Meritage Puts 202,000-SF Property on Market

BOSTON—Barely two years after purchasing a 202,000-sf office building in the city’s core business district, Meritage Properties is putting 18 Tremont St. up for sale. Meritage paid $37.5 million for the 12-story building, but observers anticipate the New York City-based real estate firm will reap far more for the asset now that city rents are again approaching record levels. The capital markets group at Jones Lang LaSalle’s Boston office has been hired as brokers.

While incongruous to the long-term strategy laid out by Meritage founder Andrew Nathan upon acquiring 18 Tremont St. in May 2005, observers say the flip makes sense as investors scramble to grab a piece of Boston’s mini-boom. Sale prices of available buildings are nearly always being met, and often exceeded. Even at 92 years old and considered a Class B property, 18 Tremont St. is expected to garner aggressive bidding. A similar asset a few blocks away, 45 Milk St., just went under agreement to a client of Anglo Irish Bank for about $34 million, or an astounding $478 per sf. Being brokered by Cushman & Wakefield, the sale of that 71,000-sf, 114-year-old building was reported last week by GlobeSt.com.

In acknowledging to GlobeSt.com that 18 Tremont St. is on the block, Nathan concurs that the harvest is ahead of his firm’s usual hold period of three to seven years. Working with Paradigm Properties as building manager and JLL’s leasing group, Meritage was able to employ its hands-on approach and turnaround program efficiently enough to move the process along quicker, explains Nathan, a fortuitous situation given the surge of capital available.