CBRE Global Investors has purchased 100 High Street, a 28-story office tower in Boston’s Financial District. The Los Angeles-based real estate investment manager did not provide a price for the transaction, which closed late last week. However, according to data provider Real Capital Analytics, the property traded for $281 million.
The seller of the property is a venture led by Oxford Properties Group, the real estate investment arm of the Ontario Municipal Employees Retirement System, which historically has been a long-term holder of real estate. In May, Oxford reportedly agreed to buy a five-property office portfolio in the Boston area from The Blackstone Group for about $2.1 billion. Oxford was said to be acquiring 101 High Street and 125 Summer Street in Boston outright, while partnering with JPMorgan Asset Management to buy 60 State Street, 225 Franklin Street and One Memorial Drive in Cambridge. That portfolio sale closed on Thursday.
CBRE GI bought 101 High Street on behalf of its value-added fund. The firm declined to comment, but it currently is raising CBRE Strategic Partners US Value 7, the latest offering in its value-added real estate fund series, and targeting $1.5 billion for the vehicle, according to documents from the San Diego City Employees’ Retirement System.
Blackstone, which acquired 101 High Street in 2007 as part of its takeover of Equity Office Properties, had renovated the lobby and made a number of other cosmetic improvements during its ownership of the asset. CBRE GI now plans to make significant upgrades to the building systems, as well as add more amenities such as conference facilities and outdoor meeting areas.
As typical of CBRE’s value-added strategy, 101 High Street is located in Boston’s central business district and has experienced leasing challenges. After losing a few large tenants over the past several years, the 545,336-square-foot building currently is 64 leased to tenants that include technology companies, law firms and insurance companies.
Vance Maddocks, president of Strategic Partners US, anticipates that the burgeoning recovery in Boston’s office market will help to boost occupancies at the building. “We think we’re pretty close to the front end of a significant recovery that will happen in Boston, particularly in the financial district of Boston,” he said.
As a “knowledge market and innovation hub,” Boston is likely to see the creation of a significant number of new jobs that use office space over the next several years. Moreover, no new office supply has been added to Boston’s financial district in a decade, with no new deliveries anticipated for another four or five years, Maddocks noted.