Eastdil-Listed Hub Tower Being Sold by Cornerstone to Rockpoint Group

BOSTON—An iconic Downtown Crossing office tower approaching three decades in use appears to be getting better with age, or so it would seem if reports bear out indicating 99 Summer St. is under agreement to Rockpoint Group for a figure said to eclipse $131 million. Known for its distinctive red roof and a grand five-story atrium lobby, the 20-story, 272,600-sf building is being sold through Eastdil Secured on behalf of Cornerstone Real Estate Advisers, owners since paying $110.8 million in Aug. 2013.

“They do have that,” one industry source acknowledges regarding Rockpoint Group, a homegrown firm that is quite familiar with the Summer Street corridor that extends across Fort Point Channel through the thriving Seaport. There, Rockpoint and Beal Cos.—using the same Eastdil Capital Markets team—harvested 451 D St. at a consideration of $115 million in spring 2012, that 461,000-sf structure located one building off Summer Street and across from the Boston Convention Center. Recast as Seaport Center, the nine-story building had been purchased by Beal/Rockpoint for a mere $41 million in spring 2006.

In keeping with the Summer Street penchant, Rockpoint has a hotel it is buying next to the convention center being listed separately through Eastdil, a deal previously detailed by Real Reporter and estimated to be trading in the vicinity of $157 million to $159 million. The Renaissance Boston Waterfront Hotel at 606 Congress St. has 450 rooms and 21 suites.

As per its standard policy, the Eastdil response to 99 Summer St. reports has been muted, with phone calls unreturned as of press deadline. That was the same reaction to Rockpoint’s pending purchase of the Seaport hotel which some predict will be completed by year’s end, a timetable 99 Summer St. could also achieve should due diligence proceed minus any roadblocks. The Eastdil Boston Capital Markets team consists of Brian Barnett, Peter Joseph, Sarah Lagosh, James McCaffrey, Molly Padien-Havens and Steffan Panzone.

Eastdil certainly has had a lot to keep mum about of late, particularly relating to the urban core where this week Oxford Properties closed on its blockbuster $1.3 million purchase of 222 Berkeley St. and 500 Boylston St. in the Back Bay, an Eastdil exclusive that could prove the largest of its ilk for 2016. The firm is also in the thick of Blackstone Real Estate’s monumental purchase of BioMed and the REIT’s portfolio that has a large concentration of space in metropolitan Boston.

Eastdil was identified in another Real Reporter exclusive on Oct. 8th in which 101 Merrimac St. was revealed to be under agreement at a price in the $80 million to $82 million sphere. As that story outlined, longtime owner H.N. Gorin Inc. will retain a minor stake while ceding the remainder to Artemis Real Estate. Sources maintain that process could be finished before the stroke of 2016.

Eastdil is also familiar with 99 Summer St., having negotiated the Cornerstone purchase barely two years ago when the brokerage house was advising then-owner Normandy Real Estate Partners. For a property that struggled during its first decade as an unproven location for office space and coming on line mere months before the October 1987 stock market crash that sent Boston’s economy into a tailspin, 99 Summer St.’s ability to sell in the high $480-per-sf range almost three decades later is “remarkable,” reflects one industry veteran who recalls the tower’s earlier challenges, one of them being many floor plates smaller than that required for large users.

Instead, 99 Summer St. found a niche serving small- and mid-sized tenants such as attorneys and other professional services firms, and the arrival of neighboring structures such as One Lincoln St. plus having the Rose Fitzgerald Kennedy Greenway crop up right outside its doors have helped the asset’s stature, observers spoken to explain. When Cornerstone acquired the building, it was at 93 percent occupancy even as Downtown Crossing was still suffering from the stalled Filene’s redevelopment project across the street which had forged a desultory comparison to war-torn Beirut.

Suddenly, that project is about to bring a landmark mixed-use tower featuring ultra-expensive condominiums to Downtown Crossing, and an overall pattern of disinvestment and despair for the area has seemingly ebbed, partly by implementation of a new Business Improvement District emphasizing cleanliness and security.

One barometer showing just how far 99 Summer St. has come would be looking back to July 2003 when a partnership of Carlyle and Paradigm Properties sold it to Normandy’s predecessor for $68.2 million. With pricing estimates ranging from $131 million to $133 million, the pending sale would be almost double what it went for a dozen years prior.

Based in Boston, Rockpoint Group’s reach does extend beyond Summer Street, all the way out to the west coast in fact where the firm has participated in several successful repositionings. Armed with a deep capital reserve, Rockpoint this spring paid $150 million for a San Diego office property even as the firm seeks opportunities in its home turf. “They are very diverse,” notes one market watcher familiar with the company whose founders are Keith B. Gelb and William H. Walton, with other managing members including Thomas F. Gilbane and Aric M. Shalev.

Cornerstone is another New England product, and the CRE investment arm of Massachusetts Mutual Insurance Co. based in Hartford also possesses a long history in metropolitan Boston, perhaps most notably its backing of the Fallon Cos. transformational Fan Pier development on Boston Harbor featuring a mix of office and residential space.