Cresset Getting Active in Suburban Boston

LEXINGTON, MA-Sidestepping the firm’s historic focus on value-added real estate, Cresset Partners LLC has completed the purchase of 475 Bedford St., a 71,000-sf building fully leased to Boston Sports Clubs. The $9.7-million transaction was negotiated by NAI Hunneman Commercial Co.

“There’s really nothing to do there,” says Cresset principal William Curtis, concurring that situation is not in keeping with the company’s normal investment targets that require hands-on attention. “This is a diversification for us,” he says, providing Cresset’s financial backers with a measure of current return as they wait for longer-range endeavors to deliver. Since the firm’s founding in 2000, Cresset has developed a Boston hotel; converted an urban office building into housing and retail; and is presently upgrading a Boston Harbor parcel into multi-level retail and restaurant space.

According to Curtis, Cresset has attempted to buy into stabilized deals, but as with many investors has often found the pricing overly aggressive and lacking in sufficient yield. While perhaps not producing the returns seen in the firm’s riskier programs, Curtis says 475 Bedford St. will provide cash flow for an extended period, with BSC’s lease running for at least another eight years. Were BSC to leave at that point, Curtis says the nine-acre property would seem a perfect redevelopment site given a location on Route 225 near Route 128.