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Mon, Dec 17
A Compendium of Property & Capital News
Dec 17
A Compendium of Property & Capital News

CBRE/NE Lands (Another) Cambridge Exclusive; $500M+ in City Sold/Listed Past Year

September 25, 2017 — By Joe Clements
1280 Massachusetts Ave.; Cambridge MA

CAMBRIDGE—CBRE/NE Capital Markets cannot seem to get out of mid-Cambridge these days, and that is likely fine by them, with market sources indicating the contingent has closed or landed their fourth listing along Massachusetts Avenue over the past 12 months, most recently negotiating a trade of 625 Massachusetts Ave. in August for a whopping $75 million. Completed in 1985 directly across from the gates of Harvard Yard, the latest exclusive of 1280 Massachusetts Ave. could yield owner Boston Residential Group over $40 million if industry estimates prove correct.

“That is a fantastic location,” declares one CRE professional familiar with the five-story, brick-clad building which encompasses 43,125 sf of first-class office and retail space 100 percent filled by a half-dozen tenants. Calls were not returned by press deadline to CBRE/NE principals David J. Pergola and Brian R. Doherty, leaders of the Capital Markets operation, but a launch of 1280 Massachusetts Ave. could occur as early as today by some accounts.

Those spoken to maintain $40 million or more is attainable due to the asset’s “supreme” position right where Harvard Square commences, as well as having durable in-place cash flow and “significant future appreciation potential” from a submarket where both office and retail have minuscule vacancy levels. The Q3 office market report from Perry Brokerage Associates shows a scant 1.9 percent vacancy for mid-Cambridge office buildings, and the inventory only encompasses 1.24 million sf. “It is super-tight” in the submarket, acknowledges one observer, with PBA tracking 11.1 million sf across the city, that assemblage at 8.4 percent vacancy.

Average rents of $63.94 per sf in mid-Cambridge approach record regional levels found in abutting Kendall Square, pegged by Transwestern Consulting Group at $78.06, and vaults past the Back Bay figure of $62.61 per sf. There is also a secret weapon of sorts in the form of 32 parking spaces at 1280 Massachusetts Ave., an element one observer says offers “a rare competitive advantage” for attracting and retaining tenants. Tenants unaccommodated by the parking have a plethora of transit options available, with multiple bus lines coursing along Massachusetts Avenue and complemented by the MBTA Red Line station a quick walk into Harvard Square.

Speaking of coursing down Massachusetts Avenue, the CBRE/NE Capital Markets team has already racked up a trio of Cambridge sales outcomes there dating back to 1050 Massachusetts Ave. trading in September 2016 for $46 million, then 1100 Massachusetts Ave. fetched $35 million to open this year and soon after that, the group which includes First VP Bruce Lusa and Client Services Coordinator Sara Forino was retained to market 625 Massachusetts Ave.

On a per-sf basis, 1280 Massachusetts Ave. stands to outpace the other Massachusetts Avenue trades, with a $40 million rate averaging $927 per sf. The price was $614 to secure 625 Massachusetts Ave., $700 for 1050 Massachusetts Ave. and $735 per sf was needed to reel in 1100 Massachusetts Ave., that asset acquired by Bentall Kennedy. Lincoln Property Co. partnered with Chilean capital to buy 625 Massachusetts Ave. while L&B Realty Advisors took down 1050 Massachusetts Ave. The inventory for those three assets plus 1280 Massachusetts Ave. account for over 20 percent of the office supply in mid-Cambridge.

All three prior deals were first unveiled by Real Reporter.

CBRE/NE is hardly dallying on Massachusetts Avenue, however, its breadth evidenced in the highly publicized designation earlier this month as agents for a pair of Harvard Square mixed-use buildings on Brattle Street, that campaign being conducted on behalf of a family trust expected to exceed $100 million, according to a report on the matter in Real Estate Alert.

The CBRE/NE Capital Markets efforts also extend out to west Cambridge this year, manifested by the $210 million purchase of two office buildings at 125 and 150 CambridgePark Dr. by a partnership of Morgan Stanley and Longfellow Real Estate Partners. All told, the current Cambridge assignments coupled with those already concluded would deliver clients over a half-billion dollars collectively. “That city is white hot right now,” a broker says of the community dominated by Kendall Square but also thriving in mid-Cambridge and to the western flank known as Alewife. CBRE/NE has brought on a new professional, Matt Curtin, to work on 1280 Massachusetts Ave., the Brattle Street listing and future assignments.

Boston Residential Group is a family-owned company headed by President and CEO Curtis R. Kemeny, the firm most recently featured in Real Reporter going through CBRE/NE’s multifamily team of Simon J. Butler and Biria St. John to sell a large apartment complex in Boston’s Jamaica Plain neighborhood, that exercise bringing $103 million for the 196-unit project. It was sold to Bell Partners. Developed by the family’s Niles Associates Inc. led by John Niles and Thomas H. Niles, 1280 Massachusetts Ave. is held under a ground lease, but some observers say there is talk of restructuring that aspect, details of which were not immediately available.

All told, Boston Residential Group manages and owns over 3,000 apartments and condominiums, its holdings totaling above $1 billion in value.

Brian Doherty David Pergola Bruce Lusa Sara Forino