"Structurally, the building is as solid as a rock," says Restifo, who tells GlobeSt.com that 38 Chauncy St. will see an extensive capital program to become "an A of the B's" quality wise. Architect David Hassim has been hired to handle the redesign, adds Restifo. Hassim was also the architect when Restifo converted a North Station apartment property into luxury condominiums in 2003, one of two residential plays he did in Boston this decade while at another firm, JS Karlton Inc. of Greenwich, CT.
Having hit Boston's condo cycle just as it was picking up steam, Restifo says he is now trying to replicate the fortuitous timing on the office side of the ledger. "We think Boston is a market on the upswing," says Restifo, so much so that he has the city on top of his wish list for buying additional office product. Tightness of supply for first-class space and the corresponding increase in rental rates should benefit a property like 38 Chauncy St., maintains Restifo, who hopes to target firms looking for a competitive rate but who want to retain a certain standard of space.
"It is going to be a superbly enhanced building," he says, with Haveland planning to install new mechanical systems, restore the lobby and overhaul the facade and street front retail spaces. Lincoln Property Co. will be kept on as leasing agent and property manager. Lincoln vice president Phillip Sullivan is heading up the leasing campaign.
The sale to Haveland came after Loeb had entertained letting their lender, CW Capital, take the property to foreclosure, with a local auctioneer even setting a date for the event before it was postponed. Restifo did not detail how he was brought into the mix, but says the purchase was an off-market transaction and involved a direct buy of the property and not the CBMS note held by Loeb. According to one source, the loan was in the $20-million range. Loeb acquired 38 Chancy St. in 1998 for $10.7 million as part of a portfolio purchase of several Boston buildings.
Although Restifo was able to get the building at what he estimates to be half of replacement cost, the new owner says there were multiple reasons for buying 38 Chauncy St., including its location at the crossroads of Boston's Downtown Crossing and Financial Districts. "There is a lot of upside," says Restifo, who explains that he has been looking for nearly two years to break into the Hub office scene, but was unable to find a deal realistically priced.
Among those pleased to hear about Haveland's plans is NAI Hunneman Commercial Co. SVP Jeff Becker, a veteran Downtown broker who last autumn placed a full-floor tenant in the building, which is 74% occupied. "It's a survivor," Becker says of 38 Chauncy St. "No matter what, it always seems to morph back with the market." The efficient floor plates appeal to small- and mid-sized tenants, says another broker who also predicts the property will respond to Haveland's investment. "That's really all it needs," says the broker.
Based in Stamford, CT, Haveland Estates LLC also recently acquired a 260-unit apartment complex in White Plains, while Restifo has developed several properties in the greater New York City market over the years. Although Boston's multifamily investment pace has waned considerably in the past year, Restifo says he is also willing to consider opportunities there, but stresses the focus is on Boston's office sector, both in the city and for suburban product as well. "Every market is cyclical, and we think we are catching Boston at or near the bottom," he says.
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