets,” says Farrelly. Campanelli princiBoston Savings Bank. Also, Millennium Real lion for the property, financed via a $1.3 million pal Steve Murphy noted the acquisition is his firm’s second foray into the Granite State, and Estate picked up a 1,600-sf retail property at Belmont Savings Bank loan.

Yet another deal of import for the Needham says “we are confident our value-add strategy 1430-1440 Commonwealth Ave. in Allston for Street corridor occurred last spring when will greatly benefit the current tenants leasing $2,77 million.

Across the border in Brookline, the Bierbrier Development finalized its $3.2 million these spaces, as well as prospective tenants for

Grossman Cos. paid $2.27 million to acquire purchase of two parcels at 71 Needham St. on the space that remains.”

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CVS PHARMACY, 1075 BROADWAY, SAUGUS MA

dates to 1985 and has Burlington Coat Factory, Fashion Bug, Hobby Lobby, OfficeMax and Sally Beauty & Supply on its tenant roster.

A yen for stability and hands-free CRE ownership are driving the net-lease machine, according to Horvath, adding any threat of an interest rate increase that could dampen enthusiasm has seemingly ramped up demand as buyers seek to beat the proverbial clock. “We are cranking,” Horvath says after two previous seasons of eclipsing previous annual bests.

Others on the team, which relocated in 2013 to 100 High St. in Boston, are Jeremy Black, a retail specialist focused on upstate New York and national transactions; multifamily brokers Dennis Kelleher and John Pentore and the group’s administrators, Charles Duggan and Leigh Shepard. Despite last year’s supercharged season, Horvath boldly predicts another record in 2014. “We have improved every year, and we are off to a very good start

development play . . . a very good one,” Horvath concurs of that 3,300-sf parcel at 181183 North Washington St. that went for $1.45 million, but he adds the cash flow spun off in being a few blocks from Boston Garden should buy time to conceive and permit another use for the property that sits on the edge of the Rose Fitzgerald Kennedy Greenway. North Washington Development LLC is comprised of three managers: Michael O’Neill LAURIE ANN DRINKWATER of Paradigm Biodevices, Simcha J. Weller MD and Robert Weintraub. Weller is a renowned neurosurgeon and Weintraub a CRE veteran active in the Hub. Horvath and Tremblay handled both sides of that pact.

SETH J. RICHARD Other assets in the late deals included a KFC in Iselin, NJ, that fetched $1.28 million and a Starbucks in Gas City, IN, that closed for less than $900,000. Its lease only runs for another three-plus years, well below what core investors would be desiring, but Tremblay says the asset’s long-range potential was solid enough to find a taker. “It is very good real estate,” he relays. Marcus & Millichap advised the buyer in both instances, and played a similar role on the third Midwestern exchange at year-end, a $14.1 million purchase of North Ridge Plaza in Joliet, IL, by North Windham Properties LLC. The 230,200-sf power center “is an institutional quality asset located along Joliet’s most heavily trafficked retail corridor,” Horvath outlines of the 29-acre complex that 181 NORTH WASHINGTON ST., BOSTON MA

already,” he says, with $300 million in tow even before the end of the opening frame.

Another Marcus & Millichap contingent scouring New England for net lease listings is Laurie Ann (L.A.) Drinkwater and Seth J. Richard, who have focused on Connecticut but operate in other states as well and completed a significant deal last winter in delivering $9.3 million to their client via the sale of a 14,000-sf CVS Pharmacy on Route 1 South in Saugus. The property that dates to 2008 is well-served by a traffic count of 115,000 vehicles passing by daily, notes Drinkwater. “This suburban Boston location has a very high barrier to entry, especially with rocky topography making municipal approvals costly and challenging,” she explains in noting the North Shore Medical Center has a facility right next door. “All of this contributed to making this an excellent investment for our client,” she says.

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on the New Hampshire side of Route One some 30 miles away (see New Hampshire section).

Calkain Cos. Director Michael R. O’Mara scrambled to complete a late-season assignment facilitating the $21.0 million sale of six CVS units across the United States and a pair of similar transactions for a total consideration of $44.8 million. The investment group buying the six-pack portfolio was under a strict timeframe with only seven days left in the ID period of a 1031 exchange, and O’Mara was able to analyze the client’s needs and “to point out the nuances of the net lease marketplace” that were suitable for the exchange, “including the competitive landscape and supply constraints for this APPLEBEE’S RESTAURANT, 56 PLAISTOW RD., HAVERHILL MA product,” prompting a decision to pursue the port- properties. jumped 15 basis points to 8.15 percent. folio. O’Mara works from Prower LLC purchased 792 Beacon St. in Boulder Group tracks the number of net the Boston office of Newton Center, a retail property comprised of lease properties on the market, and indicates Calkain, a CRE brokerage over 6,000 square feet on the main retail level, there was a 12.7 percent decline in retail assets, firm specializing in net as well as over 6,000 square feet of lower-level from 2,502 in Q3 2013 to 2,184 in Q4.

MICHAEL R. O’MARA lease transactions across a space, for $6.9 million. Century Properties of Industrial assets were down from 234 to 189, a variety of product types, including hotel, indus- West Virginia paid $5.25 million for 1445 Main drop of 19.2 percent, while there was a 6.0 pertrial, office and retail.

St. in Leicester, an 18,975-sf store built on 4.5- cent gain of office listings, from 232 to 246.

In a release, O’Mara details use of a “pay- acres that is home to the Tractor Supply Co. down-readvance” feature that enables the William Roberts of Wellesley, who is affiliated client to redeploy equity into other high-yield with The Flying Bridge Restaurant Corp., purassets.” The second transaction was a two-store chased a 13,850-sf Walgreens on the continued from page 42 In the accolades department, O’Brien portfolio secured by another 1031 exchange Malden/Revere line at 215 Beach St. for $5.82 received a major one after the season concludbuyer, while an 11-unit leasehold portfolio was million. ed in being named an NAI Global Elite recipient, bought off-market by high net worth capital.

Retail appears to be a darling these days an annual incentives program that honors those Each investment, according to O’Mara, was among net lease investors, with a new report by placing multimarket business with fellow NAI driven by their zero cash flow structure “which the Boulder Group showing a 17 percent members and for handling the highest volume provides sophisticated net lease investors a decline in capitalization rates for that product of business in the network, a pipeline that has vehicle for 1031 exchange transactions.” . type in the fourth quarter of 2013, from 7.02 more than 5,000 local market experts in 400 Reflecting the popularity of drug stores in percent in Q3 to 6.85 percent by year-end. It offices spread across 55 countries. the net lease arena, American Realty Capital marks the first time over the past decade that The awards were given at NAI’s 2014 annupurchased a pair of CVS Pharmacies from the cap rates for retail averaged under 7.0 percent al convention in Las Vegas in February, with Fortress Investment Group, one at 405 Lincoln in that ranking, Boulder Group reports. The President Jay Olshonsky explaining that beyond St., Hingham for $9.01 million, and a second at office sector saw an even greater dip, falling recognizing a winner’s “outstanding perform1080 Eastern Ave. in Malden, for $8.47 million. from 7.70 percent to 7.40 percent, also a 10ance within the organization” over the prior The buyer is a national investor of net-lease year low, whereas industrial net lease cap rates year, “it underscores the power of the NAI Global network in building business, and showNET LEASED CAP RATE TRENDS cases the deep local roots and professionalism of our brokers.”

The managing broker of NAI Norwood’s Portsmouth office, O’Brien has more than 25 years experience in both leasing and sales of commercial real estate, with expertise in 1031 Tax Deferred Exchanges and alternative real estate investments. O’Brien has processed in excess of $50 million worth of institutional grade investments nationally and throughout SOURCE: BOULDER GROUP New Hampshire during his career.

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CRE LAWYERS continued from page 14

President Carl Valeri has been a vocal advocate of refinancing the vast portfolio assembled over 60 years by founder Harold Brown, and that may have kept Michael busy on top of the remaining roster of New England real estate titans advised by her and the firm’s Back Bay office that also features founder and Managing Partner Richard D. Gass, colleagues for the past 10 years. Later in the year, Michael and Valeri coordinated the firm’s $3.2 million purchase of 29 apartments at 550 Belmont St. (Oakley Court) in Watertown.

Investment sales in the Greater Boston market ballooned from $4.5 billion in 2012 to $6.7 billion in 2013, according to a year-end report from Colliers International, with investors venturing from the safety of urban core to the Route 128 corridor and into the secondary markets ONE NORTH OF BOSTON, CHELSEA MA across all product types to secure properties and a measure of yield. “Multifamily is still king, but flex/industrial building in North Andover; a $30 there were office deals, especially in good mar- million construction loan to One North of Boston kets,” reports Sheryl C. Starr, partner at Bernkopf LLC (a joint venture of Gate Residential and Goodman LLP. “It was a little bit more difficult TransDel Corp.) from East Boston Savings Bank with office in (secondary) markets. But anything for 230 “value/luxury” apartments in Chelsea, MA; and a pair of Connecticut refinancings, $8,0 that was in a good market, was fine.”

Starr and BG were active with refinancing, million for a 310,775.sf office and retail properacquisitions and new construction throughout ty in Hartford, CT and a $9.75 million loan to New England involving a wide range of lenders, refinance and reposition a 43,500 sf office buildfrom the large banks and life companies to ing in Darien, CT. Even with 10-Year Treasuries creeping community banks, in what she describes as “an amazing year. Besides processing $100 million upward, the interest rates remained nearly irrealone with Prudential herself, Starr says the firm sistible for owners on an historical level in 2013 “did tens of millions of dollars with Freddie Mac and contributed to the hyperactive season. With loans on residential multifamily deals, and we the potential for a further increase in rates, did a lot of deals with smaller banks that were many realized the window of opportunity could willing to do construction lending and things be closing and took advantage, at times despite having to incur hefty prepayment penalties. that had a little bit more hair on them.”

Deals included a $6.8 million loan from Shem “Many refis were coming off 10-year deals, and Creek Capital for the purchase of a 168,735 sf with some it made sense to refi a little bit early

25 COMMERCE WAY, NORTH ANDOVER MA

and pay a premium because the rates were so good,” Starr explains. “All of the multifamily deals were for 10 to 20 years and were below 4.0 percent—(around) 3.7-3.8 (percent). There were great rates and everybody wanted to put them away for a long time.”

Robert M. Schlein, chair of Prince Lobel’s real estate practice group, says the improved economy resulted in a solid year for his firm as well. “We found that existing clients were able to do more and bigger transactions because commerce in general was going better,” explains Schlein. “Tenants needed more space, leasing activity was good and clients actually saw some opportunities to buy some assets.”

Schlein also found that existing and new clients were refinancing despite paying substantial prepayment penalty fees. “The (previous) rates were high enough, and the rates last year were low enough that it made sense to refinance.”

Prince Lobel found “substantial” work in the commercial real estate end of the emerging solar industry, including a number of ground mount solar projects as well as some “good sized” roofmounted endeavors. The medical marijuana industry and its impact on CRE also provided opportunities for the firm, says Schlein. “There are a lot of medical marijuana issues, both in terms of cultivating sites—which are large—and dispensaries, which have all sorts of permitting issues to them,” Schlein explains, “and also on the landlord side for those considering them as tenants.”

Bruce I. Miller, a partner in Pierce Atwood’s real estate practice, concurs that refinancing played a large role in his firm’s success in 2013, although he reports acquisitions were in the mix continued on page 97

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gages of $445,500 and $742,500. Also south of Boston, New England Certified Development Corp. (CDC New England) delivered $527,000 to the owners of the Rexhame General Store in Marshfield (mortgages of $509,600 and $637,000 from South Coastal Bank); and for an industrial building at 3 Thacher Ln. in Wareham where CDC New England provided a $630,000 mortgage and Rockland Trust Co. loaned $610,000 and $762,500.

CDC New England did 80 deals last year, just slightly behind its 2012 production that posted 83 deals. “When you compare it to 2012, the industry as well as us was down, because the refinance TURNER’S SEAFOOD, SALEM MA program went away,” CDC New England Chief Operating Officer Lyceum Hall in Salem, providing a $1.31 million Paul F. Flynn Jr. Flynn mortgage, with Salem Five providing an addirecounts. “We held our tional $1.09 million. In addition, CDC New own, but the industry as a England assisted a wide variety of businesses, whole was off.” Under the from manufacturing companies to restaurants, temporary program, small hotels, and service and professional entities, businesses were allowed to including an automobile dealership in refinance eligible assets in Connecticut that obtained a total of $6.2 million GEORGE “TONY” HEWETT its 504 program between in construction loans through the program for October 2011 and late September 2012, which which CDC New England provided a $2.55 million debenture. The owner of 310 Andover St. in created a spike in loan originations last year.

Among CDC New England’s many deals last Danvers was loaned $943,000 on that 23,925-sf year was one in Lowell at 59 Technology Dr. on warehouse earlier in 2013 in a refinancing of the behalf of specialty keyboard manufacturer asset acquired by J3 Realty LLC for $1.97 million Cortron. Flynn characterized the deal as “a good in June 2012.

Granite State Economic Development Corp. example of the 504 being used for a manufacturing environment. It was 90 percent financing, a Vice President Barbara Arena relays that the $2.45 million project, it was land and construc- second half for her CDC was not particularly tion, TD Bank was the mortgage lender and the busy, concurring the government imbroglio may bank of record and we provided a $1.8 million have played a role in the decrease in activity. debenture, and it created 11 jobs.” CDC New “We had the shutdown in October and that put England also helped Turner's Seafood open a a damper on our end, because we couldn’t get restaurant, financing capital improvements at any loans approved because the SBA is consid-

97 ered non-essential,” says Arena. “When that happened, I think there was a bit of trepidation on the part of business people in terms of ‘Should I buy property at this point? Are we going to drop off the face of the earth with the debt ceiling?’

That kept some holding back from making their decisions.”

But GSEDC remained active, providing KWL Inc. a $1.77 million mortgage for a 92,500-sf industrial building (sold

by Campanelli) at 15 Liberty Way in the Franklin Industrial Park, with $1.73 million and $2.16 million mortgages from Avidia Bank; a $1.19 million mortgage to the owners of the Golden Cannoli Shells Co. for a 24,550-sf industrial property in Chelsea where First Trade Union Bank committed mortgages of $1.15 million and $1.44 million; and a $599,000 mortgage to Historic Properties Development Company LLC borrowed to make capital improvements to Deluxe Depot Diner in Framingham, with East Cambridge Savings Bank providing an $890,000 mortgage.

Outside of Massachusetts, Tom Madden, attorney for Madden/Brockman and SBA 504 specialist, says that Rhode Island is recovering, albeit slowly, and that is reflected in recent 504 activity, despite the nation’s highest unemployment rate. “Volume in Rhode Island is down compared to neighboring states, but there are indications that it is on the way up,” says Madden, whose firm is the exclusive closing counsel in Rhode Island for CDC New England.

“Deals have been smaller overall, a lot of deals have been taking longer to close because often in the 504 structure the first commercial loan finances at least in part a construction project and I think that borrowers have been more cautious in seeing the construction projects done and have taken longer in completing them before the 504 takes out the second commercial loan.”

ects in the Seaport, units he says “are going like hotcakes.” There was also demand for construction financing from multifamily developers— and not always from the big guns. “(We saw) a lot more activity from builders and developers looking to refurbish two-, three- and four-families in Dorchester, Allston, Chelsea, and Mattapan,” he recounts. “We have one (owner) who has bought about 50 properties in the past year, fixing them up and holding them, which is another good sign. They’re holding them for future appreciation and for the high rental income.”

An increase in bridge loans brought more work for Pierce Atwood, Miller outlines, as investors eager to close deals were willing to pay a little extra in up front costs to react more quickly to opportunities. “I’ve also seen a jump in hard money lending, people who are looking for quick financing—much more quickly than a bank can accommodate because there have been some good deals and people don’t want to pass them up,” reports Miller. “So they’ll include it as the cost of doing business paying 12 percent for 3 to 4 months and then refinance it and pay off that lender.”

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as well, particularly in the form of 1031 exchanges. “We saw a lot 1031 exchanges last year and it’s continuing into 2014, which is a good sign because it bodes well for the market in that they’ll be buying other properties,” observes Miller, and typically the client needs to do so in a prescribed time frame.

Miller also reports that his firm processed a significant amount of multifamily deals in 2013, especially involving luxury condominium proj-

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LOAN WORKOUTS As a result, 2013 CMBS borrowers requested lease extensions, loan modifications, reserve money access and assumptive loan approvals from the master servicer, according to Goldfisher. The Henley Group saw more advisory requests in 2013 than in previous years and negotiated loan modifications, lease approvals and access to borrower's capital reserves.

Nationally, CMBS delinquencies declined 12 basis points in December to 5.98 percent from 6.10 percent in November, and late-pays are now 3.0 percentage points below their July 2011 peak of 9.0 percent, according to Fitch Ratings.

Multifamily saw the largest decline in delinquency rates (from 10.12 percent at the close of 2012 to 6.48 percent), followed by hotel (8.87 to 6.50), office (8.41 to 6.89), and retail (7.14 to 5.63) while industrial remained largely flat (8.61 to 8.45).

But 2013 may be the calm before the storm, as Goldfisher and other industry experts are anticipating a high volume of CMBS defaults in 2014 through 2017, because of the sheer number of loan maturities coming due—many of which are over-leveraged and will not be able to be re-financed.

According to Fitch/Morningstar, approximately $100 billion of CMBS loans are coming due in 2015, and that number increases to $110 billion in 2016, on tap to be the largest volume of maturities in CMBS history. Goldfisher says that 2014 will mark a beginning of the maturation of more difficult CMBS loans.

“What we’re seeing in 2014 are the CMBS loans that were originated prior to the market seizing up in 2008, and we’re already starting to see a lot of those loans that are going to be maturing at that point and the borrowers are saying ‘Look, I am way underwater on this deal, I won’t be able to repay this in a year, can we deal with this now?’ So we’re already taking on assignments dealing with some of that stuff.”

Given the delicate nature of the workout business, the Henley Group keeps specifics of its assignments vague and often only gets accolades from clients in hushed tones. At least one well-known client has been openly gleeful about the firm’s work in restructuring an overleveraged note on their 125,000-sf South Shore

enced team with great patience to get the lender to agree to a DPO,” and Henley Group was called upon to utilize its extensive industry contacts and understanding of the special servicer process. The result: Braintree Executive Park’s lender agreed to a $6.9 million payoff, or less than 50 percent of the loan amount. That freed up Grossman Cos. to institute a lease-up campaign, bringing occupancy above 90 percent and setting up the asset for a trade that occurred last spring when Albany Road Real Estate Partners paid $17.2 million to bring the story full circle. “We can’t thank them enough,” Louis Grossman said afterwards of the Henley Group, adding watching the process unfold proved an education unto itself.

The Henley Group has experience across a wide berth of real estate product types, having assisted owners of various retail formats, plus multifamily, industrial and limited service hotels. David Goldfisher founded the firm in 2000 with his wife, Tammy G. Goldfisher, who remains active in company leadership. The firm last summer brought in another seasoned veteran to brace for the anticipated increase in business going forward. New Managing Director Brian J. Morris has known David Goldfisher since beginning his career at Bear Stearns where Morris originated, underwrote and securitized CMBS loans.

Trained as an industrial engineer for the Naval Research Laboratory, he has held CRE positions with Fannie Mae, Swiss Bank, GE Real Estate, LEM Mezzanine and, most recently, at private equity fund Argosy Real Estate where he managed more than 80 commercial and multifamily assets valued in excess of $500 million.

Also on the leadership team is Kai Cheung Shanahan, a Boston College alum deemed by her employer to be “an invaluable asset” to company clients thanks to her “in-depth analytical, financial and organizational skills” and experience in CRE acquisitions, asset and portfolio management and underwriting knowledge. As with Morris, Cheung Shanahan has a lengthy CRE career leading up to joining the Henley Group, with prior positions at Benchmark Assisted Living, Berkshire Mortgage Finance, Copley Real Estate Advisors and portfolio manager for New England Mutual Life Co. debt and real estate portfolio of nearly $750 million.

Photo: Derek Szabo

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office building. The Grossman Cos. enjoyed years of success with Braintree Executive Park until the 2008 recession hit and two major tenants departed, dropping occupancy in the pair of four-story office buildings to 40 percent.

Saddled with a $14.3 million mortgage written

Approximately $110 billion of CMBS loans are coming due nationally through 2016.

SOURCE: FITCH/MORNINGSTAR in sunnier times, Grossman Cos. faced a difficult choice on what direction to head, with prospects dour for crafting a so-called discounted loan agreement because “it became clear that the cash flow would not support the debt service” and market conditions were also looking bleak, recounts President Louis Grossman, especially since its existing capital partner wanted no part of a recovery and requested they be bought out of the asset.

With lenders “slow to recognize and accept new market realities,” Louis Grossman says it became evident they would require “an experi-

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CT APARTMENT SALES continued from page 28

market was very active, and multifamily continues to be a preferred placement vehicle for yield,” relays Nolletti.

Witten and his partner represented Behringer Harvard in the $35.3 million sale ($210,000 per unit) of the Grand Reserve Orange multifamily community at 45-75 Prindle Hill Rd. in Orange to Fairfield Residential. The 168-unit complex, located off Interstate 95 at Exit 41, is comprised of 112 one-bedroom, 28 two-bedroom, and 28 three-bedroom apartments in six three-story buildings.

“We had a ton of activity on Grand Reserve Orange,” Nolletti says of the nineyear-old complex, adding, JEFFREY DUNNE “It is a very high-barrier-toentry market and it was an institutional seller and an institutional buyer.”

The IPA team also brokered the $45.1 million sale of Parallel 41 apartments, a 124-unit luxury asset at 1340 Washington Blvd. in Stamford. Built in 2012, Parallel 41 is within walking distance to the Stamford CBD as well as the Metro North train station. Nolletti describes the property as “an outstanding Class A asset” that Cornerstone Real Estate Advisers purchased from homegrown developer RMS Cos. for about $363,700 per unit.

But not all of IPA’s trades were high-end. In April, the team advised Intown West Associates on a listing where UOB Eagle Rock Multifamily Property Fund LP picked up Clemens Place in West Hartford, a 42-building complex on 17 acres with 597 units that traded for $29.5 million, or approximately $50,000 per unit.

Seventy percent of the units are market rate and the remaining are reserved for Section 8 hous-

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ing. “There is no finer example of an architecturally renovated, wellstabilized and respected apartment community than Clemens Place Apartments,” Witten proclaimed at the time of its sale.

Nolletti says the product his firm is handling ranges from “solid B workforce housing to absolute AAA lifestyle renter housing,” and he reports that institutional players are looking at better quality B INFINITY HARBOR POINT, STAMFORD CT assets for value add strategies. “The ‘B, B-plus’ comfortable trying to buy property in Greater asset class in core-plus to tertiary locations is Boston with cap rates from just north of 3 to 5.5 starting to get traction from that buyer pool percent, where there’s a lot of new developbecause they’re looking for yield in Fairfield ment going on,” Director of Acquisitions William County,” he says. “In Stamford, Norwalk, and Steinberg explains. CRP invested $3.4 million in up into Stratford, we’re see- the 45-unit Deer Park Apartments at 87 Ruby Rd. in Willington near the University of ing sub-5 cap rates.”

One blockbuster Connecticut. Developed in 1972, the complex Stamford deal did not consists of a two-story and three-story building involve IPA, but was instead on 22.5 acres. “We just liked the fact that we negotiated by CBRE’s duo could manage properties and get a little bit betof Jeffrey Dunne and ter return, so we decided on a strategy of buyChristopher Leonard as ing in the Connecticut River Valley,” says CHRISTOPHER LEONARD advisors to developer Steinberg. “It’s in close proximity to UConn, and Building & Land Technology in the $98.8 million there is employment in that area, and it’s not university students looking summertime disposition of Infinity Harbor Point for student housing.” to Clarion Partners. That equates to an astoundIPA knows a thing or ing $408,000 per unit for the newly constructtwo about cross-border ed 22-story apartment tower that commands deal-making, having been monthly rents exceeding $4,500 for the largest joined by Todd Tremblay of of its 242 units that range from 745 to 2,145 sf.

Marcus & Millichap’s “This is a best-in-class asset with superior unit Boston office in brokering finishes and property amenities,” says Clarion the $20.5 million purchase Managing Director Brian BRIAN WATKINS Watkins, citing a LWP of Royal Crest Estates in Fall River on behalf of arrangement close to apartment giant AIMCO. The buyer was employment centers, mass Highlands North Realty Trust, an entity mantransit and the city’s vibrant aged by JRK Property Holdings of Los Angeles.

Nolletti terms the South Coast “a model of downtown.

Connecticut multifamily urban growth” that has emerged as one of the activity is not solely the nation’s fastest growing multifamily markets.

“Royal Crest Estates has an outstanding domain of the institutional set, however, with Chestnut rental location and a stable, largely transit-oriRealty Partners of ented tenancy,” Nolletti relays of the 40-yearSpringfield bringing its old development that he says offers solid valueample private capital into add potential “through modest kitchen, bath the market in recent years. and hallway upgrades.” The complex at 37 “As we looked around at Courtney St. offers quick access to the Fall River

multifamily, we couldn’t get Expressway, I-195 and Route 24.

100

400 RESEARCH DR., WILMINGTON MA

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NAI/Hunneman Commercial Cos.’ Capital Markets Group whose book of business included seven industrial sales exceeding a half-million sf.

Chestnut Realty Partners had to overcome a slew of suitors vying for the second Wilmington asset, conveys Jacoby, with 400 Research Dr. 100 percent leased to a quartet of credit tenants, exactly the sort of cash-flowing CRE the Springfield-based investor is focused on, according to acquisitions chief William Steinberg. Also targeting multifamily and retail, Steinberg knows a thing or two about industrial after several years with AMB Property Corp., and he concurs 400 Research Dr. was a rare find regionally. The firm has set its sights on stabilized opportunities beyond CRP’s home turf, Steinberg told the Real Reporter in a year-ending assessment of the season, having also bought an Uxbridge shopping center (see retail section) after its initial foray east of Worcester in late 2012 to secure 8 Presidential Way in Woburn from Campanelli.

CRP’s management team includes principal Drew Davis and Accounting Manager Melissa Soto.

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25 COMMERCE WAY, NORTH ANDOVER MA

The North Andover building offers near-term house space, Transwestern|RBJ conveys in its winstability with two tenants occupying space until ter 2014 indSTATus report. All three enjoyed posat least 2017, and Jacoby reports the asset’s itive net absorption in 2013, Transwestern|RBJ design, location and upkeep were all drawing reveals, and the 4.1 million sf compiled in total is cards to investors, having been conthe most regionally since 2000. “These structed in 2000 and overhauled in are market conditions that have not existed for over a decade,” indSTATus 2006 by an experienced real estate author Brendan J. Carroll stressed in group. The seller was One Clark Street releasing the latest update that shows North Andover LLC, an entity managed 6.1 million sf absorbed over the past 11

by Philip C. Haughey that acquired the quarters, and just one quarter of nega16.2-acre parcel in July 1998 for tive demand. That came in the manu$2.95 million, supposedly with financial backing from Mugar Enterprises. JAMES STUBBLEBINE facturing realm during Q4 2013 when it was in the red by a mere 41,000 sf Shem Creek Capital financed the latfor 16.4 million sf of inventory. “That’s est deal with $6.8 million. pretty remarkable,” Transwestern|RBJ’s Class A industrial is so scant, disresearch director says of the consistent cussions are arising about speculative results, with the drop only hiking vacanconstruction, but the cascade of valuecy to 12.5 percent. The rebound has add or user options that did change enabled asking rents to rise from the hands was seen as signaling the secprevious quarter, up $6.40 per sf to tor’s healthy condition after suffering mightily in the 2008 recession. MICAH STUBBLEBINE $6.55 per sf. That dynamic is present for Increased consumer spending has helped bring flex ($8.29 from $8.21) and warehouse ($5.45 vacancy rates down for industrial CRE—a seg- from $5.37) thanks to similar performances in ment closely tied to the economy—over the past which warehouse vacancy has plummeted from 12 months for flex, manufacturing and warecontinued on page 101

MANAGEMENT TEAM AT CHESTNUT REALTY PARTNERS (L-R) MELISSA SOTO, DREW DAVIS AND WILLIAM STEINBERG

176 SOUTH WASHINGTON ST., NORTON MA

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19.8 percent to 14.2 percent since mid-year 2012 following 3.4 million sf of positive absorption in its 57.4 million sf of supply. The far smaller flex market is up 843,000 sf over the past eight quarters, including 182,000 sf on the plus side to close out 2013 on a strong note that dropped vacancy for 27.4 million sf from 17.6 percent in Q3 to 16.9 percent at year-end.

One team that brokered multiple industrial 15 LIBERTY WAY, FRANKLIN MA transactions in their south ELLEN GARTHOFF suburban territory is NAI/Hunneman principal Catherine Minnerly and colleague Ovar Osvold, including the $2.3 million sale in late January of 30 Mozzone Blvd., a 95,000sf flex building along Route 140 in East Taunton.

DOUGLAS JACOBY Bought by B&D construction, the exchange of that building was followed the next month with the $1.92 million sale of a 100,000- 244 VANDERBILT AVE., NORWOOD MA sf warehouse on 32 acres at 63 Bedford St. in Lakeville to Warren Trask Co. EVacuum Store MITCHELL LEVEY acquired 16,000 sf at 86 Morse St. in Norwood, trading from 661 Pleasant Street LLC to 86 Morse St LLC, while Minnerly and Osvold also orchestrated the $5.9 million disposition of 200 Summer St. in 2 JEWEL DR., WILMINGTON MA Holliston to Birch Real MICHAEL MCLAUGHLIN Estate Holdings in midInc., a longtime tenant of the 135,000-sf strucAugust. That building is an ture that dates to 1960. “That was a nice one,” 80,150-sf mix of manufac- concurs Minnerly, describing 2013 overall as “a turing and warehouse decent year,” an understatement even more space constructed in 1982 pronounced given the industry veteran’s ability on a 16.5-acre parcel bor- to tread both sides of the sector and juggle muldering Medway. Minnerly tiple product types, with Osvold and her having and Osvold advised seller also leased 20,500 sf to ESP Solutions at 580 Holliston Equities LLC, an Myles Standish Blvd. in Taunton. They also SCOTT DRAGOS affiliate of New York-based brought the speculative 101 Industrial Park Rd. Time Equities Inc. who had paid $4.41 million in that same community to 90 percent occupanfor the property in Sept. 2003. cy after a recent lease to Brown & Caldwell.

The season concluded on a high note for Jacoby, Dragos, McLaughlin and Lyndsey Minnerly and Osvold when 401 Elm St. in Ferreira departed in early 2014 for Colliers Marlborough sold for $10.0 million to MHQ International, but during their time at

NAI/Hunneman that began in 2011, the contingent that at various times also included Mitchell Levey and Sean Ryan completed a vast array of CRE sales inside Boston and well beyond (see Middle Markets story, page six). As has been their pattern, industrial was in the mix last year, with the team having advised the RAM Cos. in the Wilmington sale of a building considered among the best in the region. An even more intriguing transaction occurred just north of there later in the year when the NAI/Hunneman crew harvested 25 Commerce Way in North Andover to a private investment group, Pinnacle Properties. As previously detailed in the Real Reporter, the continued on page 102

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165,000-sf property is a state-of-the-art facility constructed in 1999, but shifting priorities led the owner to deem it expendable, a fortuitous decision for the brokerage team given its superior constitution, according to Jacoby, relaying there was “huge” interest in the asset that has two tenants whose lease terms run through 2017. Shem Creek Capital financed the buyer with $6.8 million.

Other NAI/Hunneman industrial-related sales in 2013 included 474 Myles Standish Blvd. in Taunton, CHRISTOPHER EVEREST acquired by IBEW Local 23 for $2.25 million from 475 MSB LLC and manager Greg Jaros, owners since paying $2.1 million in July 2003. Local 23 was backed by a $1.6 million commercial loan from Taunton Federal Credit Union. Grander Capital Partners was the winning bidder for 69 Campanelli Dr. in Braintree, a 36,325-sf warehouse bought from Prologis the last week of December for $2.16 million; and NAI/Hunneman oversaw the $3.8 million swap of 244 Vanderbilt Ave. in Norwood in August between their client, 244 Vanderbilt

STATS ‘13

100 SIMPLEX DR., WESTMINSTER MA

Ave. LLC, and Vanderbilt Norwood LLC, managed by Stephen F. Vazza, who was financed with $2.85 million from Lowell Five Cent Savings Bank. That same institution loaned Grander $1.62 million on the Braintree building, which was built in 1968 on a 1.8-acre parcel.

As for Colliers sales activity in 2013, Robert E. Cronin was also straddling a variety of CRE categories, with a significant industrial contribu-

INDUSTRIAL TOP GUNS 2013 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

BUYER Clarion Partners BioMed Realty Trust Square Mile Capital Senior Housing Props Tr Liberty Property Trust Rubenstein Partners LP American Realty Capital US Realty Advisors Cresset Partners Tritower Financial Group The Davis Cos Chestnut Realty Partners Hines Calare Properties Inc Paradigm Properties CVMC REIT Novaya Ventures Jumbo Capital Management LLC Jetro Holdings LLC Grander Capital Partners Colony Realty Partners National Development Daimler AG STAG Industrial Berkeley Investments

CAPITAL GROUP Institutional Public Equity Fund Public Public Equity Fund Private Institutional Private Institutional Private Private Institutional Private Private Private Private Institutional User/Other Private Institutional Private User/Other Public Private

ACQ. AMT. (IN $M) 60.5 52.0 49.9 49.5 39.4 37.5 36.7 32.3 32.3 32.3 25.3 23.6 19.5 19.4 12.3 12.0 11.2 10.8 10.5 10.2 9.8 9.5 9.2 9.1 9.0

# PROPERTIES 1 1 4 1 5 2 1 1 1 1 2 2 1 3 1 1 2 1 1 2 1 2 1 1 1

tion involving the December sale from Principal Real Estate Investors of 3 Nemco Way in Ayer to Catania-Spagna Corp., a manufacturer of specialty oil for salad dressing whose company is located right next door at 2 Nemco Way. Colliers had been retained to locate expansion space that could replace a facility in Marlborough the client had outgrown. More than a dozen prospects were considered but the exacting requirement that included a need for certain rail service (Pan Am) and other unique aspects proved unachievable via existing stock, with a costly and time-consuming build-to-suit the only seeming alternative. Fortunately, 3 Nemco Way became suddenly available when a tenant opted to leave and proved a “perfect” solution right next door, Cronin recounts. CBRE/NE principal Robert E. Gibson Jr. advised the seller on the $4.6 million transaction.

Creativity and happenstance also came into play for 8 Connector Rd. in Andover, a 40,000sf industrial building acquired in October by construction trades company Thomas G. Gallagher, a firm also cramped into its current quarters that was looking to own a larger structure. Another similarity is the broker involved, with Lincoln Property Co. broker Rob Cronin— Colliers’ Robert E. Cronin’s son—hired by Thomas G. Gallagher for a search that moved to 8 Connector Rd. when LPC colleague Greg Cahill advised him the owner there was looking to downsize, opening the opportunity for TGG to step up and buy that building, which it did with $3.0 million in financing from Enterprise Bank & Trust Co. Cahill advised the seller and Cronin the buyer in that mid-October outcome. continued on page 103

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Another substantial deal occurred in early 2013 when Paradigm Industrial Partners 1 bought 176 South Washington St. in Norton, a 209,000-sf warehouse that traded on an allcash basis for $12.4 million. A $7.50 million mortgage was later obtained from American United Life Insurance Co. Paradigm Capital Advisors President and CEO Kevin McCall terms the property “a very high quality building and a logical target for Paradigm Industrial Partners” and PIP1, a focused separate account program backed by Assurant Inc. The Stubblebine OVAR OSVOLD Co/CORFAC International was exclusive listing agent in the sale of 2 Jewel Dr. in Wilmington on behalf of Janis Research Co., which has relocated to 225 Wildwood Ave. in Woburn after acquiring that building in Dec. 2012. The Wilmington asset was acquired for $2.0 million by The Hat Trick Group, an affiliate of Markham Metals, who was advised by Christopher Everest of Nordlund Associates in a deal backed by SBA 504 financing provided by Bay Colony Development Corp. ($825,000) and Bank of America ($1.8 million). James and

110 GRAHAM DR., NORTH SMITHFIELD RI

BOSTON INDUSTRIAL STATS $1,000,000,000 $900,000,000 $800,000,000 $700,000,000 $600,000,000 $500,000,000 $400,000,000 $300,000,000 $200,000,000 $100,000,000 $H1'12 v H1'13

H2'12 v H2'13

Avg $/Sqft $120.00 $100.00 $80.00

$40.00 $20.00 $12H1

12H2

13H1

13H2

I N DIndustrial USTRIAL

QTR % Change # of Props Total Units Change VolumeVolume YOY %YOY # of Props Total Units 12H1 $422,985,547 34 34

$ 12H2 $ 13H1 $ $ 13H2

422,985,547 $927,727,545 927,727,545 $491,045,775 491,045,775 436,093,494 $436,093,494

-

16% 16% -53%

34 67 67 43 43 50 50

* Price per Unit/SqFt calculations are rolling quaterly averages

6,218,513 67 12,764,900 43 6,893,977 6,734,363 50

Avg $/SqFt Avg $/Sqft $77.11 $ 77.11 $83.72 $ 83.72 $$102.40 102.40 $ $89.50 89.50

© 2014 Data courtesy of real capital analytics

$60.00

Micah Stubblebine, who aided Janis in the America loaned Spire 65 Bay Street LLC with Wilmington trade, have now been hired to lease $6.88 million to facilitate the $7.10 million pur20,875 sf Janis has available at its new facility, chase of 65 Bay St., a manufacturing plant in a 68,000-sf building close to Route 128.

Dorchester.

A pair of real estate firms active in southOn the brokerage front, Transwestern|RBJ eastern Massachusetts completed the $1.5 mil- had a quartet of industrial deals close in 2013, lion sale of 3 Thacher Ln. in Wareham between beginning across the border in Rhode Island Thacher Road Realty TR LLC and seller Richard handling a $4.8 million sale that January of 110 J. Ouimet 2005 TR, managed by Jeffrey Richard Graham Dr. in North Smithfield, with Taurus Ouimet. Michael Giancola, founder of SouthEast Investment Holdings spending under $35 per sf Commercial Real Estate, advised Ouimet in the to take on the 138,000-sf building from PT trade of a 32,125-sf building constructed in Property Holdings. Two established local 1981 on a 6.3-acre parcel. Noble Vincent of investors were clients of Transwestern|RBJ in Coastal Commercial Real Estate in New Bedford Franklin Industrial Park sales at various times represented the buyers, an entity managed by last year, first in May when Campanelli divested Robert Bates and Sharon Bates.

15 Liberty Way at a price tag of $4.32 million, The 30 Mozzone Rd. buyer went to cresting $45 per sf when user KWL Inc. bought Mechanics Cooperative Bank for a $1.72 million the 94,425-sf building, followed in the unrelatmortgage secured by the 100,000-sf warehouse ed August trade of 176 Grove St. and 136 that Minnerly and Osvold were exclusive agents Constitution Blvd. by TA Associates to Novaya on for longtime owner W.H. Maze Co. of Illinois. Ventures. That package contains 229,875 sf of Other lenders providing money to acquire or modern industrial product. refinance industrial in 2013 included Jackson Skeffington could not discuss specifics, includNational Life Insurance Co. providing $14 mil- ing the 121 Hale St. asset Calare bought from lion on 157 and 165 Grove St., Franklin, to LNR Partners (see story, page 26).

Guggenheim Capital of Chicago. Northern Bank Transwestern|RBJ also sold 64 Grove St. in & Trust Co. loaned $11.85 million to Equity Watertown for $10.3 million last July to Tufts Industrial Partners for its 100 Simplex Dr. com- Associated Health Plan for Boston Biomedical. plex in Westminster; and Liberty Bank backed the $13.0 million purchase of a cold storage warehouse at 55 Murphy Dr. in Avon with $9.75 million. A $5.5 million Chicopee Savings Bank funded the 400 Research Dr. acquisition by Chestnut Realty from Deutsche A&W; Bank of 8 CONNECTOR RD., ANDOVER MA

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Capital for $27.4 million in April after paying $22.2 million in Nov. 2007 to secure the massive 480,000-sf property. The 1-3 Distribution Center Cir. asset sits on 69 acres in a thriving community for both office and industrial CRE. Redwood Commercial Mortgage backed SMC with a $57.0 million note. SMC paid $57 per sf for its share of MICHAEL FRISOLI the facility. It was one of two industrial properties the New York-based group bought into with Condyne last year, also paying $16.9 million—$51.43 per sf—on the Crossroads Commerce Center portfolio in Taunton. The park J.R. MCDONALD encompassing 330,000 sf was constructed in 2008.

Pricing per square foot helps define different opportunities in the highprofile industrial deals of 2013, with 175-190 Kenneth Welch Dr. at a persf price of $67 versus a RICHARD RUGGIERO voluminous $154 rate for 300 Riverpark Dr. Another stable industrial building that changed hands was 360 Cedar Hill St. in Marlborough, bought in June for $9.75 million by Colony Realty Partners from Deutsche Asset & TORIN TAYLOR Wealth Management, with the 119,825-sf asset trading above $81 per sf in a deal negotiated by Cushman & Wakefield.

15 INDEPENDENCE DR., DEVENS MA

175-190 KENNETH WELCH DR., LAKEVILLE MA

Out at Devens, Calare was joined by part- ings have something in common given ners Hackman Capital and Oak Tree Capital as DivcoWest was the seller in both instances, they reaped $20.7 million ($55 per sf) when joined by Taurus Investment Holdings on 300 O’Reilly Auto Parts purchased 15 Riverpark Dr., an exclusive listing of Independence Dr. for its New England CBRE/NE. The Capital Markets team distribution center. The complicated was led by principals Christopher agreement included buyout of a Kraft Angelone and William Moylan, with Foods Group lease for all 375,000 sf. backing from Nicholas Herz and Bruce Hackman/Calare was self-represented Lusa. Principals Jason Levendusky, while JLL’s Industrial Practice Group David L. Pergola and Mark Reardon advised O’Reilly Auto on a team participated by providing real-time including Tony Coskren, Brian Pinch JASON LEVENDUSKY leasing information, and Carlos and Rick Schuhwerk, head of the Febres-Mazzei and Kyle Juszczyszyn Boston-based unit. Cushman & counseled prospects on financing Wakefield brokers Michael Frisoli, J.R. options for a deal backed by a $22.7 McDonald, Richard Ruggiero and million loan from East Boston Savings Torin Taylor negotiated the Kraft Bank.

Foods portion on a transaction that The Cedar Hill building that dates beat stiff competition to win 2013 to 1999 is fully leased to Fresenius Industrial Deal of the Year at last Medical Care, Gentle Giant Moving month’s CBA 2013 Achievement JUDITH RAVECH Co. and Piedmont Plastics, with an Awards in Boston. average lease term remaining of 7.2 years The Riverpark Drive and Marlborough build- between the three in a facility that has clear heights to 30 feet and 23 tailboard loading docks plus a drive-in door. Robert E. Griffin Jr., Edward C. Maher Jr. and Matthew E. Pullen led the sales effort there on a building that last sold for $7.15 million in July 2000. Guidance on the MetroWest leasing market came from J.R. McDonald while Jay Wagner of the Equity, Debt & Structured Finance Group offered assistance to prospects, as did Judith Ravech, director of financial analysis.

“We are thrilled to have handled the sale,” Pullen said of an asset he declares “one of our region’s finest warehouse buildings” and “an continued on page 105

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2013 INDUSTRIAL continued from page 104

excellent complement to the buyer’s growing portfolio.” A Gotham-based private investment group, Square Mile does appear to have a voracious appetite for the product type, in 2013 going on a joint venture with Hackman to acquire a 2.8-million-sf portfolio of 16 Cleveland industrial buildings Greater Boston industrial at barely 100 million sf is a pittance compared to major ports such as Los Angeles, Miami and Norfolk, VA. Some claim TONY COSKREN that may enhance the asset’s limited ilk, however, especially as institutional funds diversify on geography while still needing “best-in-class” offerings such as that acquired by TFG. That firm’s inaugural purchase was among the BRIAN PINCH priciest industrial transactions in New England last year, with observers crediting the 23-year-old structure’s quality and upkeep but also the limited single-tenant netleased properties meeting institutional mettle, a common theme in 2013 and one ratcheting up in 2014 so much it is seen by some as being on a course for speculative construction or buildto-suit options. One industry veteran maintains

TITLE TOWN CRE PACE continued from page 18

over year for its title business. According to Sally French Tyler, divisional president of Centralized Businesses at First American Title Insurance Co., the firm’s commercial performance “was very strong. While gateway markets and core properties were still favored by many investors, there were rebounds in all asset classes and in all geographies, including secondary and tertiary markets.”

Stewart and First American are among several top title insurance firms operating in metropolitan Boston and were involved in multiple transactions of note last year, including Bourdeau’s company, which participated in the purchase of 99 Summer St. in late August for $110.8 million, then provided title services when new owner Cornerstone Real Estate Advisers secured a $55.4 million Bank of America mortgage in January.

360 CEDAR HILL ST., MARLBOROUGH MA

rent levels support new warehouse construction, arguing that $7 per sf averages are on the horizon.

C&W puts the year-end mark at $6.32 per sf, up from $5.95 per sf in Q4 2012, a 6.2 percent gain. Leasing activity totaled 6.1 million sf, remarkably a 19.5 percent decline over the 7.31 million sf absorbed in 2012, according to C&W.

OVERALL RENTAL VS. VACANCY RATES

SOURCE: CUSHMAN & WAKEFIELD RESEARCH

First American Title aided in one of the largest CRE sales in New England this decade when Shorenstein Properties bought Boston’s Center Plaza for $307 million in the waning moments of 2013. First American had earlier worked on the $110.0 million acquisition of 40 Broad St. in Boston by TIAA-CREF. Another First American acquisition assignment involved Jamestown’s $192 million buy of Riverview at 245 First St. in Cambridge, and on the suburban front, the title insurer participated in the purchase of 10-20 Mall Rd. in Burlington to RJ Kelly Co., another late season conclusion.

Lawyers Title/Commonwealth Land Title was busy in 2013 as well, advising on a series of blockbuster exchanges in the Financial District and Seaport, with the firm tabbed to provide services in the partnership acquisition of 343,000 sf of CRE in Fort Point Channel last summer by DivcoWest and Synergy Investments, a deal priced at $53 million. The insurer based at 265 Franklin St. was in on the

INDUSTRIAL

50 Congress St. office building bought by KBS Real Estate for $51 million in July, and later in the year was title insurer when Fidelity Investments harvested its downtown headquarters and other properties in a one-block radius for $87.2 million to Related|Beal.

A competitor based at 133 Federal St., Fidelity National Title, was both in and out of the Hub in 2013 and juggled various property types, including office assets such as One Winthrop Sq. in Boston bought by DivcoWest for $36 million in December; the August infusion of $77.1 million at 25 Burlington Mall Rd. in Burlington by TA Associates; and One Newton Pl. in Newton Corner that Taurus Investments scooped up for $34 million last June. Fidelity National was also called on for title insurance on the trade of Alta Woods at Brigham Square in Arlington, a 116-unit apartment community acquired for $50.5 million by Intercontinental Real Estate Corp. on the final day of 2013.

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principal James Boudrot SIOR, and Vice President Evan Gallagher negotiating for Welch’s.

On the sales side of its ledger, Calare pruned 60 Maple St. in Mansfield through a $7.05 million trade of the 225,000sf warehouse to the Grossman Cos. after being approached by its South Shore counterpart. The back end of a 1031 tax exchange process for the buyer, Grossman Cos. was JOHN B. REED attracted to perceived upside for a structure 70 percent leased when acquired in June, according to Jacob M. Grossman.

“That Mansfield/Franklin industrial corridor has really tightened up, and we are excited to have space PATRICK MULREADY available in the coming year,” Grossman told the Real Reporter in a recent interview. “We feel very good about this longrange investment.”

Another Calare sale involved two buildings in Framingham acquired by JAKE PARSONS the Christa McAuliffe Regional Charter Public School, a 45,325-sf package Calare had bought in May 2011 at a price of $4.15 million from the Nordblom Co. and was repositioning when approached by the ultimate buyer as part of their quest to find a

121 HALE ST., LOWELL MA

60 MAPLE ST., MANSFIELD MA

permanent home in the late educator/astronaut’s home town. New Dover Associates President Scott R. Hughes instigated that wellpublicized transfer of three buildings at 135139 Newbury St. that Poitras describes as adaptable to a variety of uses, including industrial and office and now for academic purposes.

A portion leased to a third party will remain as is until the term runs out, providing cash flow and enabling a gradual phase-in of the school, outlined Hughes, who had been approached by officials when their search for a facility stalled.

Victor Galvani and Jake Parsons of Parsons Commercial Group had negotiated for Calare.

Nearly all the purchases made by Calare in 2013 were value-add prospects, but the group did complete one requiring little TLC in the $4.0 million buy last September of 121 Hale St. in

Lowell, a 60,700-sf flex/industrial building fully leased to M/A-COM Technology Solutions. “The building features modern construction as a result of significant renovations completed over the past few years,” Transwestern|RBJ Senior VP Chris Skeffington had detailed in a press release after negotiating the sale on behalf of Hudson Advisors LLC, a/k/a the Lone Star Funds, which had taken 121 Hale St. back from its overleveraged JOHN BOYLE owner one year earlier.

Poitras concurs that the asset is not a hands-on prospect, explaining its investor in that instance had a more stabilized platform, one the company is prepared to accommodate as well, he notes.

MICHAEL O’LEARY Poitras says he believes Calare has a deep enough market knowledge and understanding of the vagaries of its specialty to make a difference, noting the industrial umbrella ranges from big box distribution to flex/R&D and classic manufacturing, which has its own multiple categories. “You really need to understand the (property) and what can be done to make it better,” says Poitras, with one of Calare’s most attention-getting case studies starting in 2012 when it paid $8.3 million for a state-of-the-art industrial building at 112 Barnum Rd. in Devens that now-defunct continued on page 107

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Evergreen Solar had constructed for its own use at the eye-popping price of $196 million. Calare immediately set about plying the streets for tenants and quickly delivered a firm possessing about one million percent more staying power than Evergreen, the venerable manufacturer Saint-Gobain, which leased 200,000 sf. What was a crisis for the state and Devens when Evergreen cratered turned into an opportunity for Calare and co-owner Hackman Capital Partners, who now have the complex JAMES BOUDROT fully occupied.

Capping off its 2013 acquisition campaign, Calare in December took 425 MEADOW ST., CHICOPEE MA on 380 South Worcester St., home since the 1960s docks and clearance heights to 34 feet with to food purveyor Sysco what Calare terms “ample outdoor parking and Systems but made expend- storage” area on the site that offers close able when that firm relo- access to I-495 and Route 24.

EVAN GALLAGHER cated operations to a new Even in scooping up 1.5 million sf of indusTaunton facility. The 92-acre complex was trial last year, Poitras says the goal was to bought with one tiny occupant on premises—a acquire more than that, but certain prospects 5,000-sf user that Calare quickly provided com- were either taken by others or deemed inconpany for in leasing all 180,000 sf of the 49- gruous to the game plan. Already in the early year-old building’s frozen storage to Preferred going of 2014, the group has four deals tied up Freezer. “We’re really excited by that, and so far, accounting for 700,000 sf, targets Poitras we’ve had a great response,” Poitras says of declined to identify.

Having been a fixture in the region’s indusfinding takers for the remaining space that was designed for a food-centric occupant. There is trial arena for two decades, Calare’s awardlots to offer for a facility sporting 81 loading winning, cash-yielding resume today is attract-

INTEREST UP MULTIFAMILY continued from page 85

used its formula of generating competition among lenders to deliver better financing.

Negotiations are often as much about crafting terms of a loan versus being hung up on the base rate, explains Natalizio, with non-recourse or partial recourse the sort of conditions a client might desire. While that can be a difficult sell, especially to a commercial bank, Natalizio insists the right sponsor and a coveted project can swing the pendulum. “We assist a lot of Aplus borrowers that (lenders) want to do business with,” he says. “That’s a real strength.”

Speaking of non-recourse, one issue being closely watched by borrowers and brokers alike is the notion of CMBS capital returning to New England after a five-year exile. “They are back big time,” Kelly says in detailing a recent confer-

ing a steady, wide stream of capital eager to make deals, and Poitras says the firm’s “proven track record” has combined with an understanding among investors that industrial is “among the least capital intensive” CRE types and a landscape rife with diamonds-in-therough provided one knows where to dig—or what to do once a potential gem is found.

“People have seen our body of work that shows we can improve value and produce results for the whole subset of (industrial), and I think they do understand its positive aspects now more than ever before,” offers Poitras.

“And those two put together is definitely working out great for us.”

als tracking that arena. “Fickle bond ence where he counted more than investors” have been another three dozen substantial CMBS players headache, according to debt expert either already in New England or vying Carlos Febres-Mazzei of CBRE/NE to overcome the gauntlet of banks and who says spreads increased by more life companies that have made it a difthan 100 basis points over the sumficult road to tread for such capital. mer but have since stabilized and “They have gotten a lot more aggreseven compressed. Being unable to sive over the past 12 to 18 months,” says Kelly of the CMBS circuit, adding, MICHAEL EDELMAN lock interest rates prior to a loan closing, there remains some lending risk, “they are much more competitive he notes, but Febres-Mazzei relays now than they have been in a long that CMBS money has been winning time.”

Natalizio says CRC “is aware” of business on certain large deals, secthe inroads being made from the ondary market transactions and high mortgage backed securities, but no LTV thresholds. “Furthermore, as the client has tapped into that source pricing between GSA lenders and during 2013 or heretofore in 2014.

CMBS lenders compresses, the latter The commercial banking coalition CARLOS FEBRES-MAZZEI will continue to grow its market share remains a major challenge for the CMBS crowd in the multi-housing space,” Febres-Mazzei in New England, according to CRE profession- predicts.

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The robust activity is in sharp contrast to the days of America’s economic meltdown, which saw a total of 18 Connecticut buildings change hands between 2009 and 2011, according to research by Patrick R. Mulready, a principal at CBRE New England’s Hartford office. The resurgence began last year, he recounts, with 21 buildings (2.87 million sf) trading for an aggregate $272 million. “Investor interest is still largely private capital, but it’s a lot of core market-located private capital that can’t find deals in their own markets that DAVID GAVIN make any sense,” Mulready tells the Real Reporter.

That was apparently the case with Blue Back Square, which languished until mid-2013 when Greenwich-based Starwood Capital and its retail affiliate, Starwood ANNA KOCSONDY Retail Partners, acquired the 97 percent-leased asset from Ronus Properties. “The project had been marketed unsuccessfully a year prior,” recalls Mulready, “and (CBRE) came to market with it late 2012, early 2013 and we found that the market had matured and there was demand for large mixed-use projects in secondary markets that previously didn’t exist. Blue Back Square saw a lot of demand from outside the market.”

CONNECTICUT RIVER PLAZA, HARTFORD CT

40 RICHARDS AVE., NORWALK CT

Blue Back Square is comprised of office, retail and residential components and was developed in 2007 by Farmington real estate developer Robert Wienner. The retail is anchored by major tenants including Barnes & Noble, Crate & Barrel, REI and The Cheesecake Family restaurant. The Lofts at Blue Back Square features 48 contemporary rental apartments. A Whole Foods Supermarket on site is not included in the trade.

Blue Back Square office space is 100 percent occupied and reportedly commands rents in the mid-$30’s in contrast to $21-24 per sf rents for Class A office in the city of Hartford and the CBD, according to CBRE reports.

Mulready and colleague John McCormick represented the seller of Blue Back Square and procured the buyer joined by Chris Angelone, William Moylan, Nat Heald and Bruce Lusa of CBRE/NE’s Boston office, and in conjunction with Jeff Dunne and David Gavin of CBRE’s New York Institutional Group.

The demand for office product was also evident, as the Inland Real

Estate Group acquired the fully occupied 383 Middle St. in Bristol (also known as the ESPN North building) for $41.7 million from Winstanley Enterprises, which purchased the 417,000-sf property for a little under $7 million in 2002. Inland is no stranger to the state, having purchased the Crossing at Killingly Commons, a 395,550-sf shopping center located in Dayville, for $60.2 million in October 2012.

Locally-based (West Hartford) Fremont Group MATTHEW F. KEEFE acquired the Metro Center office tower in downtown Hartford for $22.7 million from special servicer C-III Capital. The 12-story, 293,650-sf building was 83 percent occupied at purchase, but the sale price was far below what it had fetched in the past, even trading for $84 million in the late 1980s. The property had gone into foreclosure in 2009 after its landlord defaulted on a $25 million mortgage before surrendering the keys in 2011.

C&W Executive Director Joel Grieco worked with Rockwood Real Estate Advisors Managing Director Thomas Dobrowski and Vice President Cameron Pittman.

The landmark ESPN building sale came a dozen years after Winstanley paid a mere $6.75 million for the 400,000-sf complex on Middle Street before undertaking its patented repositioning program to restore value, an effort that paid off given it is being touted as Bristol’s largest-ever CRE transaction. C&W’s Capital Markets Group negotiated that high-profile continued on page 109

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exchange in representing the seller and procuring Inland, which made its investment under the entity Bristol Sports Center DST. ESPN occupies an estimated 370,000 sf.

Another story line for Connecticut in 2013 was the continued trend toward acquisitions by users, a phenomenon that has already taken hold in Massachusetts. The approach was led by the state of Connecticut’s acquisition of a pair of Hartford office buildings—the 556,000 sf Connecticut River Plaza for $34.5 million from FBE Limited and the 12story, 287,000 sf tower at 55 Farmington Ave. in CITY OF HARTFORD, CT Asylum Hill for $18 million from the Hartford Financial the CRE scene here, including Rhode IslandServices Group. The state, based Washington Trust, which financed a pair like other users, was look- of noteworthy second half deals across the boring to become owners to der, including acquisition of 40 Richards Ave. in AL MIRIN reduce their real estate Norwalk by the Davis Cos. from Mack-Cali costs.

Realty Corp. for $16.5 million ($14.4 million in “We had 16 office Washington Trust financing). The seven-story, buildings that traded 147,000-sf office property was 64 percent hands, and eight of those leased at the time of purchase, a deal negotiatwere to user/buyers,” ed by veteran broker Matthew F. Keefe, the presMulready reports. “In my ident of HK Group.

18-year career, I’ve never Washington Trust continued to expand into seen users account for half neighboring states, and officials at the Westerly MICHAEL GORDON of the deals,” The seeds based institution say business is now equally were planted by 2008’s divided between Connecticut, Massachusetts recession that froze a and the Ocean State. “By and large, 2013 was white-hot investment sales our strongest yet for our commercial real estate market, and Mulready adds group since we started 10 to 12 years ago when that “it directly correlates we were only doing loans in Rhode Island,” says with what has happened Senior VP Julia Anne Slom, voicing encouragewith interest rates at the ment after a robust wrap-up placing money on same time, which has the road. “I think we’re really on the map,” KATE SCHWARTZ skewed the difference Slom says of the cross-border business. “For a between owning and leasing.” McCormick, long time, one of our issues was getting people Mulready and Senior Associate Anna Kocsondy to know who we were in Massachusetts and brokered the 55 Farmington Ave. deal, as well Connecticut, but I think we’ve overcome that as another significant user/buyer transaction hurdle.” Connecticut got plenty of Washington involving a 55,000-sf office building purchased Trust attention in 2013 from both local players

by Keystone Cos. from VNA Health Care for $2.5 and those with a broader geographic scope million. such as the Davis Cos. CBRE and Mulready’s team had a busy year, “This is an example of the type of project also brokering the sale of a Farmington that has earned Davis Cos. a reputation as one office/industrial portfolio owned by the of the premier real estate investment, developGreenwich-based 627 Acquisition Co. for $11- ment and management firms in the Northeast,” plus million to three separate buyers, and 100 Washington Trust Chairman Joseph J. Helmsford Way in Windsor for $9.2 million. The MarcAurele said of his institution funding the 169,550-sf warehouse was acquired by Georgia 40 Richards Ave. venture that Davis Cos. paid Pacific from the SJW Land Co. and is 100 per- $113 per sf to secure. cent leased to Unisource through June 2018.

Elsewhere in the state, 1086 North Colony The lending community also made its way to LLC secured $2.6 million to develop a two-unit

retail plaza on 1.1 acres in Wallingford that is pre-leased to a fast-food restaurant and Verizon Wireless. The borrower in that instance is an affiliate of veteran CRE firm Tartaglia Commercial Properties, with completion of the 7,500-sf building on schedule for this year. In New Milford, Washington Trust Vice President Suzanne Walsh Erno delivered a $1.2 million financing for 173 Danbury Rd. owner New Milford Main Investment LLC backed by the 11,100sf retail property that is presently leased to RiteAid Pharmacy.

And in Westport, Luzern Associates LLC acquired 180 Post Road THOMAS DOBROWSKI East (a mixed-use property) and an adjacent parking lot at 11 Bay St. for $11 million from private owners Jo-Ann Price and Bernard Nevas, with WT providing $10.5 million in financing for the 32,000-sf mix of office and retail space JOEL GRIECO perched just one block from Main Street. Cushman & Wakefield advised the seller, Baystreet Properties LLC, on an exchange that delivered an impressive $339 per sf for the property that is home to a local bakery and other ground floor retail, plus 17,800 sf of second-floor office space.

Executive Director Al Mirin, Director Michael B. Gordon and Associate Kate Schwartz of C&W’s Private Capital Group were exclusive listing agents for the building that new ownership is expected to renovate and reposition. The Private Capital Group specializes in deals ranging from

$2 million to $15 million.

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mere $14 million in June 2002 prior to conversion from the police station into Jurys Hotel in 2004. JLL also had an advisory role in the transaction through hospitality expert Robert Webster.

Eastdil Secured was broker on both the Park Plaza sale and the Copley Square Hotel trade for $60.7 million in September. The seller of that historic 148-room inn at 47 Huntington Ave. was Capstar Copley LLC and the buyer CPF Copley Owner LLC, an offshoot of Cornerstone Real Estate Advisers. Eastdil Managing Director Christopher Phaneuf of the firm’s Boston office declined comment beyond acknowledging the Park Plaza sale was a rare event for the Hub given less than a handful of single-asset hotel sales have reached the $250 million level it took to wrest the 1920’s-era complex away from owners Highgate Holdings, Rockpoint Group and Donald Saunders, one of the Saunders family clans active in New England hospitality. That was double what the Park Plaza had sold for

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just two years prior when Saunders brought in new equity partners.

Across the river in Cambridge, prolific real estate investor Dr. Gerald Chan extended his footprint into the hospitality field with a $13

“

The local lodging investment market will remain one of the most sought-after gateway lodging markets in the US.

”

DAVID MCELROYS CBRE/NE

million buy of the 31-room Veritas at Harvard Square in Cambridge, a $419,000 per key buy of the boutique hotel. Those figures rival the numbers for both the Back Bay Hotel and Copley Square ($410,000 per key) results.

The national hotel story is generally upbeat

LIBERTY HOTEL, BOSTON MA

among the top 25 metro areas, according to McElroy, and he notes Boston has always been an easy sell to institutional capital given superior fundamentals including average occupancy rates that have never trended below 69 percent and were up to an impressive 79 percent in 2013, Pinnacle Advisory Group data indicates.

There has been an increase in hotel construction in Boston, with two new Marriotts coming on board last year and four more on the way, but McElroy opines in his 2014 forecast that “the local lodging investment market will remain one of the most sought-after gateway lodging markets in the US,” with high land costs and onerous permitting likely to keep new inventory in check.

The heightened interest in hotels overall has several CRE brokerage groups working to win listings or structure debt and equity packages, among them HFF, JLL and Eastdil, but following the recent spate of transactions that might have depleted the inventory for the near term.

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lining deals are in the offing, but he does report occupancy and revenue growth remain on the upswing in opining that “2014 is poised to be another attractive year for hotel transactions and capital financing.”

Speaking of financing, veteran developer David P. Leatherwood in August received $38.5 million in construction financing from RBS Citizens being used to build a hotel at 66 Sleeper St. in Boston’s Fort Point Channel District. Another $14.8 million was loaned by East Boston Savings Bank to Porter Square Hotel LLC, owner of a site at 1924 Massachusetts Ave. in Cambridge slated for a new hotel in the 65-unit range.

For existing assets, Deutsche Bank backed Loews Hotels in February’s Back Bay Hotel purchase with a mortgage of $62.0 million, while CIBC Inc. loaned $44.0 million to the owners of the Holiday Inn in Somerville plus two suburban hotels, while Cornerstone Real Estate Advisers wrapped up 2013 by securing a $38.0 million

HOTEL MARLOWE, CAMBRIDGE MA

refinancing of Cambridge’s Hotel Marlowe along the Charles River at 25-27 Edwin H. Land Blvd. Connecticut General Life Insurance Co.

provided the funding for that 236-unit boutique hotel that Cornerstone has owned since 2001.

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ous buy four months earlier of a 28,025-sf plaza at 8 Spit Brook Rd. in Nashua (Jos. A. Bank, Panera Bread, T-Mobile), but in several other trades over the 12-month stretch. Marcus & Millichap Vice Presidents Robert Horvath and Todd Tremblay harvested a Nashua Rite-Aid in early 2013 for $3.26 million, with the 15,000sf building on 2.1 acres acquired by Brennan Frost LLC from Levine Investments LP. The deal equated to a capitalization rate of 8.47 percent on a property where Rite-Aid has 15 years remaining on a 20-year lease.

Situated at the primary signalized intersection of Pheasant Lane Mall, 304 Daniel Webster Hwy. is a free-standing, single-tenant restaurant occupied by Uno Chicago Grill. The 5,700-sf restaurant has been operating from the site for a quarter-century, relays Spectra Realty principal Rick Rostoff, who negotiated the deal after being asked by Linear to seek out the property owner, an unnamed private investor who agreed to what the broker terms “an aggressive offer” and one that proved sufficient to put a deal together and close by year’s end.

The KeyPoint Partners “GRIID” database is the foundation of its annual market surveys, with research director Bob Sheehan compiling and deciphering the information. The latest review has Nashua (6.24 million sf) tops in

CVS PHARMACY, 125 DUBLIN RD., PETERBOROUGH NH

amount of retail among 39 cities and towns surveyed, of which that community and nine others make up 83 percent of the regional supply.

Manchester has the second highest amount at 5.4 million sf, followed by 3.8 million sf in border town Salem.

Retail sales in 2013 were not restricted to Nashua, with notable conclusions including Salem Park Plaza, a 37,950-sf strip center in its namesake community that yielded $8.0 million, plus a 41,000-sf multi-tenanted property in

Peterborough, the Monadnock Community Plaza, which yielded $2.35 million, and the ground lease on another Peterborough asset, the five-year-old CVS Pharmacy at 125 Dublin Rd. which fetched $2.98 million via a 1031Tax Deferred Exchange. That deal was orchestrated

by Andy Fleisher, of NAI Norwood Group advising the buyer, and with the seller being advised

by Vear Commercial Properties principal Bradley Vear, SIOR, whose client was hailing from East Moriches, NY.

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Holiday Inn Express was branded thusly following a 2001 renovation, while the Marriott Courtyard came on line in 2002. Spanning three generations, PLHG has been a hands-on manager and owner for more than 45 years with three Waltham hotels including the two at Route 128 and Winter Street and a Home Suites Inn on Totten Pond Road.

As noted in prior Real Reporter coverage, the Colliers International D&E team of John Broderick and Kevin Phelan arranged multiple hotel loans in 2013, including mortgages JOHN BRODERICK on Hotel Tria in west Cambridge and the Comfort Inn at Bell Circle in Revere, that property owned by Saunders Hotel Group. Those two and a third note on the jewel-box Lenox Hotel in Boston’s Back Bay (also owned by KEVIN PHELAN Saunders) were each 15year, fixed-rate loans, and each was done with a separate bank as the lender. “That’s pretty unusual,” debt expert Broderick says of having banks involved on such terms. Middlesex Savings Bank delivered $18.5 million to the owner of Hotel Tria, now flagged as a Best Western Plus after a renovation and expansion to 121 rooms. It is located at 220 Alewife Brook

COMFORT INN, REVERE MA

MARRIOTT COURTYARD, WALTHAM MA

Pkwy. near Fresh Pond.

The Lenox is a 12-story, 213-key hotel that Colliers arranged the 15-year loan for $37.5 million and a revolving credit facility of $2.5 million. “It was a pleasure working on behalf of the Saunders family,” Broderick said later in noting the Lenox has been under that family’s control for a half-century, describing it as “a very unique situation” where “the pride of that ownership is evident in every aspect of the hotel.” Adds Broderick: “People’s United Bank recognized the opportunity to start a key new relationship, and executed flawlessly in the transaction.”

Cambridge Savings Bank was the lender on the Comfort Inn at 85 American Legion Hwy. in

Revere, with a $14.0 million mortgage secured on that eight-story, 208-room inn whose primary business comes from Logan International Airport barely two miles away from the 14-year-old inn. CSB’s appetite for hotel lending extended up to Woburn, as the bank provided Pyramid Hotel Group $17.5 million DENNY MEIKLEHAM to buy out longtime partner National Development’s stake in a 149-suite Residence Inn at MetroNorth Corporate Center.

Pyramid is an experienced hotel manager and operator now in its 15th year that joined National Development in constructing the hotel, with Pyramid said to have held a position of roughly 40 percent prior to the transaction.

CMBS money in the amount of $19.7 million was provided by Cantor Commercial Real Estate Lending that Ultima Hospitality of Chicago used to acquire a 202-unit Marriott Courtyard at 75 Felton St. in Marlborough from Fine Key West Investments LLC, whose president is Fred L. Branovan. The five-story hotel that will mark its 30th anniversary in 2015 was acquired at mid-year with a loan that one document shows carrying a 4.78 percent interest rate and maturity of July 2018.

Northern Bank & Trust Co., a Woburn-based lender, delivered $6.4 million to Californiabased Ronit Hospitality LLC used to buy a hotel at 10 Independence Dr. in Chelmsford at a price tag of $8.0 million. That early August purchase was made from Wedge Hotels Trustee Corp., whose president is Brian C. Stage.

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urban market are indications of new hotel construction getting lender attention, a concept virtually unheard of since the 2008 recession crippled the sector outside of metropolitan centers.

A Real Reporter article in November unveiled efforts by National Development and its partners to bring a hotel to New England Executive Office Park in Burlington, a landmark business campus bought by the group last summer for $216 million JOSEPH ZINK with a strategy of modernizing it to provide varied amenities, including a hotel. Indications at the time were of negotiations with experienced hotel operator and Burlington-based firm Finard & Co., although it MARRIOTT COURTYARD, MARLBOROUGH MA is unclear where those discussions might be at present. underway to do a similar pact with a hotelier, The same article discussed a similar plan by maintaining the diverse Marlborough market developer Joseph Zink of Atlantic Management could support more hotel capacity despite havCorp. for his 110-acre office park in ing thousands of rooms already.

Marlborough. Atlantic Management last sumAlso out in the MetroWest market, Holliday mer sold a portion of the former Hewlett- Fenoglio Fowler Managing Director Denny Packard development to a residential developer, Meikleham in October brokered the $1.75 miland Zink at the time confirmed negotiations lion sale of a land parcel at 15 Connector Rd. to Paresh Patel of Holyoke, a developer proposing a 106-unit inn on the 7.2-acre site whose previous owner had a similar plan when buying the parcel in July 2007 for $2.5 million.

Patel received a $3.0 million acquisition loan from Enterprise Bank & Trust Co. Meikleham, a veteran hotel broker who joined HFF this summer, declined to discuss the client’s intentions, but confirms developers are angling to construct new product outside Boston and Cambridge.

Some market MARRIOTT RESIDENCE INN, WOBURN MA

watchers cringe at the idea, claiming suburban fundamentals do not support increased capacity, but hotel veterans spoken to explain some developers expect a better located site, modern construction or a favored brand could usurp existing competitors. “That’s the way they look at it,” Meikleheim told the Real Reporter in terming it a process of “cannibalization” among suburban owners. Zink expressed as much in his interview, pointing to substantial infrastructure and favorable topography that he opines could make a hotel at his complex more viable than other properties.

There is only a limited number of lenders willing to fund hotels in such capricious conditions, but 2013 revealed a broad willingness to back existing product throughout the Bay State.

Properties attracting debt to acquire or refinance hotels included1861 Main St. in Brewster, an historic 14-unit property dating to 1860 that was purchased for $1.53 million by Brian Blair and Charles Heinz with $1.19 million from TD Bank in an early December exchange.

Another late 2013 loan of $693,000 was given

by Leader Bank to facilitate the $1.03 million purchase of 27 units at 4 Boardman St. in Westborough by Shaojun Xie and Xiaonan Liu. That 25-year-old motel was acquired from George F. Waters, trustee of Avoca Realty Trust.

The $3.9 million purchase of an even older motel at 1005 Belmont St. in Brockton was funded with $2.73 million from Baycoast Bank, with Ashok I. Bhojwani taking on the 50-yearold operation that has 69 units set on a 3.3acre parcel. It last traded for $3.1 million in March 2008.

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Notable CRE hospitality trades of the past year involving Wason Associates include the Christmas Farm Inn and Spa, an historic White Mountains operation in Jackson acquired by hotel veterans Gary Plourde and Sandra Plourde, who paid $2.5 million in May for the 15-acre, multi-building property that dates to 1786. In July, the Royalty Inn at 130 Main St. in Gorham fetched $4.0 million, giving the buyers an 82-room operation plus a major health club facility and leased restaurant on

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BEST WESTERN, FREEPORT ME

to create a residential function on the premises. The Royalty Inn was 1.5-acre parcel. “We had an okay acquired by a Massachusetts-based year—it wasn’t great, but it was operator with one hotel in okay,” Wason says in recapping Newburyport and now two in the 2013. The coming season promises to Granite State. Also in July, the Best be stronger, he relays, although cauWestern Freeport Inn on Route One tioning there is a dearth of quality in Freeport, ME, transferred for $3.45 product remaining. million.

Colliers facilitated hotel financWason Associates also handled PETER ANNON ings in the Great State of Maine durassignments in Vermont, among ing 2013, arranging a $7.86 million them an Econo Lodge in Shelburne Goldman Sachs note backing Maine that listed for $1.99 million and ultiCourse Hospitality Group’s 92-unit mately traded in late October. The Marriott Courtyard near Portland property at 3164 Shelburne Rd. is a International Jetport and another 59-room, exterior $8.3 million from Katahdin Trust Co. corridor property to refinance that borrower’s that features extended stay elements and JOSEPH CARDILLO Homewood Suites by Hilton Portland, a four-story extended stay hotel in 20 two-bedroom South Portland also sporting 92 units. suites complete with The fixed-rate mortgage runs for 10 kitchenettes and priyears and was used to retire an existvate patios. A ing loan originated by TD Bank and defunct Vermont to pay off a second TD mortgage hotel at 3835 Main secured by an adjacent development St. in Manchester site. “It’s a good market,” Colliers was bought by a EARLE WASON Vice President Jeff Black says in developer with plans explaining that and a proven sponsor active across New England with multiple Hilton and Marriott flags combined to generate an encouraging number of lenders vying for the opportunities in metropolitan Portland.

The Homewood Suites was completed in 2008 and is ranked as the top hotel of its competitive set, outlines Colliers, with more accolades in earning the 2013 TripAdvisor Certificate of Excellence Award. The Colliers International Capital Markets effort in both Maine loans included company Co-Chair Kevin Phelan and was part of an active year for the Boston-based operation (see story, lending section).

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million to secure the property from Jones & Bartlett, an educational book publisher that had moved there from Boston in 1995 to a 25,000sf office building constructed in1986 in a noncommercial part of town. With several singlefamily homes developed in the area since, and 40 Tall Pine Dr. requiring zoning relief for any commercial structure, the listing that originated through Framingham-based PCG had only limited appeal, recalls Putprush, and even less prior to the zoning change that said senior residential 40 TALL PINE DR., SUDBURY MA ventures such as Dudley Brook Preserve no longer needed 20 acres. It was a seemingly sub- end, Caligaris tells the Real Reporter in also tle switch but one Putprush immediately marveling at the instincts shown by Putprush grasped the significance of, much to the amaze- and follow-up by Needham-based REP Advisors, which represented the buyer, with PCG on the ment and delight of client Donald W. Jones Jr. “It was fabulous,” Jones says. Having only seller’s side of the transaction.

Putprush had accolades for all involved, and received a tepid offer to put an eating disorders clinic at 40 Tall Pine Dr., the zoning relief proved both Caligaris and he commended the consera game-changer, he recalls. “Rick knew right vation commission, planning board and abutaway what it meant and who to call, and he fol- ters for embracing the final concept and moving lowed that all the way through,” says Jones, it ahead. “It is a little small for what we like to whose family sold the publishing business prior do, but it was an idea we knew would work, to leaving 40 Tall Pine Dr. “We couldn’t be hap- and we are really appreciative of everyone who pier with the way it worked out,” Jones says of made it happen,” says Cagilaris, including the his group’s end game on the real estate. engineer, Schofield Brothers of New England, a Registry of Deeds records show Green Cos. Framingham-based firm hired to address the securing a $2.6 million mortgage from Cape site’s tricky topography, and legal counsel Rollins, Rollins & Fox of Newton, “without Cod Savings Bank on 40 Tall Pine Dr. The office building was quickly demolished whose thoughtful process and positive guidto make way for an amenity rich residential ance the deal would not have happened,” condevelopment that already has a model on site curs Putprush. Overall, he says, “It was an interand is well on its way for a completion by year- esting and complicated deal that required a lot

of cooperation . . . and the result is a project that meets a real need in the community.”

Already, Putprush says, a handful of the 26 units have been committed. “They are selling like hotcakes,” he reports. One website showed a two-bedroom, two-bath unit of 1,800 sf listed at $688,000, and describes Dudley Brook Preserve as being in a “bucolic, wooded setting.” Green Co. offers a quartet of Fresco models sporting signature private courtyards for each unit and townhomes that are “minimally attached for the privacy of a single-family home with thoughtfully designed, low maintenance exteriors.”

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with the closing finally coming the first week of December.

The CBRE/NE team keeping talks together includes principals David Connolly, David Corkery and Mark Reardon. Primarily a singlestory structure, 146 Dascomb Rd. does feature a second level of office space totaling 27,300 sf along with 7,800 sf on the ground level.

Warehouse comprises the bulk of the facility at 188,000 sf, offering clear heights to 24 feet and 30 loading dock doors and one drive-in door. In its marketing campaign, CBRE/NE relayed that 146 DASCOMB RD., ANDOVER MA the building despite its age “is in excellent condition,” and benefits from rail access, a 16-bay ing the firm will only require about 75,000 sf of maintenance garage and parking for more than existing space. Rumors are rampant regarding possible suitors, but their advisor declined to 250 vehicles.

Thomson would not discuss any ongoing provide any insight on whether anyone is tarplans by his client, with some estimates claim- geting the opportunity. Restaurant Depot offi-

cials also last year acquired a land parcel in southern New Hampshire. The operation already has stores in Connecticut, Rhode Island and at least three Massachusetts units in Avon, Everett and Needham.

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The 118,000-sf Gateway Center was acquired by Albany Road Real Estate Partners for $13.2 million or at $112 per sf an estimated 55 percent of replacement cost. The property was 87 percent occupied at the time of purchase by strong credit tenants including Admirals Bank, the Big East Athletic Conference, ERM, Precision Design and TIAACREF, with no lease rollover until 2017 in a market whose Class A Office vacancy rate is just above 10 percent.

“The cap rate was a very strong one for the market,” CBRE/NE principal Alden Anderson Jr. says of Gateway Center. The Rhode Island professional and Capital Markets chief William Moylan represented the seller and procured Boston-based Albany Road, an investment group that has been a champion of Rhode Island since launching in summer 2012, having now bought two buildings there totaling $26.7 million of investment for a fund that crested $100 million in 2013 with holdings in four of the six New England states.

“Gateway Center generated a lot of interest, particularly when you look at the fact that it’s only on a ground lease, and you’re really only purchasing a lease hold interest,” Anderson observed. “The price that we were able to achieve (when) you can’t own the underlying ground was very good.”

ELIZABETH MILL BUILDING, WARWICK RI

Albany Road President Christopher J. Knisley expressed delight from his perspective in snagging what he terms “one of the premier, lowrise Class A buildings in downtown Providence,” a building benefitting from $1.2 million of recent capital upgrades including a roof replacement, lobby renovation and mechanical modernization. Buying at such a low basis will enable his firm to compete rentwise going forward, says Knisley, who notes the acquisition price is 35 percent below what the

building last traded for in sunnier climes.

Knisley is among those investors retreating from situations such as Boston where capitalization rates are in the 5 percent levels and below.

The institutionally trained investment specialist says a lack of interest for the Providences of the

“ ”

There is real interest in Rhode Island again.

SIMON J. BUTLER CBRE/NE multifamily broker

GATEWAY CENTER, PROVIDENCE RI

world has created a spread of up to 4 percent higher than where an asset of Gateway Center’s quality would trade at in normal times. That delta, he opines, “should tighten as the worldwide economic situation improves and institutional capital returns to secondary markets, or even as frustrated capital that has found difficulty penetrating the core markets comes to realize the attractiveness that a Gateway like opportunity represents on a risk-adjusted basis.”

Knisley says he was also impressed the way Gateway Center leased up while in the hands of an out-of-state special servicer, and predicts a capital improvements program being undertaken will make the asset even more popular.

Albany Road was able to secure a 10-year, $10.0 million loan from Bank RI (with Brookline Bank participating) at a fixed rate of 3.23 percontinued on page 117

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RHODE ISLAND TIDE RISING continued from page 116

cent the first three years and seven subsequent one-year floating rate agreements. The first three years are interest only debt payments, which Knisley notes will enhance distributable cash flow early on in a debt structure that he says also provides “a great deal of investment flexibility” as the value-add strategy is implemented.

CBRE/NE’s other big Providence listing of 2013 concluded when the five-building 200,000-sf American Locomotive (ALCO) complex in Providence was purchased by Foundry Associates, a local developer specializing in adaptive re-use of historic buildings whose purchase Alden points to as indicative of the faith that investors are developing. “If you look at the ALCO transaction, we had very strong interest in that regionally,” recounts Anderson. “You WINCHESTER PARK AND WINCHESTER WOOD, EAST PROVIDENCE, RI would expect that it would be limited to regional players just because it has a very opportunis- ity that Dean bought – and there will be some Real Reporter, “This to me is a signal that there tic side to it in that it was only 70 percent leased renovation of office space.” An SIOR who recalls is real interest in Rhode Island again. It shows at the time of sale. There’s quite a bit of upside there was encouraging activity in the market in people feel the economy there is finally on the to it.” Anderson reports that talks are currently 2013 and heading into 2014, Giuttari adds upswing.”

In other transactions, Washington Trust prounderway that could soon bring the property to “there is a large volume of people looking to do residential conversion (from existing industrial vided $7.2 million in financing for Linear Retail 90 percent occupancy. to purchase Smithfield Commons, a 35,125-sf In other deals, Michael Integlia & Co. pur- and office buildings).”

Earlier in the year, New York-based Gaia shopping center at 400 Putnam Pike in chased the Elizabeth Mill Building (the former Leviton Manufacturing property) in Warwick. As Real Estate purchased two East Providence Smithfield. The renovated building set at a sigpart of the sale, Dean Warehousing Services Inc. multi-family communities, Winchester Park and nalized intersection of Routes 5 and 44 is home purchased the 635,000 sf warehouse attached Winchester Wood, and 20 acres of undeveloped to national retailers such as Starbucks, Papa to the Elizabeth Mill, which it had been leasing, land for $55 million, the largest multifamily buy Gino’s, Verizon, Sprint, H&R Block, and UPS. The plus 32 acres of the 85-acre property, for $4.6 in Rhode Island since 2005. CBRE/NE represent- asset enjoys an average daily traffic count passmillion. “That was an interesting deal,” ed the buyer in the transaction and procured ing by on Route 44 of 28,100 vehicles and President of MG Commercial Real Estate financing through John Kelly of the group’s mul- 21,000 on Route 5. Linear is a Burlington-based President Michael Giuttari, tells The Real tifamily finance division. CBRE/NE’s multifamily investment firm whose portfolio of convenience Reporter. “There’s going to be some more contingent led by Simon J. Butler and Biria St. oriented retail now extends from New development at the site—the renovation of an John orchestrated the hotly contested deal. At Hampshire to Rhode Island.

Even as it branches out into new markets existing building and the big warehousing facil- the time of the sale (in May), St. John told The including Connecticut and Massachusetts, Washington Trust Co. continued to support home state efforts, as evidenced in the $18.5 million the bank and Rockland Trust Co. joined forces on to provide Foundry Associates. Washington Trust Vice President Laurel Bowerman indicated in a prior article the anticipated boost for the market and also praised the buyer as “a very sophisticated” CRE firm with a proven track record for adaptive reuse properties.

Washington Trust also provided financing to Residences at Garden City, LLC for the purchase of Garden City Apartments, a garden-style apartment complex in Cranston, RI, which consists of seven two-story buildings with 56 onebedroom apartments and 38 two-bedroom units across 5.16 acres of land.

SMITHFIELD COMMONS, SMITHFIELD RI

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Maturing Senior Market Gets Notice

BY MIKE HOBAN OSTON — As Baby Boomers enter their retirement years, with nearly 20 percent of the US populace tabulated to be 65-plus by 2030, real estate developers and investors are eyeing the demographics and actively deploying capital into senior living facilities.

That trend is evidenced by the rising number of such trades in 2013, according PHIL ANDERSON to industry veterans, with institutional capital showing a corresponding increase in the asset class that continues to evolve throughout the Northeast.

Capital interest is fueled in part by a desire for less risky ventures, outAARON ROSENZWEIG lines LCB Senior Living spokesman Ted Doyle. “It is an investment sector that has solid demographics,” reports Doyle, something he notes is studied carefully in the aftermath of 2008’s brutal recession. “A lot of people are still a little RICHARD SWARTZ shy with any (investment) that presents any kind of undue risk,” says Doyle. “And a lot of (investors) are recognizing the need for (senior housing), not the least of which is the institutional money set. Says Doyle: “The need is clearly there and we’re looking for markets to invest in, and this is one of the most robust and attractive markets.”

B

THE ARBORS AT BEDFORD, BEDFORD, NH

HE INN AT ROBBINS BROOK, ACTON MA

LCB acquired two assets in 2013, as well as breaking ground on new facilities in Ipswich, Watertown and a pair in Connecticut. The firm, which is largely comprised of the same team that drove Newton Senior Living to become the16th largest senior living developer firm in the nation before being acquired by Lazard Freres in 2005, purchased facilities in Bedford, NH, and Lincoln, RI with the backing of some heavyweight equity partners.

LCB partnered with Prudential Real Estate in acquiring the 60-bed Albion Court in Lincoln, RI (re-branded as “The Lighthouse at Lincoln”) for approximately $12.3 million. The firm launched what intends to be an ambitious expansion plan last spring in purchasing The Arbors of Bedford, a specialized assisted living facility in Bedford, NH, for $35 million. Cushman & Wakefield’s Equity, Debt & Structured Finance Group arranged joint venture equity with Grosvenor

Fund Management, plus Bank of America delivering acquisition monies.

Loan officer Michael Lindgren of Cambridge Savings Bank, whose institution backed “eight or nine assisted living and memory care facilities” deals last year, reports increased demand for the asset class. “If you compare (Greater Boston) to more mature senior living markets, we are underserved on a demographic basis,” he details. “All of the facilities (that CSB financed) are performing well above pro forma and leasing up faster than expected, so that indicates strong demand.” A majority of the deals that CSB provided financing for were for new construction, with just a couple of refinancings, says Lindgren, who stresses that each project has to be carefully researched and crafted before financing should be provided.

The increased demand is fueling action from both institutional capital and regional players such as Wellesley-based Benchmark Senior Living, among New England’s most venerable assisted living and senior housing creators. The Wellesley based firm acquired a pair of senior living properties in Massachusetts in 2013 with joint venture partner Health Care REIT of Chicago, assets obtained from AEW Capital for $63.2 million. Benchmark added The Inn at Robbins Brook, a 79-unit facility in Acton, and the 97-unit Forge Hill Senior Living facility in Franklin, giving it 50 such operations in New England. The properties were marketed by Holliday Fenoglio Fowler on behalf of AEW Capital Management, led by Managing Director Ryan Maconachy and director Chad Lavender. continued on page 119

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NEW BALANCE HQ continued from page 48

firm with its own local legacy—100 years as a fixture in the Allston-Brighton neighborhood— launch its multi-pronged redevelopment that calls for a train station connecting to downtown and 650,000 sf targeted at companies promoting health and wellness along with communications and technology companies—the sort of clean-tech industries that are quite the opposite of a cattle yard, or the gritty industrial area it evolved into after World War II, with the hulking Barry Controls Building one JIM DAVIS now-vanquished landmark from the Guest and Market Street area where the project is centered. In the future mix is a 350,000-sf sports complex, 65,000 sf for restaurants and retail and a 175-room hotel.

Douvadjian credits his JIM HALLIDAY clients for crafting a viable concept that capital could embrace, with NB Development Group comprised of Managing Director Jim Halliday and Directors Keith Craig and Brian Howe plus the New Balance sponsorship led by CFO John Withee, Treasurer Alan Rosen and Director of Finance Kevin Doyle. “Not

SENIOR MARKET continued from page 118

Health Care REIT was also involved in a smaller transaction, acquiring the 135-bed Meadows Skilled Nursing & Rehabilitation Center in Rochdale, MA for $5.85 million from Kindred Healthcare.

In other regional senior living transactions in 2013, Sentio Healthcare Properties, Inc., a Floridabased REIT focused on MICHAEL LINDGREN healthcare-related properties, acquired Standish Village at Lower Mills in Dorchester, an 85-unit assisted living/memory care facility for $15.5 million from Bostonbased Senior Living Residences. And Texasbased Capital Senior Living is the new owner of Whitcomb House, a 55-unit, family-owned assisted-living residence in Milford bought for $6.1 million.

Cushman & Wakefield’s Senior Housing

BOSTON LANDING, BRIGHTON MA (RENDERING)

only does this project transform the Brighton neighborhood into an attractive alternative for companies looking to move into the city, it also serves as a striking entryway for the thousands of commuters traveling into the city,” says Douvadjian.

Hovering over the Massachusetts Turnpike Extension, the existing complex already is a fixture for traffic reports, but there are more pragmatic applications on the horizon, according to Welch, with the developer offering up a price discount inside city limits to the traditional downtown office markets that are seeing rapid rental

growth. That could “attract and retain Boston’s elite workforce,” observes Welch, who says the option “comes at a crucial time” because costconscious firms need not move farther outward.

Says Welch: “New Balance’s construction of the Boston Landing commuter rail station, as well as the planned infrastructure improvements, will help guide this area into one that will thrive for many years to come,” possibly providing the final piece to make it a legitimate Live/Work/Play destination given Brighton’s deep existing housing stock and bustling Brighton Center barely a quarter-mile away from Boston Landing.

Capital Markets team led by Phil Anderson and Richard Swartz was especially busy on a number of fronts in 2013. As to LCB, Anderson says the leadership’s pioneering legacy of senior housing development “and their outstanding management track record were extremely desirable to both Grosvenor and Bank of America.” Equally pleased with the arrangements was LCB Senior Living CEO Michael Stoller. “We look forward to our partnerships with Grosvenor and Bank of America, and appreciate the efforts of Cushman & Wakefield on this transaction.”

Things went so swimmingly, C&W’s senior squad was engaged to secure the simultaneous capitalization of LCB’s first two development projects, with $19.8 million dedicated to construction of The Residence at Riverbend, a 75apartment assisted living community in Ipswich that will also have a memory care unit. PNC Bank is financing construction of the project slated for completion this autumn, while Prudential Real Estate is providing joint venture equity.

A similar endeavor in Watertown Square will have 90 units and is being developed in part-

nership with the New England Carpenter’s Union in a separate account pension fund managed by Great Point Investors. PNC Bank was in on that $18.5 million package as well, again for construction financing on a project that has a similar completion date as the Ipswich complex.

“LCB is off to a great start with these inaugural developments, and we are excited to assist with the capitalization of their pipeline transactions,” Swartz said in a release after that dual-pronged assignment was completed. Joining Wagner and him on the Senior Housing Capital Markets team are Director Aaron Rosenzweig and Associate Stuart Kim. In a development deal, Northbridge Assisted Living of Burlington—another prolific firm in that realm—paid $2.3 million to the Green Co. for nearly four acres of land at The Pinehills mixed-use complex in Plymouth. The approved site at 10 Golf Dr. will house 21 independent living units, 29 memory care apartments and 30 more deemed assisted living. Needham Bank financed the land site and construction costs

with a $17.1 million mortgage.

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GREEN DISTRICT continued from page 49

THE ICON, 75 BRAINERD RD., ALLSTON MA (RENDERING)

have been a great client,” says Cornerstone Realty Capital principal Paul Natalizio, citing Mount Vernon Co.’s proven track record as one factor in the lender response, as well as the progress made so rapidly on Brainerd Road.

Percelay dispenses credit of his own towards the lending community’s warm reception, a reaction he attributes to their recognition of the changes made and the ability to compete favorably for young professionals put off by paying exorbitant rents in downtown Boston, plus those working at the nearby Longwood Medical Area.

Also garnering thanks from the developer is Cornerstone Realty Capital. “They have gotten us some great rates,” he says of the First Republic Bank deal, joining other clients in concurring the Cornerstone team led by Natalizio and Brett

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traded by Leggat McCall Properties, a venture stalled in the 2008 recession. Mount Vernon was able to move that project off the drawing boards, and in the meantime, decided to make a play by acquiring critical mass sufficient to transform the entire neighborhood. “It is incredible,” remarks Boston Realty Advisors principal Christopher D. Sower, who was at Cushman & Wakefield when the inaugural deal was completed by that brokerage firm. “You just can’t recognize it from how it was,” adds Sower.

The evolution continues, with Percelay noting Starbucks has agreed to establish a unit there, a result Percelay regards as a fitting tribute to the progress made thus far, recounting how the latte purveyor “politely declined” an invitation three years ago to come to the Green District, whereas now the interest has been fully requited. “It has come full circle,” says Percelay.

“We think it says a lot.”

One constituency also now beating a path to the Green District’s doors are lenders, with most of the financings arranged through mortgage broker Cornerstone Realty Capital of Lexington. On top of a flood of capital backing other ventures Mount Vernon Co. is pursuing as far a field as Nantucket, loans provided to the Green District endeavor last year included $25 million from First Republic to refinance the Edge and $26.5 million from Commerce Bank to fund The Icon’s construction. The year prior, Cornerstone secured $19 million for construction of The Edge, and in 2009 arranged $17 million to refinance a 157-unit portfolio of AllstonBrighton apartments including the original Green District investment at 8 Griggs St. “They

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Pagani has come through time and again with its approach of pitting a variety of local, regional and national lenders against each other for a given deal. “Cornerstone has been a major source of our capital,” Percelay says, telling testimony considering the rapid-fire investment pace his company has been on even before others caught wind of the changing tide influencing Boston over the past 18 months.

At least 25 CRE transactions involving Mount Vernon Co. have been completed in that time by Percelay’s count, enough for him to opine the operation “may be the most active player in the middle market space right now,” with real estate on Allston’s North Beacon Street and South Boston property among the latest pursuits. Brookline Bank provided $5.28 million in July when Mount Vernon Co. bought an apartment building on Cleveland Place for $6.6 million. Belmont Savings Bank loaned $2.36 million for a pair of South Boston properties acquired separately in 2013, and Digital Federal Credit Union ponied up with $6 million on a Warren Street building.

Percelay says the Green District is turning heads besides lenders, with its master-planning business model being used as a case study at one Hub university and other landlords monitoring the embrace of sustainable tenets that even engages tenants by having them sign a pledge to tread lightly on their carbon footprint. “It is getting attention,” says Percelay, who further likes to point out that the Green District construction of three buildings and renovation of three more has now surpassed one million work hours performed by a union labor force.

11 and 12 Bickford Rd.; and 507-519, 521-539 and 543 Main St. Malden 810 Worcester Rd., Natick 137 Charles St., Units 1, 2, 3 and C., Boston 124-128 Main St., Carver 78 Waverly St. & 446 Western Ave., Brighton 616-620 REAL CambridgeREPORTER St., Cambridge THE ® 204 Hanover St., Boston 331 Great Rd., Bedford 275 Hancock St., 1569 North Main St., Palmer a/k/a 273-287 Hancock St., Quincy 420-424 Hartford Tpk., Shrewsbury 1261-1299 Blue Hill Ave., Boston Address 1065 Truman Hwy., 2 andArboretum 3-4 Union Sq.Boston and One Way, Burlington 16-18 Everett St., Somerville 35 Cape Raynham andReading Taunton 40-42, 66Hwy., and 70 West St., 163 McKeon Hampshire St.,Worcester Cambridge 110 Rd., 500 Broadway St., Malden 140 Worcester St.,Worcester West Boylston 110 McKeon Rd., 10 Village Green Way, Marshfield 886 Franklin St. & 25 Industrial Rd., Wrentham 448 and 460 Waverly St., Framingham 45 East Newton St., Boston 55 Franklin St. and 22 Hart St., Brookline 587-593 Washington St., Weymouth

Malden Properties LLC ARKEPHILMO LLC William M. Rao Marketplace Square LLC 446 Western Avenue LLC Shree Manakamana LLC 204 Hanover LLC Jabe Partners LLC North Quincy Realty LLC Colonial Pacific Leasing Corp.

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Malden Main Street LLC Everett Co-Operative Bank Santander Bank Adelfia-L LLC Middlesex Savings Bank John E. Sarno John E. Sarno Carver Square Corp Stanley Shuman Brookline Bank Cambridge Property LLC ANNUAL REVIEW East Boston Savings Bank THE Joseph A. Milano Brookline Bank MRI Realty Inc TD Bank R. Carlow Family LP South Shore Bank Jesse M. Lanier U LT I - F A M I LY J.J. Farrell Marlborough Succah LLCInc Eastern Bank Savings Bank Seller Lender/Mortgage WJG Realty Co. LLC GerardoLLCI. Fabrizio and Burlco CarloRealty Maugini-Hansen MRI Inc TD Bank Reading Apartments LLC Marianne Sanders Toman Realty Corp MutualMultifamily One BankCapital LLC Guardian Cliffside LLC CBRE MMB LLC Toman Realty Corp Mutual One Bank Winslow Woods LLC CBRE Capital Markets Inc. P.T. Realty Corp RBS Citizens Joseph Gaied Rockland Co.Property Fund LP/ Harrison Commons LLC Blackrock Trust Granite Cheryl Ann Fay,LLC Edward O’Malley, People’sMae Federal Savings Bank Fannie North Valhalla Eva O’Malley, Johanna O’Malley and SP5 WoodR. Alta Mill Street LLC Inc Norwood Realty Management TD Bank Margaret O’Malley

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Ave., 615 Arsenal St., Watertown BP Watertown Retail LLC EDF Watertown LLC RBS Citizens $10,325,000 $62,925,000 20-26 Essex St., Andover Barry R. Finegold Walter W. Topham Bank of New England $1,049,900 $879,920 50 Middlesex Ave., Somerville PS Northeast LLC Somerville Middlesex Self Storage LLC $21,160,000 210-212, 216, 220 and 224 Northhampton St.; 9 Main St., Peabody 407 Squire Road LLC Angela Karavolas Lowell Five Cent Savings Bank $1,000,000 $750,000 405 Lincoln St., Hingham ARC DBPPROP001 LLC CFCDS-3 LLC $9,029,351 38 Springfield St. Lot and10, 792-794, 15 East Independence Dr., Ayer 798-800, Ozark Automotive Distributors Inc. NIP Owner II LLC $20,700,000 9 Main St., Peabody 407 Squire Road LLC Angela Karavolas Lowell Five Cent Savings Bank $1,000,000 $250,000 1080 Eastern Ave., U-1001, Malden ARC DBPPROP001 LLC CFCDS-H LLC $8,468,793 804 and 808 Tremont St., Boston 156 Lincoln St., Brighton Public Storage Self Storage Lincoln St. LLC $20,460,000 593-599 Washington St.,Springfield Pembroke 599 Washington LLC LLC LFDHConstruction LLC Plaza LP LLC $1,000,000 Post Office Square, Princeton Plaza LLC Princeton Massachusetts Housing Finance Agency $17,200,000 $16,125,000 145 Performance Blvd., Penny Lane Associates RAM Brookline Bank $8,160,000 $3,075,000 945 Moody St., Waltham Public Storage Self Storage Moody Waltham LLC $19,960,000 a/k/a 1 and 3 River Pl.,*II, Lowell Condominium Element Goldsmith LLC LLC On The Rail Farm Co. MiddlesexBank Savings Bank $1,000,000 $800,000 145 Performance Blvd., Springfield Penny LaneGroup Associates RAM Construction LLCInc Brookline $8,160,000 3,825,000 55 Murphy Dr., Avon Avon Freezer Owners LLC 55 Murphy Drive LLC Liberty Bank $13,000,000 $9,750,000 off Oak Goldsmith Littleton 24 St., andStreet, 1 River Ct., Amesbury 24 Oak Street LLC Zell Riverwalk LLC Salem Five Cents Savings Bank $15,475,000 $12,380,000 112 Burlington Mall Rd., Burlington Vinebrook Plaza LLC JPMCC 2006-C1BC14 Burlington Mall LLC Cambridge Savings Bank $8,150,000 $5,000,000 380 SouthFalmouth Worcester Rd., West NortonFalmouth CPWL Norfolk SyscoRogers Boston LLCLLC BostonMiddlesex Private Bank & Trust Co. $12,200,000 $6,500,000 681 Pleasant West Hwy., Steven Haddad and Robert John and Sandra Rogers North Savings Bank $950,000 $2,073,750 120 St., Watertown AIMCO PleasantLLC Street LLC Millisor Cresset Pleasant $15,125,000 16-20 Boston Rd., Chelmsford Chelmsford Town Center LLC The Stop & Shop Supermarket Co. People's United BankBank $7,600,000 $4,500,000 Find the full list of Industrial transactions by logging in at www.therearlreporter.com under ARCHIVES 9 Stuart Rd., Chelmsford Jumbo Capital Chelmsford Partners LLC LIT-Chelmsford LLC East Boston Savings $10,755,000 $7,600,000 217 and 219Ave., Athens St., Boston Connelly LLC Peter Romikitis Hingham Institution $1,672,000 9215, Commonwealth Boston 9Ryan Commonwealth Pythia Realty Inc Pythia Realty Inc for Savings $13,297,500 $8,297,500 230 Oak St., Brockton Extra Space Properties Two LLCLLC Carey Storage I (MA) LLC $7,160,000 146 Dascomb Rd., Andover and Tewksbury JMDH Real Estate of Andover Brockway-Smith Company $10,500,000 9 Commonwealth Ave., Boston 9 Commonwealth LLC Pythia Realty Inc Cambridge Savings Bank $13,297,500 $14,200,000 649-655 SquireDr., Rd., Malden Wesley Squire LLC Squire People’s United Bank $7,057,125 $8,000,000 400 Research 400Avenues Research Drive LLC LLC RREEF LLC America REITLLC III-ZI LLC Chicopee Savings Bank $10,485,000 $5,500,000 136-138 HighlandWilmington Ave., Somerville The Group Chestnut/Highland East Boston Savings Bank $12,250,000 $16,786,000 O F F I C E Access Road, Lot 35; and 560 and Access Road LLC Access Road Associates LP Boston Private Bank & Trust Co. $7,000,000 $6,300,000 401 Elm St., Marlborough Charles K. Ribakoff II CJS Holdings II Inc TD Bank $10,000,000 $10,000,000 401 Essex St., Beverly Tpk., Norwood Turtle First Baptist Beverly Housing First Baptist Beverly Housing $11,000,000 $2,704,613 Address BuyerCreek Housing LLC Seller Lender/Mortgage Price Mortgage Value 570 Boston-Providence for TheDennison Elderly IncOffice Products Co., for the Elderly Inc 11,Better Way, Chicopee Avery Products Corp LLC, Avery $8,391,700 2W andCentral 3 Center SRI Ten Center Plaza MA-Center Plaza HSBC Realty Credit $307,000,000 $207,000,000 137 St., Plaza, NatickBoston Judi A. Ross Central Speen LP LLC, managed by $7,000,000 401 Turtle CreekT&G Housing First BaptistTelegram Beverly Housing Red Mortgage Capital $11,000,000 $10,313,300 5, 7 Essex and 9St., LattiBeverly Farm Rd., Millbury Worcester LLC LLC Worcester & Gazette Corp., $7,782,600 c/o Shorenstein Blackstone Group 792 Beacon St., Newton Prower LLC Academy RealtyIncLLC $6,900,000 for The Elderly WellesleyWay., North Andover JohnComm Hancock MA-Wellesley LLC,North Andover LLC $237,000,000 0William and 25St..Commerce 25 NAMLifeLLCInsurance Company One Clark Street Shem Creek North Andover LLC $7,600,000 $6,800,000 131 andSt., 141 Main St., and R.K. Foxboro LLC Foxborough KDM(Office) LLC LLC $6,350,000 23 East AVB Maple Leaf Apartments LP ASN Maple Leaf $9,950,000 USAFranklin and John Hancock Life and 176 Grove St., Franklin MV LLC The Realty Associates Fund VI LP People’s United Bank $7,275,000 $8,000,000 Chestnut St., Foxborough a/ka/ 10 Glassworks Ave., Cambridge Health Insurance Company 65 Bay St., Dorchester Spire 65 Bay Street LLC 65 Bay Street LLC Bank of America $7,100,000 $6,885,000 215 Beach St., Malden and Revere 167 West Main Street LLC Twin City Real Estate LLC Randolph Savings Bank $5,825,000 $4,368,000 853-857 Broadway GlenReit Apartments LLC LLC New BroadwayProject Glen Apartments LP Customers Bank $9,500,000 $7,600,000 269-287 Broadway Grove St., and Newton Hines Global Riverside Center MA-Riverside LLC $197,250,000 140-142 Station SpencerAve., Ave.,South Chelsea 451-467 Yarmouth Montrose Yarmouth Station LLC Station Crossing LLP HarborOne Bank $5,500,000 $6,200,000 continued on page 126 1 Athenaeum St. and 245 First St., Cambridge Jamestown Premier 245 First LLC MA-Riverview/245 First Street LLC Capital One $192,600,000 $96,300,000 2311 Mt.Arsenal Auburn St. and 5 and HRI Putnam Square LLC Putnam Square Apartments Co. LP Community Economic Development $9,285,000 $6,000,000 1445 Main St., Leicester Century Properties XXV LP TKC CVI LLC PeoplesBank $5,251,000 $4,700,000 St., Watertown Athena Arsenal LLC President and Fellows of Harvard College President and Fellows of Harvard College $168,500,000 11 Putnam Ave., Cambridge Association Corp.

1701 OsgoodSt.,St.,Boston North Andover Extra Space Properties Carey StorageIILLC MA LLC $4,990,000 99 Summer 99 Summer Street LLCTwo LLC GLB Summer $110,800,000 286 and 288 Chestnut Hill Ave., Brighton The Avenues Group LLC Chestnut/Highland LLC East Boston Savings Bank $9,000,000 $16,786,000 1730 and St., 1740 Lakeview Ave., and 24 and Christopher Dracut #1LLC, LLC c/o Pearlmark East Bank $4,925,000 $3,940,000 40 Broad Boston TCAM Core Alexandrou Property Fund Operating LP Linear ASLANRetail III Broad Street NewBoston York LifeSavings Insurance Co. $110,000,000 $50,000,000 117 Central St., Acton Dover Heights Apartments LLC Norwood Club Car Inc Mansfield Co-operative Bank $8,650,000 $7,897,500 25 Tennis Plaza Rd., Dracut continued on page 131 382-392 Harvard St., and Plumosa LLC Gail Lentini and Edith E. Sorrentino $8,380,000 Find the full list of office by logging in160 at Pleasant www.therearlreporter.com - under ARCHIVES $4,489,000 160 Pleasant St., Vicentes transactions Property LLC High Rock LLC Reinvestment Fund Inc. $2,332,000 15 Remington St.,Brockton Cambridge 160 Pleasant St., Brockton Vicentes PropertyLLC LLC High Rock 160 Pleasant Boston Community Loan Fund $4,489,000 $2,968,000 46 Irving St., Framingham POAH Ventures Tribune Associates LLC LLC Community Economic Development $7,800,000 $2,750,000 Assistance Corp.

1212 South Washington St., N. Attleborough 1212 South Washington Street LLC Triangle Realty LLC Bank of America $3,830,000 $3,840,000 The TransactionHeritage lists may viewed/dowloaded - Under ARCHIVES 46 Irving St., Entire Framingham POAH Ventures LLC be Tribune Associates LLC at: www.therealreporter.com Massachusetts Housing Investment $7,800,000 $5,265,000 567-569 Southbridge St., Auburn Mall Realty LLC Heritage Mass Associates Webster Five Cents Savings Bank Corp. $3,700,000 $2,775,000 40-46Boston Park St., Park Farlow LLC LLC Stephen 2004-C2 O’Brien Shrewsbury Retail LLC Crystal Clinton Lake Savings Bank $7,000,000 $5,200,000 476 Tpk.,Newton Shrewsbury BW-Warrenville CGCMT Bank & Trust Co. $3,500,000 $2,950,000 ATTENTION: violation of U.S. 6Linear copyright reproduce $6,600,000 or distribute Cleveland Place, 2, Boston It is a Cleveland North End LLC Cleveland LLC#1law Brookline Bank $5,280,000 110 Newbury St.,Lot Danvers Ann M. Vernet RetailPlace Danvers LLC to photocopy, East Boston Savings Bank $3,165,000 $2,623,750 75any andPutnam 89 Maynard Rd., 35 and publication Massachusetts State College Yupeng Ping Jiang, Hao Ming Shen, $6,600,000 10-34 St., Winthrop BCRZ LLC Michael Ji, M. Caruccio Trade Union Bank without first $3,100,000 $2,325,000 part of31,this (either inside or outside your First company) obtaining 37 Salem End Rd., and Building Authority and Weilie Wen 1430-1440 Commonwealth Ave., Brighton Thirty 2 Rutland Street LLC 1430 Commonwealth LLC $2,774,400 permission from The Real Reporter. We routinely monitor forwarding of the publication 1060 Worcester Rd., Framingham 725 Grafton St., Worcester Southwest ISM Holdings Inc Bank $2,600,000 $2,000,000 with email-tracking technology. on license options is available upon 31-33 Portsmouth St., Cambridge Redleaf LLCProperties LLC Information Arnold S. Fonseca andmulti-user Maria R. Fonseca United Century Bank & Trust Co. $5,800,000 $3,528,000 56 Plaistow Rd., Haverhill Jodom Realty LLC 56 Plaistow Road LLC Maria Papadopoulos $2,465,000 $1,765,000 275 Marlborough St.,E-mail: Boston 275 Hexagon LLC 275 LLC $5,607,500 request. subscriptions@therealreporter.com | 617-692-2997 429 Harvard St., Brookline Brookline GK LLC CRE JV Mixed Five MA 1 Cambridge Savings Bank $2,275,000 $1,500,000 continued on page 122 Branch Holdings LLC 625 McGrath Hwy., Somerville Somerville McGrath Associates LLP, 625 McGrath Highway LLC Santander Bank $2,250,000 $6,928,757 447 Station Ave., South Yarmouth Montrose Advance LLC Station Crossing II LLP HarborOne Bank $2,200,000 $6,200,000