Newmark: “Wide-Open Possibilities for 6.2 Acres at Simmons College”

BOSTON—Newmark’s freshest urban redevelopment exclusive does not have an iconic billboard in the stew, but as US Capital Markets chief Robert E. Griffin Jr. points out, the 6.2-acre parcel his firm introduced this week on behalf of Simmons College has its own “irreplaceable” and “global” cachet he deems able to rival record fervor generated last autumn selling the nearby Kenmore Square portfolio famously adorned by the beloved Citgo sign—a 310,000-sf package that brought an estimated $145 million for owner Boston University when its ground lease was secured by Related Beal as first detailed last July by Real Reporter.

“We think this is going to be an extremely hot competition,” Griffin says regarding the Simmons College site. “The possibilities (for redevelopment) are wide open,” he continues in explaining a primary driver is not neon but more in the private college’s “supreme” location at 300 The Fenway, i.e. the right flank of a little healthcare assemblage known as the Longwood Medical Area, home to the likes of Beth Israel Deaconess, Children’s Hospital and Dana Faber Cancer Center. There are 46 major institutions in the LMA that has had a vacancy rate in lab and office space over the past eight years averaging just 1 percent, Nemark reports.

“It is an incredibly exciting opportunity in the world’s most famous medical cluster,” Griffin says in referencing the LMA that has helped Boston lead all other cities awarded National Institutes of Health funding the past two decades and is the core reason Massachusetts was second only to California ($3.6 billion) in $2.5 billion of funding received from NIH this past year.

The Simmons College assignment was first unveiled Tuesday afternoon at Newmark’s popular Top of the Market program attended by a litany of industry clients, including leading developers, financiers, landlords and invited guests of the annual program. The program assessing the CRE investment sales landscape typically is highlighted by a major new listing or three, with this year’s program at the Mandardin Oriental Hotel in the Back Bay no exception. Also speaking was Vice Chair Edward C. Maher who oversees the Capital Markets operation along with Executive Managing Director Matthew E. Pullen.

Newmark’s Medical Academic practice group led by founding principal Frank Nelson is taking the charge on the Simmons College assignment, that crew front and center at the program where Managing Director Michael R. Greeley told the audience institutions across metropolitan Boston are coming to recognize the inherent value in “non-core” real estate which in the case of Simmons College is in a part of the campus that will not disturb its day-to-day operations, giving them an opportunity to “monetize” their terra firma and provide other benefits as well.

One prospect, for example, might be to sell to a biotech or pharmaceutical company a portion similar to what Emmanuel College did in the early 2000s in parceling off a piece of its campus to Merck. Besides the income, Simmons could create its own laboratory in those facilities and use it as an added teaching tool, Newmark observes. Often working as they did in the Kenmore Square assignment with other Newmark teams such as its multifamily practice group run by Michael Byrne (who also spoke at this week’s program), the Medical Academic unit has already aided other institutions in divesting assets, and Greeley says word is getting out among healthcare providers, hospitals and universities that the time is ripe for such a consideration.

Griffin, in his presentation, concurred that the strategy is gaining strength regionally due to a combination of metropolitan Boston’s booming economy and din among developers that the thickly settled city has only limited large-scale redevelopment opportunities, often locked inside the legacy holdings of a college, hospital or other non-profit. Griffin’s team was involved in sale of the Huntington Theater in 2015 for Northeastern University, among other outcomes. A medical office building owned by Partners Healthcare yielded $123 million that same year, with the Griffin team there setting a record in the city for a single MOB transaction.

For all the experience, however, Griffin says reaction to the Kenmore Square portfolio was “like nothing we have ever seen” where over 100 tours were conducted and a heavyweight lineup of global and national titans swarmed the process until hometown operation Related Beal won the day, ultimately closing a few months later and most recently striking a deal to keep the Citgo sign in place, ending months of hand-wringing among preservationists determined—as Related Beal proved to be—at keeping the landmark in place, albeit at a substantially higher rent.

In terms of Simmons College, Griffin says it is difficult presently to peg a pricing estimate because the options are so vast, with laboratory, office and multifamily development all on the table as well as an amalgam that could play to the LWP mindset, a trend that might be of particular attraction in the LMA where time-strapped physicians and researchers covet having close proximity to their hospitals or facilities.

Sans price guidance, Griffin says he is “definitely” anticipating the level of interest for Simmons College could be on a par with the Kenmore Square clamor, and will again bring prospects from far and near, possibly including some of those left behind in last year’s transformational trade. “It should be very similar,” Griffin says of the listing. “We are very excited about this one.”

Michael Greeley

Frank Nelson

Robert Griffin Jr.