Brookfield Office Properties, the publicly-traded office division of Toronto-based Brookfield Asset Management, has sold 53 State Street, a 40-story skyscraper located in the heart of Boston’s financial district, to UBS for $610 million.
“This disposition continues our active capital recycling program in which we have sold $682 million of net assets over the last 12-plus months, reinvesting the same amount of capital into new opportunistic investments,” said Dennis Friedrich, president and global chief investment officer of Brookfield Office Properties, in a statement.
Matthew Cherry, a company spokesman, said it was an appropriate time to “monetize” the asset to free up capital for “more creative investments,” including its recent acquisition of 1801 California Street in Denver, CO from PSEG Energy Holdings for $215 million. The Denver office tower, while well-located, has significant leasing challenges, as 70 to 80 percent leases are due to roll over next year, he said.
Brookfield, then known as Brookfield Properties Corporation, acquired 53 State Street in 1996 when it took ownership of an office portfolio formerly held by the bankrupt Olympia & York. The company then sold a 49 percent interest in a two-building portfolio consisting of 53 State Street and a neighboring office tower, 75 State Street, to RREEF, the real estate investment business of Deutsche Bank, in 2001. In late 2007, Brookfield bought back the minority interest in both buildings for $477 million. The company continues to own 75 State Street.
53 State Street was 79 percent occupied as of 30 September, and is home to tenants such as law firms Goodwin Procter and advertising agency Hill Holliday.