The transaction was arranged by Anglo Irish Bank North America, which bought the 350,000-sf tower at 265 Franklin St. on behalf of Clarendon Properties LLC of Dublin. The sale was the third Boston property Anglo Irish Bank has been involved in within just more than a year.
The building, which takes up a full block bound by Franklin, High, Batterymarch and Oliver streets, was sold by Boston Properties Inc., which along with its partner, New York Common Retirement Fund, paid $97 million for the property in 2000, according to documents on file at the Suffolk County Registry of Deeds. The seller also spent $11 million in property renovations during its six years of ownership, according to the brokerage firm involved in the transaction.
"It was certainly one of the most sought after assets we've had in a long time," says Robert Griffin, president of Cushman & Wakefield of Massachusetts Inc. which represented the seller, adding that more than 20 prospective buyers vied for the property. "It was so difficult choosing the buyer. It came down to the very last minute because there were a lot of very well qualified people at or near the same price."
Griffin says interest in the property was exceptionally high because of the building's location, 97% occupancy rate and pricing, which put it within reach of mid-sized buyers. "It was looked at as a quality investment at an intriguing yield with a good mix of tenants," that include Eastern Bank Corp. and Anglo Irish Bank North America, both of which have headquarters in the building, he says.
Net operating income for the property is expected to grow to about $10.2 million by 2007 with a stabilized cap rate of around 6%, according to Cushman & Wakefield.
Eddie Byrne, head of lending for Anglo Irish Bank's North American operations, tells GlobeSt.com that Clarendon Properties, which will hold the building as a core asset, acquired the property as a way to diversify its largely European holdings. The firm also owns property in Dublin and London.
"It's a class A stabilized office building in a very good location and a strong market," says Byrne, noting that similar properties in Dublin and London can go for between $1,000 and $2,000 per sf. The price for 265 Franklin St. was about $485 per sf.
The acquisition was Clarendon's third in Boston, where it also owns 200 State St. and the Borders bookstore building in Downtown Crossing, which it acquired earlier this year. All three deals were arranged through Anglo Irish Bank's North American branch.
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