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A Compendium of Property & Capital News
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Apr 22
A Compendium of Property & Capital News

Related Beal Ties Up 451 D St, (Again); Eastdil Listing Could Hit $260M

March 19, 2018 — By Joe Clements
Seaport Center 451 D Street, Boston MA

BOSTON—Investors cannot seem to get enough of Seaport Center—especially Related Beal—or so it would seem amidst industry rumors claiming that CRE powerhouse is about to acquire the 477,000-sf Class B office building for the second time in a dozen years through exclusive agent Eastdil Secured, predecessor Beal Cos. having cashed out in May 2012 to Shorenstein Properties for $115 million. Shorenstein quickly traded it in Nov. 2014 for $169.5 million to the current owners, a joint venture led by GE Asset Management and including Commonwealth Ventures and Meritage Properties.

“It is Related,” insists one CRE veteran tracking the latest negotiations, although calls to Eastdil’s Boston office which is led by Managing Directors Sarah Lagosh and James McCaffrey were not returned by press deadline. Nonetheless, multiple sources indicate Related Beal is the group tabbed to acquire the building which Beal Cos. bought in a joint venture with Rockpoint Group for a “mere” $40.5 million in late April 2006. The JV then set about revitalizing the hulking structure which today hosts a number of important tenants including JPMorgan Chase, a longtime Boston tenant which was on the verge of leaving town when reeled in with a job-saving agreement that the financial services giant just recently renewed.

The Boston Herald is a denizen there as well, its longtime home in the South End having been converted to a vast mixed-use complex. That same gentrifcation of an infill Boston neighborhood is another reason on top of the stabilization of 451 D St. that investors were apparently clawing over each other to grab an asset at a price over six times what Beal and Rockpoint spent their first go-round, and more than double what they traded it for six years ago this spring. “It was an absolute feeding frenzy,” says one source familiar with the latest talks. An interesting element is in the Boston Herald having been sold recently, raising the prospect its space could free up either as sublease or direct. That might seem an unsettling matter to investors anywhere except Boston Seaport here and now where the escalating rents could mean munificent returns from current rates which are said to be below market already.

It has already been an eventful season for the Eastdil Capital Markets team that also just closed on downtown office building 40 Court St. to EXAN Capital, clients Lincoln Property Co. and Stars Investments the beneficiaries there of a $54 million deal featured in the latest Real Reporter and initially unveiled in mid-February. Separately, Eastdil is in late-stage talks to trade the 28 State St. office tower in downtown Boston to Heitman for a whopping $430 million, well above the $343 million its clients spent just a few years prior.

The 40-story, 572,000-sf building dates to 1968, constructed as one of downtown’s first skyscrapers. Real Reporter first unveiled that agreement earlier this month.

Other members of the Eastdil Boston Capital Markets team working on the two high-profile exclusives and 40 Court St. are Brent Luster, James Nugent, Adam Sawyer and Lou Tejada.

James McCaffrey Sarah Lagosh