Synergy Buys Quincy’s 200 Newport Ave.; Cushman & Wakefield Brokers $25M for ING

QUINCY, MA—Synergy Investment & Development has brought new meaning to the term Red Lining.

Already in control of several assets along the MBTA’s Red Line subway, the Boston-based investor has closed on 200 Newport Ave., an eight-story, 145,000-sf office building fully leased to State Street Bank Corp. Marketed by Cushman & Wakefield, the first-class structure purchased from ING/Clarion for $25 million is mere steps from the Red Line’s North Quincy station, and one stop from the JFK/UMass depot in Dorchester where Greaney’s firm owns a bustling retail plaza. Properties at 27 School St. and 141 Tremont St. are adjacent to the Park Street stop at Boston Common, South Station serves two buildings Synergy acquired last year on Summer Street; and the firm also owns 10 Fawcett St. in West Cambridge where the Red Line begins along Fresh Pond Parkway.

Synergy President David Greaney acknowledges the pattern, but explains his firm’s urban-centric platform is the catalyst versus those of the subway stations. “We do not have a Red Line strategy, but that is where we are geographically focused,” says Greaney, with the rouge route just happening to be the common transit link. North Quincy is so close to the Hub that the investment is in concert with Synergy’s urban target, explains Greaney. Still, minus the Red Line, the submarket would be a much more difficult sell to the likes of State Street, which has been dispatching back-office operations there since the mid-1980s while retaining its headquarters in Boston—directly across from South Station. The solution was clearly dependent on the Red Line, and Greaney concurs the transit stop makes his firm’s newest holding especially valuable. “It’s a clear benefit,” he says, as is a structured parking garage for occupants traversing the Southeast Expressway to 200 Newport Ave. where State Street has been since the building’s construction in 1984.

Synergy has made its mark revitalizing underperforming buildings via capital upgrades and an aggressive deal-making attitude that has occupancy at 95 percent across a portfolio now encompassing one million sf. The 200 Newport Ave. addition requires virtually no action leasing-wise thanks to a long-term deal in place with State Street, and regular capital improvements mean a property delivered minus physical issues. “It shows we have an appetite for assets all over the real estate spectrum,” says Greaney of the stabilized purchase. “It’s a nice complement to our portfolio.” Principal Financial Group provided debt for the acquisition with a $13.0 million mortgage.

Ardor for 200 Newport Ave. was so intense that Cushman & Wakefield received interest from overseas, relays brokers at the firm’s Capital Markets Group. “It was a dogfight,” relays C&W Executive VP Edward C.Maher Jr., who handled the assignment on a team including Executive Director David J. Pergola, Christopher Griffin and Brian Doherty. “There were a couple of (bidders) shoulder-to-shoulder at the end,” recounts Pergola, who cites favorable contingencies for helping Synergy emerge as winning suitor. A proven ability of the buyer to follow through on CRE commitments was of further comfort in the selection, adds Pergola, whose firm last year negotiated Synergy’s acquisition of 253 Summer St. in Boston, a protracted process that Greaney’s group patiently endured. “They have a really strong track record,” says Pergola.

C&W and Greaney declined to discuss specifics of the transaction. State Street supposedly has a lease in place for another decade at the building ING acquired in Dec. 2006 for $17.5 million. Maher did say the top-rated tenant being there was a big reason for reaping $173 per sf on behalf of the seller. “All in all, it was a good deal for everyone,” he says. Greaney expressed as much, praising C&W and ING for “a cooperative” negotiation and conclusion. The commitment by Synergy was first detailed by The Real Reporter in its April 18th publication.