BOSTON— The last buyer of 311 Summer St. was across the river in Cambridge, but an investor from a much farther distance—and at a considerably higher price—is acquiring the warehouse-turned-office building in a trade deemed Wednesday by one source to be “imminent,” the result of a global search conducted by Boston Realty Advisors. The newest owner is a Qatari investor joining a growing legion of international investors flocking to the city’s rapidly transforming Seaport District, with the buyer said to be paying upwards of $39 million.
“It’s amazing,” one industry observer aware of the commitment tells therealreporter.com in pegging 311 Summer Ave. LLC as the winning suitor and one which apparently is making the acquisition on an all-cash basis. Details were sketchy on such matters at press deadline, as multiple calls to BRA principal Jason S. Weissman were not returned. The seller is 311 Summer Street LLC, its ownership consisting of several visionary principals at architectural firm ADD Inc., a staple in Cambridge for decades until scooping up 311 Summer St. from Archon Group in Jan. 2007 at what would today seem a song—$7 million—although the structure was in disrepair and vacant upon its delivery.
Both of those matters were quickly addressed—ADD Inc. was relocated from Central Square to Fort Point Channel, and $15 million of capital improvements created a world-class environment just as the surrounding neighborhood was becoming equally gentrified and altered from a fringe office district to rivaling the Back Bay and Cambridge while sailing past rents found in the traditional Financial District.
Dating to the early 1900s, 311 Summer St.’s value was enhanced even more when architectural giant Stantec bought out ADD Inc., although many of the latter firm’s principals still practice there. Shortly after the 57,225-sf asset’s purchase, ADD Inc. the practice signed a long-term lease with 311 Summer Street LLC extending to July 2022. Leading the overhaul in 2007 were such principals as President Fred Kramer, B.K. Boley, Glasberg and Larry Grossman.
While BRA principals were unavailable to discuss the outcome of this week’s sale, marketing materials which apparently garnered response beyond the Shawmut Peninsula promoted the award-winning restoration completed in 2008 that was good enough for recognition in another way—the restoration secured an extremely rare LEED Platinum designation from the USGBC.
Besides the landlord’s restoration of the seven-story building’s unique yellow-brick facade, BRA promoted changes such as “loft-style collaborative office space,” plus the restored brick-and-beam constitution and new building systems. Having windows on three sides providing “unparalleled views” of the city skyline and Seaport were other highlights. Thanks to Summer Street being an elevated roadway, there are also two entrances, one at the bottom accessing A Street and the Summer Street portal two levels higher. In its summary, BRA called the building “an institutional-quality property that represents a core asset by every measurable standard,” those elements being its strength of tenancy, centralized location and “market standing,” on top of possessing “significant value-add potential” through NOI growth.
The Stantec lease accounts for 85 percent of the income expires in July 2022, and given 2007 rents were barely half what the Fort Point Channel is achieving today, one observer whistled at the potential change in rate once General Electric settles in up the street and the cacaphony of LWP aspects are completed. “It’s no wonder” the world is flocking to Boston’s Seaport, reflects that source who is familiar with the record pricing already being attained in the district, including this spring’s $1,027 per sf fetched for 101 Seaport Blvd. a few blocks away.
The difference in that and 311 Summer St. would be new construction in close proximity to Boston Harbor and having a Fortune 500 anchor, but those familiar with the pricing for 311 Summer St. say it might rival the amount paid per sf in the Fort Point Channel area where the warehouse conversions are clustered, several of which have traded the past 24 months at esclating amounts. “Could be,” one says of 311 Summer St. even eclipsing the top rate seen heretofore, although that could not be immediately determined. In the range of $38 million to $39 million, that would run from $664 to $681 per sf. “Somewhere in there” is how one CRE professional gauges the level while concurring a sale is at hand.
In any event, 311 Summer St. certainly drew broader notice this time around. The buyer is said to hail from the State of Qatar, a sovereign country in the southwest Persian Gulf. Corporate records peg the buying entity’s president as Ali Al Hashemi, a document bearing the Middle East address. Activities to be conducted are listed as “own and operate real property in the Commonwealth of Massachusetts.”
View the original article on The Real Reporter.Tags: 311 Summer, Downtown office