"It's just not so," Beacon spokesman Alex McCallum says of reports that the firm has hired Trammell Crow to sell the development, purchased by the company in May 1998 for $123 million. McCallum says he believes the rumors are a result of several unsolicited offers made by investors eager to grab a stake in the super-hot East Cambridge office market.
"Beacon has been getting a number of inquiries about its development projects, including Technology Square," says McCallum. He adds that a similar pattern occurred earlier this summer when the firm purchased 800,000 sf in Boston's Fort Point Channel district, with several reports emerging that the company was trying to flip those holdings as well. Beacon is currently working on a development plan for that space, McCallum says.
Another factor fueling the rumors, McCallum says, may be the firm's demonstrated willingness to trade its portfolio whenever company officials feel it is appropriate. Beacon, for example, did earlier this year sell the Draper Lab building in Cambridge for $72.5 million. Along with that property, which was acquired as part of the Technology Square package, Beacon also recently sold 215 First St. in Cambridge for $68 million, as well as 233 Fremont St. in San Francisco for $146 million.
The buy-and-sell approach differs significantly from the long-term strategy employed by the erstwhile Beacon Cos. Run by the Leventhal family, whose son, Alan, now heads up Beacon Capital, the Beacon Cos. operated for decades as a developer/owner until it went public in the mid-1990s. The public REIT was sold to Equity Office Properties in 1998, with Alan Leventhal and Lionel P. Fortin then launching Beacon Capital in 1999.
As a private REIT, Beacon Capital can react quicker to market conditions, says McCallum. "They are able to be more agile in managing their portfolio," he says. "That's the advantage they have had in this development cycle."
Despite that, McCallum says Beacon Capital has no intentions of trading Technology Square, at least not at present. The company is aggressively acting on an expansion plan approved by the city, with 300 Technology Square already under construction and the firm just beginning work on 600 and 700 Technology Square. The firm can ultimately develop a fourth building as well.
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