One Lincoln St. John Hancock Tower
"The future looks pretty good for continued investment activity and record breaking prices," predicts David Begelfer, head of the local chapter of the National Association of Industrial and Office Properties.
But Richard Bradbury, vice president of finance for Richards Barry Joyce & Partners, tells GlobeSt.com that while per-sf pricing should continue to remain high, it could be awhile before Boston will see another tower sell in the $800-per-sf price range.
"One Lincoln is a bit of an anomaly because it's a single-tenant deal," Bradbury says, noting that the building's strong-credit tenant, State Street Corp., and the firm's long-term lease which stretches until 2023, put the property in an extremely valuable position. Still, he says, the fact that many of the city's trophy assets are selling in the $500-per-sf range is an indication of just how strong the investment market is in Boston.
"In the past, pricing was high because money was cheap and investors were flush with cash," Bradbury notes. "Today, that still holds true but now leasing fundamentals have returned to the marketplace so you can see increased pricing on towers."
Finishing second to State Street Financial Center in per-sf cost was 3 Blackfan Circle, an 18-story property that was sold to BioMed Realty Trust Inc. for $473 million, or about $673 per sf--$170 per sf less than the top-priced property, figures provided by Richards Barry Joyce & Partners show. The Hancock Tower placed fourth on the 2006 list of the most expensive buildings in the city at $532 per sf, following 10 St. James and 75 Arlington St., an 829,000-sf property that sold to Liberty Mutual for $479 million, or about $600 per sf.
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