Water Tower Hill, Vermont Calls Out to Legacy Real Estate Ventures

COLCHESTER, VT — Its heart remains in Boston, but Legacy Real Estate Ventures is showing a willingness to expand beyond the Hub for commercial real estate when deemed prudent. Following up on last year’s acquisition of a Rhode Island building, Legacy has reportedly tied up a 25,000- sf property here at the well-regarded Office Park at Water Tower Hill, a 12- building, 400,000-sf complex whose development team includes another Massachusetts player, the Winn Cos.

“It’s not a large market, but it’s a strong one,” Jones Lang LaSalle Managing Director Scott J. Jamieson says of Greater Burlington and placing Water Tower Hill at the top of the heap, rivaling rents in suburban Boston’s leading enclaves. JLL is quite familiar with the park, having negotiated the purchase
several years ago of three buildings there on behalf of a client the firm is now peddling the assets for, with Legacy said to have committed to 302 Mountain View Dr. JLL’s team of Jamieson, Managing Director Michael G. Smith and Associate Brandon M. Dickason is also marketing 354 and 356 Mountain View Dr.

Citing confidentiality agreements, Jamieson would not say whether Legacyhas committed to 302 Mountain View Dr., while Legacy President Michael
Price invoked the same restriction in declining comment. But sources insist a deal has been struck by his Waltham, MA-based company, and claim Legacy is in its duediligence process presently, an exercise that observers maintain is unlikely to deliver any stumbling blocks that would forestall an anticipated
closing by year’s end. “It looks real good,” one source opines of meeting that timetable for what would be Legacy’s seventh property.

Situated on 3.4 acres, 302 Mountain View Dr. companies as AT&T, Keller Williams, MetLife and Verizon Wireless. One document indicates no rollover
until 2013, while 78 percent of the leases extend past 2015 at the 15-year-old property. Things are equally full at 354 and 356 Mountain View Rd., says Jamieson, who does acknowledge his firm is offering up those properties. A call for offers is slated for early 2011, he reports. Best-in-class finishes and “stunning views” of Lake Champlain and Mount Mansfield are among the attributes there, he says, as is a location along Interstate 89 barely two miles from downtown Burlington.

Albeit a three-hour trek by car from Boston, Jamieson says Colchester provides quicker access from the regional airport, and is uniquely positioned for
US businesses trading in Canada. Northern Vermont’s economy is further aided by a strong educational network, adds Jamieson, citing a 12 percent vacancy rate in the office space market. “The companies that are there want to be there,” he says. Accounting giant KPMG is on the list at 354 and 356
Mountain View Dr. along with National Life Insurance, VT Managed Care and My Web Grocer, that being the largest tenant in occupying a 19,650-sf block at 354 Mountain View Dr.

In launching an investment acquisition platform in 2009, Price had said his firm would favor the Greater Boston market where his past CRE acquisitions
had been concentrated. The Vermont purchase, which will supposedly put the company above $25 million in holdings, reflects a confidence in the stabilized asset and gives the company a chance to diversify, one market professional says in assessing Legacy’s commitment.

“It’s a beautiful property and a beautiful place to go visit,” the source says of Water Tower Hill. A lack of suitable opportunities in Greater Boston might be another factor, according to a Boston broker who concurs with Jamieson that the remaining two Colchester buildings will also garner attention in the coming weeks. They are being offered minus an asking price, and Jamieson says bids are being accepted to buy them individually or as a package. “I
suspect we’ll get some of both,” he says.