BioMed Realty Trust Inc.’s presence in the Boston/Cambridge life sciences market will soon surpass 3 million square feet, now that the life sciences real estate REIT has entered into an agreement to purchase the 287,000-square-foot Cambridge Place in Cambridge, Mass. The property comes with a price tag of $119 million.

“The Cambridge life science market is what we think is the preeminent market in the world really,” Rick Howe, director of corporate communications with BioMed, told Commercial Property Executive. “There are a large number of life science companies and organizations that are looking for space — some office, some lab — and we want to be able to handle both types of users’ requirements in the market.”

Cambridge Place consists of three structures and is presently 80 percent occupied. Heading up the tenant roster are Idenix Pharmaceuticals Inc. and engineering and construction firm CDM Smith Inc., which has called the property home since the complex’s first building, One Cambridge Place, opened its doors in 1998.

The life sciences market in the Boston/Cambridge area is booming, so prospects for leasing up the remaining space at Cambridge Place and other industry-related office and laboratory properties are positive.

“The demand is strong,” Angus G. McQuilken, vice president for communications with the Massachusetts Life Sciences Center, told CPE. “Massachusetts continued to lead the nation in biotech-related construction in 2011 and that’s a trend we expect to accelerate in 2012.”

The U.S. is home to some of the world’s leading life-sciences clusters. New York/New Jersey, the San Francisco Bay Area and San Diego are among them, but Boston leads the pack, as per statistics from commercial real estate services firm Jones Lang LaSalle. And industry experts believe the Boston/Cambridge area will continue to lure life sciences businesses for the foreseeable future.

There are a few big reasons why the area is such a draw for life sciences companies ranging from large global corporations down to small entities and startups. “Companies are locating here and expanding here because they want proximity to our world-class academic institutions, our R&D, and they want proximity to partners in the industry and you’ll find all of the major global players in life sciences here in the Massachusetts cluster,” McQuilken said. “Also, they’re looking for talent. The talented workforce is the number one reason why companies choose to locate here. Then there’s the government role. Massachusetts’ 10-year, $1 billion life sciences initiative continues to be a magnet for private investment.”

Alas, the call for life sciences office and laboratory space accommodations is only going to grow louder. The average occupancy level at these properties is in the 13 percent range, according to a recent report by Richards Barry Joyce & Partners, but numbers can be deceiving. “One of the top biotech real estate concerns going into 2012 is the lack of tenant choice in the market and resulting constrained growth,” Brendan Carroll, senior vice president of research for Richards Barry Joyce & Partners, noted in a statement on the report. “It’s the downside of having such a strong biotech cluster in the region.”

Kings Crossing Shopping Center has found a new owner, as the grocery-anchored retail property in Fairfield, Conn., has just been picked up by TIAA-CREF from the previous owner, HH East Parcel L.L.C., an entity led by Summit Development. CBRE Group Inc. represented the seller and procured the buyer.

The property’s purchase price was $57.5 million, according to LoopNet.

Kings Crossing, which features a Whole Foods anchor store in its 80,702 square feet, is located directly next to newly opened the Fairfield train station. The center was developed in 2011 and is 95.5 percent leased to national chains including CVS, Petco and JP Morgan Chase. Since the property was opened so recently, the first lease is not set to expire until 2021.

“Kings Crossing is the newest center in the high-barrier-to-entry and superior-demographic Fairfield market,” Jeff Dunne, vice chairman with CBRE, said. “TIAA recognized the center’s unique combination of trophy quality construction, credit tenancy and in-fill location, providing stable long-term income.”

The life company has been investing heavily in retail of late. In October, TIAA-CREF partnered with CBL & Associates Properties Inc. on a $1.1 billion joint venture to invest in four shopping malls across the Midwest.

Additionally, grocery-anchored retail has been a target for many investors in recent quarters. Last week, Kentucky’s Springhurst Towne Center sold for $78 million to a client of Savills. Regency Centers made its first foray into the New York market with a $73 million buy on Long Island in mid-January. And Blackstone nabbed quite a bit of retail real estate in December when it ponied up $473 million for 3.9 million square feet of shopping centers, most of which were anchored by Publix grocery stores.

Fully leased premier office properties continue to be at the top of buyers’ list and Wells Core Income REIT has just added one such asset to its portfolio. The REIT recently acquired Franklin Center, a 200,600-square-foot office building in the Baltimore submarket of Columbia, Md., from Principal Real Estate Investors.

In addition to being occupied in its entirety by a creditworthy tenant, scientific and technology applications company SAIC, Franklin Center is also new — and green. The seven-story building made its debut in 2008, and it has earned LEED Gold certification by the U.S. Green Building Council.

The length of SAIC’s lease is unclear; however, Wells Core REIT should not have too much of a challenge maintaining a full tenant roster at Franklin Center should SAIC depart. The property, located near Fort Meade and the U.S. Department of Defense’s U.S. Cyber Command, sits in an area where the prospect for long-term demand for office space is on the rise. It has everything to do with jobs.

“Driven by numerous expanding industries, the Greater Baltimore area is ahead of the curve when it comes to market stabilization,” a report by commercial real estate services firm Cassidy Turley noted. “Market conditions should start to show signs of improvement with the influx of more than 15,000 jobs due to the DoD’s Base Realignment and Closure of 2005. The National Security Agency’s increased hiring efforts to support its cyber security initiatives should also have a positive economic impact on the area.”

SL Green Realty Corp. may be New York City’s largest office landlord, but the REIT hardly has tunnel vision when it comes to property types. In two separate joint ventures, SL Green has completed the acquisition of eight retail and residential assets in Manhattan’s Midtown and Upper East Side submarkets.  The REIT had announced plans for the $416 million purchase of the properties in October of last year.

In a partnership with Jeff Sutton, SL Green snapped up the 65,000-square-foot retail building at 724 Fifth Ave., relying on a $120 million, five-year mortgage loan to make the purchase. The property counts Prada as its lead tenant; the Italian luxury goods retailer leases 20,700 square feet of retail space on various levels, in addition to a boutique office space.

SL Green also just claimed 402 residential units and even more retail space for $193 million through its joint-venture purchase with Stonehenge Partners. The group of assets includes the 260-unit apartment building at 400 E. 57th St., which also features 16,000 square feet of ground-level retail, and 400 E. 58th St., a 125-unit residential tower with roughly 3,300 square feet of ground-level retail space. SL Green secured seven-year mortgage financings totaling $100 million to facilitate the acquisition.

Interests in the four-story retail building at 752 Madison Avenue and 19 & 21 E. 65th St., two mixed-use properties encompassing 17 multi-family units and 9,000 square feet of retail space, were also part of the SL Green-Stonehenge joint venture deal. And two commercial properties, the 6,000-square-foot mixed-use building at 762 Madison Ave. and the five-story commercial building at 44 W. 55th St., round out the group.

SL Green’s penchant for joint venture pursuits — both acquisitions and dispositions — continues, as indicated during the REIT’s fourth-quarter earnings conference call. “On both sides of the table, we were active, we continue to be so in 2012, notably 10 East 53rd Street, which was not discussed in December, is our latest acquisition,” Marc Holliday, CEO of SL Green, said. “It fits right in with our core business line of acquiring, repositioning and redeveloping prime New York midtown Manhattan assets in prime location. And in that case, we subsequently brought in a foreign and institutional equity joint venture partner to both leverage our equity, enhance our returns and increase our opportunity set.”

The properties on Boylston Street. Photo by Warren Patterson.

On behalf of a separate-account client, real estate investment manager Clarion Partners L.L.C. has acquired two adjoining office buildings in Boston’s Back Bay for $87.1 million, Clarion announced Tuesday. The 13-story buildings total 184,000 square feet.

535 and 545 Boylston Street have separate entrances facing onto Copley Square, but are connected on multiple floors. They were built in the mid-1960s and 1970s, Mark Weld, managing director at Clarion, told Commercial Property Executive, but in 2009 underwent an upgrade that included enhancements to the entries and the street-level retail façade.

Although the buildings are currently 92 percent leased, in an area with an average vacancy rate of about 6 percent, Weld said their occupancy is trending upward and he expects them to be at about 95 percent within the next several weeks. The buildings’ tenants include law and investment firms, consultancies and the administrative offices of a biotech company, he said. The typical tenant has 5,000 to 10,000 square feet, Weld said, and rents average about $50 a square foot.

Weld emphasized that the area on and around Boylston Street in the Back Bay has high barriers to entry and limited land available for new construction. The buildings are accessible by mass transit and two blocks from the entrance to the Massachusetts Turnpike.

Clarion has more than $24 billion in total assets under management for more than 200 domestic and international institutional investors.

Artist's rendering of ground-level retail at 530 Fifth Ave. after renovations.

While there have been some predictions for the cooling of the New York City office market, and even some talk of Downtown becoming the new hotspot of development, don’t ever count out Midtown. Near the close of yesterday’s markets, Jamestown Properties and Rockwood Capital announced the $390 million acquisition of 530 Fifth Ave. – also known as the Bank of New York Building – which is soon to undergo a $20 million renovation to bring the property to Class A standards. The purchase’s partnership also included Crown Acquisition and Murray Hill Properties.

“530 Fifth Ave. is considered an iconic building on Fifth Avenue and we look forward to restoring the property to prominence,” Michael Phillips, COO of Jamestown, said. “In addition, Fifth Avenue south of 48th Street has become a hot-bed of retail activity in the last year, and following the renovations at 530 Fifth Avenue, the building will be a stand-out option for retailers.”

A report in the third quarter of 2011 by Jones Lang LaSalle Inc. found that Fifth Avenue was the second-most-expensive street, on average, for domestic asking office rents at $97 per square foot. Similarly, Cushman & Wakefield Inc.’s data showed that the Midtown market, which ended 2010 with a 10.6 percent vacancy rate, saw that number fall to 9.6 percent by the end of 2011. Class A asking rents in the same time period increased from $67.27 to $71.22 per square foot.

The building’s office-leasing efforts will be led by Newmark Knight Frank’s president, David Falk. “When the building is re-introduced with the proposed renovations underway, I believe there will be tremendous interest from tenants that want the Grand Central location but are looking for a building that matches a company’s high-profile brand and image.”

Retail development and leasing will be handled by Jamestown and Crown, which will likely prove to be a fruitful initiative. According to Cushman, Upper Fifth Avenue saw a fourth-quarter 2011 average ground-floor asking rent of $2,338 per square foot, a 12 percent increase from the previous quarter. Lower Fifth Avenue, where the acquisition is located, increased 50 percent in the same timeframe to a record $865 per square foot.

Novaya Real Estate Ventures L.L.C., not yet one month old, has begun to build its portfolio with the acquisition of two office/R&D buildings featuring an aggregate 146,700 square feet in suburban Boston. Novaya acquired the assets, which carry the addresses of 10 & 55 Technology Dr. in Lowell, Mass., from Nordblom Co. in a transaction valued at $10.5 million.

The two, two-story brick buildings sit roughly 30 miles northwest of Boston at the entrance to the 800,000-square-foot Drum Hill Technology Center. Encompassing 57,700 square feet of space on nearly six acres, 10 Technology opened its doors in 1984 and one year later, the 89,000-square-foot 55 Technology made its debut on a neighboring seven-acre parcel. Siemens Corp. has occupied 10 Technology in its entirety for the last 20 years and is committed to the space through April 2017, and C.R. Bard Inc. has a lease for 51 percent of 55 Technology through 2014.

Commercial real estate services firm CB Richard Ellis/New England marketed 10 and 55 Technology on behalf of Nordblom for purchase as single assets — the former with an asking price of $5.9 million — or as a two-property portfolio. Investors flocked to the opportunity.

“The Lowell acquisitions are tremendous initial investments for Novaya,” Peter Carbone, principal at Novaya, said. “The properties provide strong credit and cash flow which our investors prize at this early point in the recovery cycle. The investment also provides additional upside through the lease-up of the vacancy, which is our value-added proposition.”

The timing may be just right for leasing up the extra space, and at prices above in-place rates. According to a report by commercial real estate services firm Grubb & Ellis Co., R&D/flex product “carried the market” in 2011, buoyed by increased demand from local medical device developers, electronics manufacturers and other world-class technology companies. And more of the same is on track for 2012, as per the report. “The R&D/flex market will be the strongest industrial segment, as Boston will continue to benefit from an influx of tenants involved in energy, technology and consumer staples who are attracted to the area’s established industry base and strong labor pool. At the same time, biotech start-ups will receive higher levels of venture capital enabling them to grow.”

The 133-unit Montoya Apartments in Branford, Ct.

Walker & Dunlop L.L.C. has come through for Principal Management Partners with a $163.8 million loan package for the refinancing of a four-property apartment portfolio in Connecticut. The group of assets encompasses a total of 1,170 residential units.

Two of the properties, the 349-unit Hoyt Bedford Apartments and the 238-unit Morgan Manor Apartments, are located in Stamford, while the 450-unit Seramonte Apartments and the 133-unit Montoya Apartments are sited in Hamden and Branford, respectively.

Four properties, four loans. Walker & Dunlop provided the financing under Freddie Mac’s Capital Markets Execution Program. The loans, at loan-to-value ratios ranging from 79.2 percent to 80 percent, were structured with a seven-year term with two-years interest only and a 30-year amortization.

The private lending community certainly made its presence known as a viable option for certain borrowers in the thriving multifamily market last year, but Freddie Mac and Fannie Mae remain strong go-to sources. “Banks continue to lend but generally speaking only on shorter duration loans with floating interest rates,” Willy Walker, president and CEO of Walker & Dunlop, noted during the company’s fourth-quarter earnings conference call in November. “I expect that, during the remainder of 2011 and into the first part of 2012, we are going to see a continuation of the current competitive landscape, where the agencies are lending, banks are trying to understand the regulatory landscape and deploy short-term floating rate debt, life insurance companies continue to actively lend, and CMBS exists but not as a major market force.”

Walker & Dunlop, a Fannie Mae DUS, Freddie Mac Program Plus and MAP- and LEAN-approved FHA lender, closed 2011 with a loan origination volume of $4 billion, $2.7 billion of which was through the two government-sponsored enterprises. Walker added of the current lending climate, “This landscape allows Walker & Dunlop to do what we do best, grow our agency lending business with limited pricing pressure from other sources of capital and expand our business into new areas of lending as a publicly traded non-bank finance company.”

Image courtesy Wikipedia user Beyond My Ken

After acquiring New York City’s Clock Tower building at 5 Madison Ave. in 2007 for $200 million, Africa Israel USA has sold the property to Marriott International for $165 million. The building, also known by its full name of The Metropolitan Life Insurance Company Tower, was constructed in 1909 and served as the world headquarters of the insurance firm until 2005.

The hotel chain plans to make the building its first location of the Edition brand, which was described as “a new luxury, lifestyle hotel brand created in partnership between Marriott International and [hotelier and real estate developer] Ian Schrager. According to Kew Management, fashion designer Tommy Hilfiger signed a $170 million contract in May 2011 to transform the property into a hotel, but the deal fell through in September.

Vacant since 2007, the Clock Tower property was added to the National Register of Historic Places in 1972, was designated a National Historic Landmark in 1978 and became a New York City landmark in 1989.

“We are delighted to have achieved such a strong price for this asset as a hotel property,” Laurie Golub, general counsel & managing director of business affairs of AFI, said. “It speaks to the unique nature of the building and the exciting location, which is underserved by the hospitality industry.”

The hospitality sector is likely trending upward, according to a year-end report by PKF Consulting. “Despite inconsistent economic news,” the report noted, “increases in lodging demand and property-level net operating income have most industry participants feeling optimistic that hotel property values are heading upward.”

A spate of media reports over the past two or three days have speculated about whether Silverstein Properties Inc. will build the 3 World Trade Center tower to its planned 80-story height, or will cap it at seven, and what this indicates, or doesn’t, about the Class A office market in Downtown Manhattan.

Here’s the deal: The original master development plan agreed to in August 2010 specifically stated that the construction of the 3 WTC tower, as opposed to its retail-oriented podium, would be conditioned on the extent of office pre-leasing. In a statement released Tuesday, presumably to clarify the situation, Silverstein Properties president & CEO Larry Silverstein said, “We are 100 percent committed and determined to build 3 World Trade Center to the top as quickly as possible. We agreed to a plan in 2010 that requires us to pre-lease 10 floors of office space before moving forward with the full tower.”

”We are currently speaking with a number of potential tenants and remain fully optimistic that we will sign a lease in time to complete the tower as scheduled in 2015. That agreement, which anticipated the completion of the podium in 2013, in no way prevents us from moving full steam ahead as soon as we secure a tenant.”

In plain English, the development agreement provided substantial flexibility down the road, so that the pace of building could be adjusted to demand for space. While Silverstein, obviously, would like to push the tower to its planned height, the leasing environment may prove to be the roadblock that impedes his progress.

Amid the hubbub, progress continues on several fronts at the World Trade Center site. As of this week, the steel skeleton of 1 WTC has reached 90 floors (of 104) and is now the tallest building in Lower Manhattan. The tower will top off in late spring, according to a Port Authority of New York & New Jersey spokesperson, and is slated for completion in 2013. The plan for 2 WTC is to build to street level and erect the tower (100 percent conventionally financed) later. The initial phase will be completed this year.

At 3 WTC, the concrete core is at the fourth floor. Steel will start to arrive in May, and the building will rise at least to the 7th floor initially.

Four WTC is up to the 61st floor and will top out this spring.

Finally, the transportation hub that’s being built around the interim facility that opened in 2003 is heading for completion in 2014.