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Colliers Listing Wellesley Place; Diverse Rt. 9 Project Could Bring $28M

June 05, 2017 — By Joe Clements
987 Worcester Street, Wellesley MA

WELLESLEY—Route 9 office/retail hybrid Wellesley Place stumbled earlier this decade when the overleveraged 25,000-sf building was pushed into foreclosure, but repositioning by a regional investor after its $7.1 million auction purchase in 2014 has steadied the two-story asset enough some market observers calculate 978 Worcester St. could deliver upwards of $28 million via a fresh Colliers International

sales listing being launched as early as today. “We are coming out with that,” Colliers Capital Markets principal Douglas Jacoby acknowledges to Real Reporter, the team including principal Scott Dragos and their crew, as well as the multifamily contingent led by Senior VP Christopher Sower. The reason for the latter group’s participation also helps explain what could be a three-fold increase in value from a trade should market predictions bear out, i.e. the client’s construction of 36 first-class apartments on surplus land behind the office/retail property, residential units nearing full lease-up whose long-range fate could be condominium conversion, the brokerage firm suggests.

“There are a lot of moving pieces that add up to a very nice package we think will get good strong interest,” Jacoby says while declining to discuss the pricing range predicted among market watchers or just what ultimate future might be in store for the apartment structure. Wellesley’s residential market is bereft of both apartments and condo units, so much so Colliers reports the town’s average sale price this year of new condos completed 2015 or later is $1.65 million. On the rental realm, Wellesley Place achieves from $1,850 to $3,200 for one-bedroom units and between $2,600 and $3,500 for two-bed-room formats. “It’s Wellesley,” Jacoby says. “It doesn’t get any better in the suburbs.”

Indeed, Colliers relays the average household income in 2015 for Wellesley residents was $167,996, highest in Massachusetts. And the current population of 27,982 people in 2016 is expected to grow another 3.8 percent by 2021 when it is projected to surpass 29,000. Its developers designed the apartments to be of “condominium quality,” according to Jacoby who points to white Corian counter-tops, stainless steel appliances and in-unit washer/dryer combinations among the prime features. Units range from 760 to 1,580 sf and are framed by ceilings to 10 feet high, walk-in closets and private decks.!

The 100-percent leased office/retail building contributes to Wellesley Place’s improved worth, Jacoby further outlines, with Newton Wellesley Hospi-tal leasing 19,100 sf into 2026, a deal struck last spring. A wound care clinic is another medical denizen signed up at the building where 92 percent of the office space is leased to 2026, with the remainder committed to 2020. The anchor tenant is a subsidiary of the massive Partners Healthcare network.

For retail investors, Jacoby says Dunkin’ Donuts enjoys being on the right side of commuting patterns along the divided highway, its eastbound location making the coffee emporium an overachieving unit driven by workers heading towards downtown Bos-ton and Cambridge roughly a half-hour away upon departing the drive-through window. The average daily traffic volume recorded in one study showed the eastbound side for Route 9 Wellesley to be 53,101 versus 49,650 westbound.

Described as “a stabilized turn-key asset” situated in one of suburban Boston’s most exclusive communities, Wellesley Place is being made avail-able as the entire package and also on an individual basis. “I think we will get attention on both (scenarios),” Jacoby says, agreeing that the buildings accommodate entirely different food groups but maintaining that investors are increasingly comfortable with operation of a multi-tiered asset due to the advent of Live/Work/Play patterns and opportunities.

“The timing is right,” he says. Besides Jacoby and Dragos, Capital Markets team members on the case are Assistant VPs Anthony Hayes and Timothy Mulhall and Associate Daniel Hines. The multifamily division includes Assistant VP Jennifer Price and Client Services Specialist Maggie Collins. Debt and structured finance guidance is being provided by Co-Chairman Kevin Phelan and Executive VP Jeff Black, while Senior VP John Carroll is available to diagnose the suburban medical office market which Colliers notes is also becoming a popular product type for investors and tenants alike.!

The clients for Colliers have seemingly fared well with their vision for 978 Worcester St. North An-dover-based Wellesley Place LLC bought the 2.2-acre property in the auction generated following its foreclosure. The 42,000-sf apartment structure came on line in 2016. Michael F. Carr and Louis P. Minicucci iJr. are the managers of Wellesley Place LLC. Their $7.1 million purchase price and upgrades to the property were funded with $12.4 million from Middlesex Savings Bank.

Christopher Sower Douglas Jacoby Scott Dragos

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