CBRE Global Reaping $370M-Plus in Sale of Hub’s 100 High St
January 27, 2017 - By Joe Clements
BOSTON—It seems CBRE Global Investors had it right thinking 100 High St. was ripe for a rebound in paying $282 million just over two years ago on the 28-story Financial District office tower that Oxford Properties Group had deemed surplus out of a larger portfolio acquired from Blackstone Real Estate. According to industry sources, Rockpoint Group has committed to pay approximately $370 million for the 546,300-sf building that turns 30 next year, with the homegrown investment firm perservering in a broad marketing campaign conducted by Newmark’s Capital Markets group.
Calls to Newmark US Head of Capital Markets Robert E. Griffin Jr. were not returned by press deadline, but multiple sources agree the investor has “gone hard” on a non-refundable deposit and is in the midst of due diligence. A closing in mid-Q1 is anticipated for the asset should the process proceed minus issues arising. It is unclear whether Rockpoint intends to finance its acquisition.
The Griffin team that is also led by principals Edward C. Maher Jr. and Matthew E. Pullen was retained to sell 100 High St. shortly after Oxford and JP Morgan agreed to buy the Blackstone portfolio for $2.3 million in 2014, while Canadian-based Oxford separately acquired then immediately flipped 100 High St. to CBRE Global Investors, another institutional-grade operation active throughout metropolitan Boston. Real Reporter was first to unveil that firm had been tabbed as winning bidder for the tower which closed in autumn 2014 amid pledges from the new owner of instituting an extensive overhaul now being credited for enhancing value rapidly.
“They did a fantastic job,” one downtown broker tells Real Reporter. While exact numbers are unavailable, that source and others say occupancy is well above the 64 percent rate 100 High St. was at when Blackstone harvested its portfolio. Through the Griffin team’s earlier presentation, CBRE Global had been sold on the view downtown Boston was poised for an influx of new-age tech companies to replace old line financial services, insurance and legal types who had downsized after the 2008 recession. The buyer also determined flexible floor plates ranging from 30,000 sf tapering to 11,000 sf in view space would appeal to a range of user groups.
Whatever the formula, if market estimates bear out, the difference in square footage pricing between the prior sale and Rockpoint’s purchase will be $517 versus an impressive $677 per sf. In its year-end office market report, Newmark’s research team says the trend CBRE Global was anticipating via tenant migration has continued, spurred partly by access to public transportation and cheaper rents than found in hot spots such as Cambridge’s Kendall Square and the Hub’s Back Bay and Seaport Districts.
Net absorption was reduced due to the departure of some major companies including law firm Goodwin Procter to Fan Pier on the waterfront, but the Financial District did post 187,000 sf to the good on net absorption last year, according to Newmark researchers Jonathan Sullivan and Dan Carucci. Some 90,000 sf was filled by sticker-shocked Cambridge tenants, and there was 245,000 sf more high-rise activity in the Financial District compared to the Back Bay last year.
Overall, Newmark puts the Financial District at 9.2 percent vacancy on 32.9 million sf, with asking rents remaining steady at $57.18 per sf.
