Two Big Blackstone Deals; The Deal Sheet

Blackstone is striking while the iron's hot and beginning to sell off its Class-A, Boston-area office properties purchased during the last peak, like Center Plaza downtown, which Shorenstein has agreed to buy for at least $300M. And it's a sign of even better things to come.

These deals signal exceptional real estate fundamentals and the most active Q4 in recent memory, says Cushman & Wakefield vice chairman Edward Maher, whose team repped Blackstone on the Center Plaza deal. Though he couldn't comment on the deal, he says that sales that close before year's end will get strong prices at agressive cap rates. And it's no wonder: Greater Boston's real estate fundamentals are "off the charts," Edward says, so investors like San Francisco-based Shorenstein (which already owns 399 Boylston and Seaport Center) are vying for assets like Center Plaza, above. The regional economy is strong and diversified; there are single-digit vacancy rates in the best submarkets of Back Bay, Seaport, and Cambridge; and there's no new spec office construction. Next year will be even more fevered with strong investor demand and a rising number of assets coming on the market.

In another major deal, Manulife has agreed to buy Blackstone's suburban Wellesley Office Park for nearly $240M. HFF, which is handling the sale of the eight-building, 649k SF complex, declined to comment. But other industry sources say this is likely to be the largest suburban sale of the year. It's also the first time the asset, long considered the best in the 'burbs, has been sold since Norman Leventhal built it more than 50 years ago. Of course, the companies owning the complex have changed hands. The park is 90% leased with rents starting at mid-$40/SF.

SALES

Norges Bank Investment Management, among the world's largest sovereign wealth funds, has agreed to pay Beacon Capital Partners an undisclosed price for its 50% share of One Financial Center. In September '07, Beacon paid $390M for its interest in the Financial District property. Norges, which has a $760B fund, will be partners with MetLife in the 1983 building. The Norwegian heavyweight also has a stake in 33 Arch St on the other side of the Financial District with TIAA-CREF.

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TIAA-CREF won the intense bidding to buy 51 Sleeper St in Fort Point from Divco West, which picked it up a year ago for $48.2M. Those in the know estimate the latest sale price at nearly $60M for the 150k SF building, on which TIAA-CREF may close on this month.

LEASING

Cynosure is expanding and renewing its lease with Normandy Real Estate Partners at the Westford Corporate Center in Westford. The developer and manufacturer of light-based medical treatment systems will occupy a total of 145k SF in the 165k SF center. Cushman & Wakefield's Richard Ruggiero and Torin Taylor repped Normandy, while C&W's Mike Frisoli repped Cynosure.

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Two tenants have signed leases for a total of 14k SF with Campanelli at Heritage Landing in North Quincy. Consolidating offices in Braintree and Boston, PharmaLogics Recruiting leased 8,500 SF. In a relo from Quincy Center, Magellan Jets took 5,000 SF. Cushman & Wakefield's Mike Frisoli, Matt Morgan, Dave Martel and Jason Roth repped the landlord.

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Peak Physical Therapy & Wellness leased 3,000 SF at 2300 Crown Colony Dr in Quincy. Landlord Commonwealth REIT owns the building and the Crown Colony Office Park where it's located. Cushman & Wakefield's Stephen Woelfel and Mike Frisoli repped the tenant, and Cassidy Turley's Kate McGovern and Sean Teague repped the REIT .

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Tufts Health Plan leased 4,000 SF at 1 Mercantile St in downtown Worcester, in a relo and expansion from 2,900 SF on the outskirts of town at 102 Shore Dr.

CONSTRUCTION & DEVELOPMENT

The Malden Housing Authority will renovate and improve buildings and units in several multifamily properties to cut energy and water consumption using an $11.3M tax-exempt bond received from MassDevelopment. The bond, the first MassDevelopment has issued to a public housing authority, was purchased by East Boston Savings Bank. Siemens Industry will manage the energy conservation renovation work and guarantee that it meets HUD specs.

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The Groton School, a five-year coed prep school in (of all places) Groton, will do a $48M renovation of its iconic 1899 schoolhouse building using the proceeds from a $75M tax-exempt bond issued by MassDevelopment. The bond issue will fund: $10M of the $48M Schoolhouse renovation; provide $15M in temporary bridge financing for the renovation; and support better terms for the financing of existing bond issuances.

ASSIGNMENTS

Boston Real Estate Advisers is marketing 130-150 A St in Needham for Maric, which bought it in '11 for $3.3M from Normandy Real Estate Partners. In this western suburban market, vacancies fell to 12.1% in Q2 and rents are rose 7.2% compared to Q1.

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Colliers is marketing 1900 Crown Colony in Quincy for Arbella Insurance Co.

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Skanska won a contract with Harvard Business School to build the $57M, 87k SF Ruth Mulan Chu Chao Center on the Allston side of its campus where Kesge Hall now stands. Construction of the educational facility, targeting LEED Gold, is slated to start in March and be completed in May '16.

LEASING

UMass has agreed to lease 27k SF for a new satellite campus in Springfield at 1500 Main St in the 550k SF Tower Square building owned by Mass Mutual Insurance. The university optioned another 1,600 SF of ground floor retail space in the building. The satellite location is expected to open next year and UMass Amherst, located about 25 miles away, will be the lead user of the facility.

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Tufts University School of Engineering has leased 9,700 SF of build-to-suit lab space at 200 Boston Ave in Medford from Cummings Properties. Tufts is expanding from 6,000 SF on the ground floor of the Boston Avenue building. Cummings' leasing officer Tony Spencer handled the deal for the landlord.