Allianz JV Buys Boston Office Tower for $845M

The Munich-based company teamed up with Beacon Capital Partners and the Pension Reserves Investment Management Board to purchase the 1.2 million-square-foot asset.
53 State Street (Image courtesy of Newmark Knight Frank)
53 State Street (Image courtesy of Newmark Knight Frank)

Allianz’s U.S. expansion plan continues with the acquisition of 53 State Street, a 1.2 million-square-foot office property in downtown Boston. In a partnership with Beacon Capital Partners and the Pension Reserves Investment Management Board, the Munich-based investment and asset manager acquired the premier property from UBS Asset Management for $845 million. Allianz walked away from the transaction with a 49 percent stake in the asset.

The $768 per square foot purchase price reflects 53 State’s prominence in the market. “53 State Street represents one of the most iconic trophy towers in one of the United States’ most sought-after gateway cities,” Edward Maher, vice chairman with Newmark Knight Frank, said in a prepared statement. NKF orchestrated the transaction on behalf of UBS, which had purchased the asset in 2011 for $610 million.

Also known as Exchange Place, 53 State spans an entire city block and consists of two linked buildings combining the city’s past with its present. A seven-story atrium connects the 11-story Boston Exchange Building, developed in 1891, with a 40-story, blue-glass tower erected in 1985. Today, the property is 93 percent leased to a variety of occupants, including The Boston Globe, which relocated its headquarters to a 75,000-square-foot space at the property in 2017, and law firm Nixon Peabody LLP, which inked a lease for approximately 100,600 square feet in the first quarter of 2018.

NKF’s debt team, led by David Douvadjian, an executive managing director with the firm, orchestrated acquisition financing for Allianz and partners.

Busy year of buying

Christoph Donner, CEO, Allianz Real Estate of America
Christoph Donner, CEO, Allianz Real Estate of America (Image courtesy of Allianz)

Allianz has a goal of increasing its real estate investments in top global markets to $110 billion by the end of 2020, and the firm’s activity in the U.S. is playing a major role in the growth plan.

Most recently, Allianz completed the joint venture acquisition of the 1.2 million-square-foot Terminal Stores, a mixed-use property in Manhattan, in an $880 million transaction. The company also partnered with Hudson Pacific Properties on the $291 million purchase of a leasehold interest in the land and improvements of the historic Ferry Building, which features 275,000 square feet of office and retail space.

2018 again delivered strong growth and we are ending this year in a very good position,” Christoph Donner, CEO of Allianz Real Estate of America, said in prepared remarks. Altogether, Allianz has invested $728 million in new equity transactions in the U.S. this year.