Boston Properties Sells Office and Industrial Portfolio for $127M

SPRINGFIELD, VA – Boston Properties Inc. has sold a portfolio of 11 flex/office, industrial and data center buildings in Springfield, VA to commercial real estate investment and management firm Finmarc Management Inc. for $127.5 million.

The 740,000-square-foot portfolio comprises single-story and two-story assets that range from 27,000 square feet to 105,000 square feet. The properties are 74% occupied and six of the buildings are 100% leased. Tenants of the portfolio include ADT Security Systems, Avaya, SAIC, the Vomela Cos. and the United States General Service Administration.

Situated adjacent to Interstate 95 and Fairfax County Pkwy., the properties are located on Boston Blvd., Corporate Court and Grainger Court, and offer immediate access to Interstate 95. Located in a last-mile delivery site, the portfolio is situated near Fort Belvoir, the National Geospatial-Intelligence Agency and Marine Corps Base Quantico and it is 15 miles from Washington D.C.

“This acquisition continues Finmarc’s long-term investment strategy of identifying and purchasing institutional-quality assets with a compelling value-add component in suburban submarkets that demonstrate long-term strength and viability,” says Finmarc co-founder and principal David Fink. “We intend to grow the net operating income by aggressively marketing the available space to achieve 100% occupancy of the portfolio, as well as elevating rents to existing market rates. We will additionally build value by implementing proven asset management systems and protocols that maximize operational efficiencies.”

Finmarc, based in Bethesda, MD, first entered the North Carolina market last year with the $58 million acquisition of the 383,000-square-foot retail center, Plantation Point Shopping Center, in Raleigh, NC.

“We acquired this portfolio at below replacement cost and the in-place tenancy, which includes several federal government entities, will generate steady cash flow,” says Finmarc principal Neil Markus. “We believe well-located and best-in-class flex/office and industrial buildings situated in the outer ring suburbs will continue to flourish and we remain extremely confident in the long-term economic fundamentals of the Springfield and Northern Virginia submarket.”

Northern Virginia’s industrial market achieved a record low 4.2% vacancy rate at the end of 2021. The area’s warehouse vacancy decreased to 2.5%, and additionally last year, more than two million square feet of flex/office and warehouse space was leased within the region. In the past 12 months, the Newington/Springfield submarket has experienced a rent growth of 9.8% due to the lack of new product in the area in recent years. The submarket has experienced a nearly 42% rent growth in the past decade.

Cushman & Wakefield’s William Collins and Eric Berkman represented the seller in the transaction and Finmarc Management represented itself. Cushman & Wakefield’s Michael Zelin and Marshall Scanlon also helped procure the financing. Kelley Drye & Warren’s Joe Hoffman and Aaron Rosenfeld provided legal services, and Met Cap Advisors’ Cliff Mendelson served as a consultant in securing the debt.