By Joe Clements
BOSTON—Boston Realty Advisors founding principal Jason S. Weissman calls his firm’s latest sales listing of 311 Summer St. “one of the newest buildings in the Seaport District,” even as his team promotes the seven-story, 57,225-sf property that dates to 1904 as a structure “which exemplifies Boston’s historic industrial architecture.” And while primarily a multi-tenanted office building presently 100 percent leased, Weissman maintains its greatest value could be in a swath of ground level retail space accounting for 30 percent of the gross leasing area, inventory conveniently split on two levels.
“It is a very unique, once-in-a-lifetime generational asset in the center of everything,” Weissman tells therealreporter.com this week in confirming BRA has been retained for the exclusive assignment that CRE watchers predict could yield in excess of $610 per sf, or upwards of $35 million. While it is being peddled minus any pricing allocations, with Weissman declining to discuss market estimates, he predicts the property will be “highly sought after” by a diverse range of prospects ranging from local and national investors to overseas capital and even possible space users who might have an eye towards the future when leases begin to roll.
Weissman cites internal and external forces in staking his confidence of a brisk response, pointing to a “meticulous renovation” conducted in 2008 that transformed what had been a neglected warehouse into high-efficiency office space that earned a USGBC LEED platinum rating for certified interiors. That extremely rare designation,coupled with state-of-the-art building systems and erection of a new floor on top of the yellow-brick building provides Weissman the temerity to declare it a thoroughly modern opportunity despite the property’s true physical age.
Among the state’s leading independent CRE brokerage firms, BRA is advising 311 Summer Street LLC in the marketing process that kicks off this week. That group of local private investors paid just $7.0 million for 311 Summer St. in Nov. 2007 backed by a $5.6 million mortgage from Citizens Bank.
Because Summer Street is a raised thoroughfare some 15 feet above grade from the intersecting A Street below, the building’s retail potential could come on both levels, notes Weissman, providing “immediate upside potential” should a new owner opt to activate the Summer Street frontage and upgrade the storefronts on A Street.
The future looks equally bright for 311 Summer St.’s surroundings, outlines Weissman, with the Fort Point Channel District where it sits and the larger Seaport area seeing billions of dollars in new infrastructure and private investors pumping countless dollars into new housing, office space and retail since the new millennium and especially this decade. BRA puts the amount of mixed-use development underway or approved at 3.7 million sf, enough to declare that “the reinvention of the Seaport is well under way.”
According to BRA, “the rapidly expanding infrastructure combined with infusion of neighborhood amenities is attracting both emerging entrepreneurs and established Fortune 500 companies” to the Seaport, and in the case of 311 Summer St., one particular newcomer would seem to further bolster its cachet—General Electric, whose highly touted relocation from Connecticut to Boston will occur just up the road on A Street from 311 Summer St. “That is huge,” Weissman says of the influence on the submarket which as recently as the early 2000s was still considered an off-price fringe office submarket with virtually zero amenities.
An investor would also have time to implement any value-add program considering the building’s anchor tenant, Stantec Architects, occupies 87 percent of 311 Summer St. on a lease term that expires in summer 2022. That one pact accounts for 85 percent of the cash flow, whereas the A Street storefronts will be available for new retail in three years.
On the fundamentals front, the Seaport District continues to show progress. The latest JLL figures issued this week show the opening frame of 2016 had 73,450 sf of positive net absorption after a 2015 when an impressive 439,575 sf was recorded on the plus side for a submarket of just 9.04 million sf whose vacancy rate has now dropped to 7.9 percent. The average asking rent for all Seaport office categories has soared to $48.72 per sf, an impressive hike of 18.3 percent year-over-year. Class A product there is averaging $62.01 per sf, JLL reports, a rate in Boston only trailing the Back Bay’s $64.98 per sf.
Considering the diverse aspects of 311 Summer St., BRA has several practice areas participating in the marketing campaign, including Weissman overseeing the Capital Markets team plus the retail contingent led by Managing Directors Michael A. d’Hemecourt and Whitney E. Gallivan joined by Associate Director Christopher J. Donato. BRA’s structured finance principal Nicholas M. Herz is offering debt guidance services while corporate services Director Ryan M. Hurd is reaching out to his constituents who could include user/owner prospects. Further assistance is coming from Associates Kevin Benzinger and Jaime A. Russell. BRA has set up an informational website with property details at 311summer.com.
To view the original article please visit The Real Reporter.Tags: Capital Markets, Christopher Donato, Commercial Real Estate, Fort Point, Jason Weissman, Michael D'Hemecourt, Nicholas Herz, Ryan Hurd, Whitney Gallivan