Log in Subscribe Front Page Current Issue Real Briefs Recent Trades Subscribe/Renew Events Advertise Contact Us
Thu, Mar 28
A Compendium of Property & Capital News
Thu
Mar 28

Prudential to Pay NBF Near $145M for 217 Luxury Hub Apartments in HFF Exclusive Listing

November 07, 2017 — By Joe Clements
One Greenway Apartments, Boston MA

BOSTON—New Boston Fund is said to be reaping a big reward for its acclaimed development of Parcel 24 along the Rose Fitzgerald Kennedy Greenway into 362 units of housing, with industry sources telling Real Reporter 217 luxury units in a 21-story tower are being sold to Pru affiliate PGIM Real Estate via HFF via a deal expected to yield upwards of $145 million. The result, if so, would equate to an eye-popping $668,000 per unit for One Greenway, and the capitalization rate will be a taut “sub-4 percent,” according to one CRE watcher.

“Investors were aggressive . . . they really wanted it badly,” that CRE professional offers regarding the North Building for which PGIM Real Estate has signed a non-refundable deposit and could close on the asset before Thanksgiving, sources maintain. “It is moving right along,” concurs one CRE professional tracking negotiations who deems the rapid process and pedigree of the victorious suitor indications of a spirited response from an institutional set hanging over the metropolitan Boston apartment realm in hopes of landing modern, core opportunities which One Greenway is considered a prime example.

“It is one of the better buildings out there right now,” says another industry expert who calls the robust reaction “no surprise” considering the asset “checks all the boxes” Tier One capital groups are seeking and now find Boston a fertile landscape thanks to the arrival of numerous upscale projects downtown similar to NBF’s product at Hudson and Kneeland Streets. Those arrivals have resulted in a series of nine-figure exchanges this decade, with One Greenway on the verge of joining that lofty list.

Parties involved are keeping mum on the matter, including HFF Capital Markets team members who did not respond to inquiries as of press deadline. The marketing of One Greenway is being led by Managing Director Christopher Phaneuf and Senior Director Mark Campbell representing NBF and procuring PGIM following the marketing campaign launched over the summer.

One Greenway broke ground in 2013 after gaining community support thanks to a public/private partnership with city and state officials plus backing from residents of Chinatown enticed by 145 units of affordable housing. That part is located in a 10-story mid-rise known as the South Building set apart from the luxury piece. At 40 percent of the One Greenway inventory—far above normal city mandates for affordability—those units are not included in the PGIM purchase, and 50 were set aside to be sold as affordable condominiums to promote home ownership.

A partner in One Greenway is the Asian Community Development Corp. which supported NBF’s concept as a way of knitting back the area following depression of the Interstate 93 viaduct replaced by the Rose Fitzgerald Kennedy Greenway where One Greenway at 66 Hudson St. frames the gateway at the southern flank of that linear park. Asian CDC had lobbied state transportation officials to turn the 65,000-sf Parcel 24 back to the community, having been taken over by the agency during urban renewal in the 1960s, with NBF’s plan delivering 415,000 sf of mixed-use space.

Of that, the South Building has 3,350 sf of ground floor commercial space, 135 underground parking spaces including 50 public stalls and One Greenway features 13,275 sf of landscaped open space connecting pedestrians between Hudson and Kneeland Streets.

A leading provider of CRE and capital markets services across the US from its 22 offices, Boston-based HFF has almost as long a history at One Greenway as NBF and Asian CDC, with debt team members Riaz Cassum and Porter Terry arranging $114.7 million of construction and equity funding to finance the project. Phaneuf and Campbell are members of the group’s multifamily sales team. If consummated, One Greenway’s trade would be their second nine-figure outcome of 2017, having already peddled a major apartment complex in southern New Hampshire that brought $100 million.

NBF in 2018 will celebrate a quarter-century as a private investment and management firm, one now bearing a national platform weighted on the Eastern Seaboard. The firm whose leadership includes President Timothy J. Medlock and Chief Investment Officer James P. Kelleher has a lengthy resume of residential development reflective of NBF’s predecessor, the Rappaport Cos., its signature feat Charles River Park, the sprawling assemblage of high-rise dwelling that inspired the “If You Lived Here” signs along Storrow Drive. Besides 23 million sf of commercial development, NBF has created or invested in more than 7,500 units of housing under its operation that has fully staffed offices in Boston, Washington DC, and Fort Lauderdale, FL.

Known as Prudential Real Estate Investors until last year, PGIM Real Estate is one of eight autonomous asset management businesses established by Prudential to focus on a particular class and give investors “diversified solutions with a global perspective,” other units including PGIM Real Estate Finance, PGIM Fixed Income, and PGIM Global Partners. Established in 1970, PGIM Real Estate has $67.3 billion of assets under management.

Mark Campbell Christopher Phaneuf James Kelleher Timothy Medlock