Cornerstone reportedly is tapping Eastdil Secured to sell One Van de Graaff Dr. Eastdil officials declined comment on the matter, as did Steve Jacobs, director of dispositions for Cornerstone. "I can't discuss individual deals unless there's something to discuss," Jacobs tells GlobeSt.com. Nonetheless, sources insist the building is going up for sale, and claim Eastdil has won the assignment. The Boston Eastdil team includes James McCaffrey, Peter Joseph and Christopher Phaneuf.
"It's great real estate," says one source familiar with the asset, constructed in the 1980s by local developer Bruce Silverman. Cornerstone has owned One Van de Graaff Dr. since paying $17.2 million for the property in 1996. The building features a roster of solid credit tenants, including Adheris, Cisco Systems and the University of Phoenix. One source puts occupancy in the mid-90% range, citing the solid location and Cornerstone's stewardship for keeping One Van de Graaff Dr. competitive with newer neighbors.
Although certain areas of Greater Boston have struggled in early 2008, Burlington continues to generate solid leasing and impressive rental growth. Jones Lang LaSalle tracked 183,000 sf of positive net absorption for the submarket in the first quarter, while a review from CB Richard Ellis shows the Route 128 North averaging asking rate has jumped to $25.73 per sf, second only to the Route 128 Central average of $31.86 per sf. A deal at 25 Mall Rd., Burlington's top property, recently signed for $41 per sf, according to sources. The overall average rate for suburban Boston is $22.29 per sf, says CBRE.
Besides the robust leasing, Burlington is coming off a year that saw a number of impressive property sales. Major deals included Griffith Properties and Urdang Capital paying $66.5 million for the three-building Burlington Woods Office Park and the $212 million sale of the 800,000-sf Sun Microsystems campus. Four Van de Graaff Dr. in Burlington, acquired for $33 million last spring by Normandy Real Estate Partners, set a then-record $330 per sf for that market.
Observers note that the hefty price Normandy paid was driven partly by an above-market, long-term lease, but some maintain the value in One Van de Graaff Dr. is in its cadre of below-market leases, many signed earlier this decade when suburban Boston was entrenched in a deep recession. Now, many of those leases are reportedly rolling over in the next few years, offering the owner a chance to increase rates.
Due to the institutional quality of the building and its upside, industry watchers predict a warm reception for One Van de Graaff Dr., which is expected to hit the streets during the next 10 days. "It's being packaged right now," relays one source. The northern tier of suburban Boston has already had a few notable transactions this year, including the recently completed sale of a 105,000-sf office building near One Van de Graaff Dr. that traded for $21 million to ELV Associates. Jones Lang LaSalle negotiated that deal on behalf of the seller, New Boston Fund. Eastdil also peddled another asset in the area for New Boston Fund, helping the group trade Rivertech Park in Billerica to KBS Advisors. That $45 million deal was first reported by GlobeSt.com in its Feb. 22nd edition.
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