BOSTON—A joint venture of Chicago-based LaSalle Investment Management fund and L3 Capital has acquired a majority interest in 399 Washington St. for $63.25 million and plans to reposition the mixed-use property located in the Downtown Crossing submarket here.
The six-story property, now branded as “DTX399,” totals approximately 77,000 square feet and was the former home of a Barnes & Noble store that closed more than a decade ago. A majority equity interest in the property was acquired by LaSalle's U.S. value-add fund LaSalle Income & Growth Fund VII and L3 Capital. The mixed-use property is slated for repositioning. Colliers International has been retained as the leasing agent for the property. The Colliers team includes senior vice presidents Peter Montesanto and Dan Collins and associates Ted Lyons and Chris Janelle.
Eastern Consolidated brokers Evan Papanastasiou, director, represented the seller Commonwealth Partners LP, and Adelaide Polsinelli, senior managing director and principal, procured the buyer.
Joseph Munoz, investment officer for LaSalle's Income & Growth fund series, says of the purchase, “We are excited to expand our partnership with L3 Capital, an experienced, urban retail-focused partner with an impressive track record in gateway markets. LaSalle continues to grow its ownership in the Boston CBD, and will bring its market knowledge and renovation experience to our partnership with L3.”
Tim Phair, co-founder and managing principal of L3 Capital, adds that 399 Washington St., now DTX399 “has long been on our radar as an incredible repositioning opportunity, and we are eager to begin working with our partners at LaSalle Investment Management to bring our vision for the building to life.”
Eastern Consolidated's Papanastasiou says that Boston's growing economy has attracted national investors to the city. He adds that in the case of 399 Washington St. national investors “were more bullish on the property's retail and creative office potential than the local investors.”
399 Washington St. is located across the street from the Millennium Tower, a luxury residential skyscraper with a retail component that includes Primark, Old Navy, Roche Bros and Michelin chef, Michael Mina. A total of 98% of the condominiums were pre-sold, including the penthouse, which sold for a record $37.5 million, according to Eastern Consolidated. Nearby a 59-story mixed-use tower has been proposed at the corner of Broomfield and Washington streets that would feature 419 residential units and approximately 30,000 square feet of retail space.
The deal increases LaSalle's Boston portfolio. The firm has acquired four properties in the Greater Boston area since 2015, including its purchase of an interest in 10 Post Office Square on behalf of LaSalle Income & Growth Fund VII in March 2017, 10-20 Channel Center on behalf of an institutional separate account in December 2016, 800 Huntington Ave. on behalf of its core open-end fund in March 2015 and 50 Post on behalf of an institutional separate account in December 2015.
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John Jordan
John Jordan is a veteran journalist with 36 years of print and digital media experience.
