LA Co. Wins Motor Mart Garage Fight; C&W Exclusive Could Top $160MJune 27, 2016
BOSTON–If you think paying for Boston parking is expensive, try buying the garage itself. According to sources, an investment group out of Los Angeles has been tabbed winning bidder in a fast-paced competition led by Cushman & Wakefield for the 1,037-space Motor Mart Garage, an exchange expected to eclipse $160 million. Sources are telling therealreporter.com that Los Angeles-based CIM Group has outdueled a spirited roster of prospects vying for the nine-story, 420,000-sf structure which is perched in Boston’s Back Bay and being harvested for longtime owner Park Square Realty.
“They did get that deal,” acknowledges one CRE veteran familiar with the victor of a building dating to the 1920s that was meticulously restored in 1999, an overhaul which upgraded the retail component today headlined by three popular restaurants, Legal Seafoods, Flemings Prime Steak House and Maggiano’s Little Italy. Bifurcated, predictable income was among the elements C&W promoted in an April 21st article at therealreporter.com confirming the firm’s exclusive.
Joseph declined comment on industry rumors regarding CIM or the status of negotiations, but tells therealreporter.com that bidding was fast and furious. “It was a quick process,” he says, and one that attracted upwards of 20 “very well-qualified bidders” who pursued the opportunity with vigor. “There was an absolutely tremendous reponse based on the long-term location of the property and the incredible cash flow it throws off from the parking and the retail,” Joseph explains of an assignment he is leading along with Brian Barnett and Steffen Panzone, the three arriving in April to kickstart the C&W Capital Markets team in metropolitan Boston.
CIM Group will apparently be adding to an existing garage portfolio concentrated on the West Coast, but also with assets in Florida, New York and Ohio. The firm which is involved in more traditional CRE lines such as hotel, industrial and office space has a variety of garages in the mix, from single-use facilities and surface spaces to large mixed-use operations similar to Motor Mart. It appears the Boston target would have the most stalls of any garage in CIM’s existing lineup, with the investor’s 1,100-space Anaheim asset including 279 surface slots.
In the April article, Joseph did predict Motor Mart would draw from outside the region, citing other attributes touted by C&W including the building’s unique design that provides for greater efficiencies and ease of use. That would seemingly appeal to a knowledgeable investor such as CIM which appears to understand the genre in owning a garage portfolio numbered in the thousands of stalls, including two on Flower Street in downtown Los Angeles. One market watcher spoken to maintains the firm is purchasing 201 Stuart St. for an infrastructure fund it operates.
According to CIM informational materials, the infrastructure instrument also invests in energy related assets, plus other areas including transportation, waste management and water processing plants. The garage platform is run under its Urban Parking Joint Venture that has teamed with Laz Parking to run the facilities. The program “seeks to improve operating performance of these assets, primarily in markets where supply/demand dynamics are becoming more attractive, rhrough professional management and automation,” CIM outlines.
In launching Motor Mart, C&W had pointed out other aspects such as the city’s longstanding parking freeze on new spaces as one anticipated attraction, plus drawing from a variety of parking consumers including the nearby Theater District, Boston Common and the massive Park Plaza Hotel located across the street, as well as having three thoroughfares converge outside the garage. Joseph says many bidders seemed intrigued by the building’s can’t miss location. “The worst-case scenario is you continue to throw off that enormous cash flow, but it was looked at by many for its long-term development potential,” he says. “That definitely got noticed.”
CIM already is familiar with the Hub, having paid $43 million earlier this year for 95 Berkeley St. in the South End, that 114,000-sf building longtime home of its former owner The Community Builders. As therealreporter.com first unveiled last summer, the structure was acquired in partnership with Center Court Properties, a Gotham-based firm whose principals are David Rubin and Matthew Snyder.