BOSTON-Meritage Properties LLC, a real estate owner/operator based in Scarsdale, NY, has signed an agreement with WB Tremont Street LLC--a JV between Westbrook Partners and Paradigm Properties--to purchase 18 Tremont St. for $38 million, according to sources. The 202,409-sf mixed-use office/retail building will remain as is, and will not be converted to condominiums.

Calls to Paradigm and Spaulding & Slye Colliers, who brokered the transaction, were not returned by deadline. Arthur DellaSalla, managing director at Meritage, issued a "no comment" when asked about the agreement, but added, "call me in a month and a half."

Purchased by WB Tremont in 1999 for just under $31 million, the 12-story building was built in 1902 and renovated in 1989, with an additional lobby renovation in 2000. The office portion is about 90% leased, and 3,000-sf of retail is listed as available, according to a local office locator website. 18 Tremont is occupied by a roster of smaller tenants with varying lease expirations including Archibus on the top two floors, and Unicco and the law firm of Pyle Rome Lichten & Ehrenberg occupying single floors. Retail tenants include Ritz Camera and restaurants Bel Tempo and the Hungry Traveler. Both retail and office rents are listed as $28 per sf on floors one through seven on the S&S website, and the building is expected to generate an 8% five-year average NOI return.

Founded in March of 2003, Meritage targets value-added retail, office and residential properties in the $10-million to $60-million range in the Boston, Maryland, and Tri-State New York areas, according to its website. This is the first Boston acquisition for the firm, which has had JV partners for previous office property acquisitions. The firm closed on an investment fund of $49 million of committed equity capital, Meritage/Oppenheimer Real Estate Value Partners I LP, in December.