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Jul 12

UBS Trading Exchange Pl. for $850M+ to Allianz, Beacon Via Newmark

August 29, 2018 — By Joe Clements
53 State Street, Boston MA

BOSTON—Four years after harvesting One Beacon St. for $561 million, Beacon Capital Partners and German insurer Allianz are purchasing another prominent Hub office tower in a joint venture partnership targeting Exchange Place at pricing expected to crest $850 million. Put up for sale this spring by owner UBS Investments through Newmark, the 40-story building whose tenants include the Boston Globe has 1.13 million sf of first-class space framed by a gleaming blue-glass facade located at the epicenter of Boston’s Financial District.

“That is good information,” one CRE professional tells Real Reporter regarding industry buzz that the fast-moving process has concluded its best-and-final phase with Allianz and homegrown BCP perched on top of the heap. The source also agrees negotiations have commenced to trade an asset UBS has held since paying $600 million in December 2011, that investment first detailed by Real Reporter.

BCP has a policy against discussing CRE transactions prior to closing while calls to Newmark’s Capital Markets group were not returned as of press deadline. Nonetheless, multiple CRE professionals peg Allianz and Beacon as the successful suitors for an opportunity that reportedly drew contenders from around the world, mimicking a similar mania when Exchange Place last changed hands, an era far darker than the climate today where the Central Business District has rebounded impressively from the 2008 recession that had landlords reeling well into the 2010s.

According to Lincoln Property Co., the Financial District vacancy rate over the past 10 years was never higher than the 12.0 percent registered the year UBS bought into 53 State St. One glimmer of hope did come when asking rents trended up slightly in 2011 after reaching a nadir the prior season at $43 per sf.

Since then, Boston’s Class A asking rent has climbed steadily to a current record of $66.30 per sf. Exchange Place survived the loss of a major tenant through a lease-up initiative paced by Cushman & Wakefield whose victories included landing the Boston Globe, the daily publication now in 75,000 sf after selling its famous headquarters in Dorchester. Its 10-year pact that began last June was first unveiled by Real Reporter.

The Newmark Capital Markets team listing Exchange Place is led by Robert E. Griffin Jr., Edward C. Maher Jr. and Matthew E. Pullen, with other team members including James M. Tribble and Samantha N. Hallowell. According to one observer tracking the process, “people were crawling over each other” to secure the building which dates to 1983. “It was hotly contested,” says that source who agrees with other estimates anticipating a deal over $850 million. That woud equate to a minimum of $747 per sf if accurate.

Those spoken to maintain a purchase-and-sales agreement is being hammered out but could not say whether it has been signed by both parties. A closing date is also uncertain.

Founded 20 years ago, BCP has a national CRE footprint that does include a substantial regional portfolio. The company based at 200 State St. and Allianz are credited with stabilizing One Beacon St. during their tenure which ended with the summer 2014 sale to MetLife Inc. and Swedish bank Norges.

Matthew E. Pullen Edward C. Maher Robert E. Griffin James M. Tribble Samantha M. Howell