Investcorp to Buy 160 Federal from Beacon/Taurus Via Eastdil For $190M+

BOSTON—An ornate office tower in Boston’s thriving downtown is being acquired by an overseas capital source from the Middle East, sources are telling therealreporter.com regarding the pending sale of 160 Federal St. by a joint venture of Beacon Capital Partners and Taurus Investment Holdings being traded through Eastdil Secured. The high-profile listing first unveiled in June by Real Reporter has led to Investcorp being tabbed today as winning suitor at pricing said to be around $190 million—and possibly eclipsing that mark.

“It’s them,” one industry veteran declares when asked whether Investcorp has won out over a pair of able finalists who had emerged from a broad field of local, national and global capital piqued by the historic landmark building that features ground floor retail enlivened during the brief Beacon/Taurus tenure that began in 2015 via a partial exchange valued around $112 million. Taurus had held an ownership position prior to Beacon’s arrival in a venture with Invesco Real Estate Advisors, that group cashing out to Beacon.

The uniqueness of 160 Federal St. and rapidly changing nature of an area where Downtown Crossing, the Financial District and South Station all converge made for wild fluctuations in pricing expectations among those on the sidelines handicapping that metric during the early going of the latest sales process, but most spoken to now concur the result could eclipse $190 million. That would put a deal in excess of $537 per sf, an impressive result for the 24-story Art Deco building dating to 1929. It would also be in line with $537 per sf nearby One Winthrop Sq. recently fetched.

As in the previous Real Reporter article, members of Eastdil’s Capital Markets team did not respond to inquiries regarding 160 Federal St., in this case regarding whether a buyer has been selected and if so, is it indeed Investcorp, a notion multiple sources claim is the case. The Eastdil contingent featured in June’s story announcing 160 Federal St.’s launch included Boston senior professionals James McCaffrey, Sarah Lagosh and Carlos Febres-Mazzei.

Observers spoken to who support the idea of a deal topping $190 million credit Beacon and Taurus for continuing a repositioning begun under the Invesco tenure that had pushed occupancy from mid-50 percent to 86 percent, with the mark at 91 percent when the stewards brought 160 Federal St. to the sales block. A mix of new arrivals and renwed firms such as anchor tenant Rackemann Sawyer & Brewster—which leases 34,000 sf—were among the stabilizing results cited in the June Real Reporter piece, while enhanced amenities are also being tabbed for helping the elegant building go up successfully against other renovated buildings and the Hub’s wide stripe of tower space.

Details of when Investcorp might complete its anticipated due diligence process and close on 160 Federal St. were not available, but office market fundamentals going into the final frame of 2016 appear to be holding firm. Encompass Real Estate Strategies shows 1.03 million sf of positive net absorption during the past 10 months for urban Boston, of which 67.8 million sf is tracked and the vacancy rate is now down to a thin 8.0 percent. Rents are averaging $58.34 per sf, Encompass principal Brendan Carroll relays in the report which is tracking 1.28 million sf of new construction underway. That new supply will provide a limited option for tenants, however, given that 59 percent is already leased, according to the “Blue” survey just issued by Encompass.