Hailing from Austin, TX, CCI is expected to make further upgrades, according to Cushman & Wakefield broker Elizabeth Carrillo Thomas, who represented the seller in the transaction along with other members of C&W's Capital Markets Group. "It was an opportunity to buy a critical mass at an attractive price per pound," Thomas tells GlobeSt.com, while C&W senior director Christopher Griffin says many suitors envisioned the deal as a value-added play made viable by the recovery of the Interstate 495 North submarket, a region Griffin says is "starting to experience positive net absorption and increasing rents."
Thomas would not divulge the price, but Middlesex registry of deeds records put it at $20.3 million, or $28 per sf. Besides Thomas and Griffin, other members of C&W's Capital Markets Group involved in the sale were David Pergola and Robert Griffin.
Although the rebound "still has a ways to go," Thomas notes that the vacancy rate has almost been halved during the past year, and is now into the low 20% range. Orix was able to get occupancy up into the 50% range at 495 Business Center, she says, and made the asset more attractive by repositioning it for use as a multi-tenanted facility. One building is in the throes of a gut-rehab, with the skin on two sides torn off, but Thomas says she believes the new ownership is up to the task.
"It will take some rolling up of the sleeves, but there could be a real opportunity for [CCI]," she says. Although it was tied up by an outside company, Thomas says there was considerable attention from Massachusetts developers for the 495 Business Center, which is located at 836 North St. The veteran investment specialist says there is an increasing stripe of local players who are teaming up with institutional capital to breathe new life into aging or poorly positioned assets. Particularly given increased competition for stabilized opportunities, the capital sources are willing to delve into the value-add arena, says Thomas, but she explains that such an approach requires market knowledge. "They really need someone on the ground to give the [projects] the attention they need," she says.
Operated for many years as the headquarters of Wang Laboratories, the buildings were equipped with extensive floor load capacity, heavy power and substantial clear heights, all elements that made it attractive when bought by Boston-based Berkeley Investments for $30 million just as the regional recession gripped Massachusetts, with tech-heavy I-495 North rocked especially hard. Sited on an 84-acre campus, the property does offer development upside that could now be realized, being master-planned to accommodate up to one million sf of build out.
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