Deals

DivcoWest buys four Boston properties

The San Francisco-based real estate investment management firm has acquired four offices on behalf of DivcoWest Fund III for $108m.

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DivcoWest has closed on the purchase of four office buildings in Boston’s Seaport market on behalf of its third real estate investment fund. 

The San Francisco-based real estate investment management firm purchased the four properties which total 373,000 square feet from a fund controlled by New York-based Brickman Real Estate. Although DivcoWest declined to disclose the terms of the transaction, data provider Real Capital Analytics lists the total closing price on the four buildings at $108 million. 

The properties were acquired for DivcoWest Fund III, an $871 million value-added vehicle that the firm raised last year. The acquisition brings DivcoWest’s total holdings in the Boston Area to over three million square feet of commercial property assets.

Stuart Shiff, chief executive officer of DivcoWest, said in a statement that the buildings had “great bones in a submarket of Boston that is rapidly growing in its appeal for companies”.

The buildings, all of which are converted warehouse buildings previously used by the Boston Wharf Company, are: 313 and 330 Congress Street, a pair of brick buildings totalling 106,000 square feet; Harbor Corporate Center, a 106,000 square foot office building; and 51 Sleeper Street, a 150,000 square foot building. The buildings are located in Boston’s Fort Port Channel area. Collectively, the properties are 95 percent leased.

Fund III is targeting 10 to 13 percent returns. In addition to this Boston portfolio, investments made on behalf of the fund include the five-building Walsh Bowers portfolio in Santa Clara, California; 1275 Market Street, a 350,000-square-foot office property in San Francisco; and Genesee Executive Plaza, a 159,425-square-foot office campus in San Diego.

Investors in Fund III included pension funds such as the Ohio Police & Fire Pension Fund and the Massachusetts Pension Reserves Investment Management Board, investment management firms, endowments, foundations and high net worth individuals.

Led by Shiff, DivcoWest was founded in 1993. Since then it has acquired more than 25 million square feet of real estate across the US. The firm and its affiliates are currently managing more than $2 billion of equity.