All parties involved are remaining mum on the J.P. Morgan situation, but the landlord does acknowledge substantial velocity, including a just-completed lease for 26,000 sf with the Aberdeen Group, a Harte-Hanks company that is relocating from 260 Franklin St. in the Financial District. "It's a done deal and we are very excited," says Robert Doherty, a Beal Co. official. Seaport Center has another 200,000 sf of leases pending, he estimates, albeit declining to identify the prospects. According to sources, however, J.P. Morgan accounts for the bulk of that total.
"I know its happening," one broker tells GlobeSt.com of the J.P. Morgan lease. The firm is expected to relocate employees from One Beacon St. and 73 Tremont St., a pair of buildings on Beacon Hill. One source calls the lease a "coup," but not just for the partnership that paid $40 million for the building also known as 451 D St. Sources say J.P. Morgan had been mulling suburban alternatives, threatening the departure of several hundred positions from the city. "It could have been devastating for Boston," opines one observer. Instead, J.P. Morgan is said to be doing a 15-year agreement, offering a long-range presence.
Calls to J.P. Morgan's brokers at Cushman & Wakefield, a team consisting of Gil Dailey, Kevin Hanna and David Martel, were not returned. Sources say they believe J.P. Morgan has signed a letter of intent, but indicate the final lease is still not completed.
While he would not discuss that matter, Doherty did praise the Jones Lang LaSalle leasing team of William Barrack, William Collins and Ben Heller for cementing the five-year Aberdeen Group lease. That firm, which was represented by Barry Hynes of DTZ FHO Partners, will be moving in by August, says Doherty, adding he believes the lease underscores how far the Fargo Building has come since it was purchased virtually empty from Hypo Real Estate. Before the German bank took back the building in lieu of foreclosure in 2004, the previous owner had lost on a plan to convert the structure into a telecommunications data center. Hypo then emptied the Fargo Building after deciding to pursue a residential conversion.
Beal and Rockpoint purchased the asset for about $80 per sf, a bargain-basement price especially given that millions of dollars had already been spent on technology and physical improvements. Beal and Rockpoint have continued to make investments, says Doherty, hoping to reposition the property to attract a higher level of tenant than that in previous incarnations. The lobby was expanded, entrances and elevators were upgraded and a new roof and windows were installed.
Besides Aberdeen Group, Digital Review also just signed on for 7,000 sf, bringing a New York Stock Exchange-listed company to Seaport Center. The real sea change there occurred a few months ago when Boston Coach Co. arrived, says Doherty. Not only is the firm a Fidelity Investments company, its well-appointed space enables the landlord to show tenants the possibilities that can be done in the old building, which opened in 1910 and served as an indoctrination center during World War II, housing thousands of soldiers.
"It's a much more accepted business address than it was two or three years ago," says Doherty, who estimates that Seaport Center could be 85% leased by this spring should the latest negotiations hold together. And while stressing that more needs to be done to see that happen, Doherty says the property "appears to be the right product at the right time," with rental rates in the high $20's per sf seen as a viable option to $60 and $70 per sf rates now being registered in Boston's Financial District. "It has completely exceeded our expectations," he says of tenant interest in Seaport Center.
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