"We like Boston quite a bit," manager Christopher Buchan tells GlobeSt.com, explaining the historic flair of the Back Bay and Beacon Hill fit into the profile of Heritor's standard property inventory. Through various programs, Heritor's owns and manages about 300 older residential buildings, nearly all in Scotland in the company's home base of Edinburgh and in Glasgow, holdings with value estimated at 120 million British pounds.
The core of its business previously had been a so-called "let-to-buy" investment program that entailed acquiring, refurbishing and renting units for a seven- to 10-year period before harvesting them at a hoped-for return. Heritor's earlier this year embarked on a plan to rent a block of those apartments on a quick turnaround basis, in some cases allowing stays as short as one day, as well as weekly or by the month.
In the case of Boston, however, Buchan says the approach will be to require stays of at least six months and possibly a year or longer. Heritor's does plan renovations and alterations to the buildings, most notably in reducing the number of units at both properties to create larger apartments capable of attracting higher-end tenants. "It's a Four Seasons" level of service and amenities, says Buchan, who adds that a local Boston architect has been retained to oversee the design and manage through the necessary approvals and construction. While gaining permits in the domain of the Back Bay Architectural Commission can be daunting at times, Buchan expressed confidence the alterations will be received positively.
Specifics are not yet ready, says Buchan, but he estimates no more than two or three units in each building. One of the properties, 273 Beacon St., has seven units in about 8,000 sf of space. Buchan could not recall the number of units in 319 Beacon St., for which Heritor's paid $3.5 million. The company paid $3.2 million for 273 Beacon St., which was sold by a private institution donated the asset last year by New Balance Shoes Inc. president James Davis. The building had previously been Davis' home.
The search for new opportunities by Heritor's is being backed by a capital infusion from the Bank of Scotland, one which will allow the company to purse development deals. The company has no additional Boston assets in its sights at present, says Buchan, but adds that the firm is interested in opportunities both in the Back Bay and Beacon Hill that could command the rents necessary to support the firm's strategy. In New York City, the search has come up empty thus far, he says, partly due to complications from the city's stock of cooperative apartments. "It's been a bit difficult," to establish a beachhead there, he says, but Buchan stresses the search is continuing.
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