Fully Leased Boston-Area Office Asset Changes Hands
- Jan 11, 2019
JOSS Realty has acquired a 139,356-square-foot Class A office building in Reading, Mass., from a joint venture between Rubenstein Partners and Nordblom Co., for $32.3 million. Cushman & Wakefield’s Boston Capital Markets team arranged the deal.
“Foremost, the appeal was Boston, which has always been a market JOSS has targeted due to its enduring positive supply and demand dynamics for commercial office space,” Larry Botel, JOSS Realty’s founding partner, told Commercial Property Executive. “We are very pleased to be able to buy an asset there and hope to do more.”
Moreover, the property, located at 55 Walkers Brook Drive, checked a lot of boxes beyond its MSA for JOSS Realty. That includes the fact that it was recently renovated by the sellers, the tenant roster is solid and diverse, and its location and access relative to the Boston CBD are superior.
“We also thought the cap rate and price per square foot were excellent on a risk-adjusted and replacement cost basis,” Botel said. “Every deal has a number of different risks and mitigants, which get us comfortable with investing. If the economy is going to slow down or hit a bump in the road, we want to be invested in properties which can sustain strong cash flow through that part of the cycle.”
The building is situated in the Route 128 North submarket of metropolitan Boston, just minutes from downtown. The six-story property is located directly off Interstate 95 and is less than 1 mile of the MBTA commuter rail in downtown Reading.
“The close proximity to Boston and superior access to the CBD and surrounding suburban areas was clearly a big positive when buying the building,” Botel said. “Furthermore, the immediate area has great amenities for our office tenants including reasonable access to public transportation, which we see as a significant long-term advantage. The communities of Reading and Andover, along with the other surrounding towns are great places to live, work and play, which is a characteristic we always look for when acquiring assets, whether downtown or in the suburbs.”
Built in 1986, the 55 Walkers Brook Drive building has a tenant roster that includes companies in the tech, health care and financial services fields. The building had a cosmetic renovation in 2008, and another between 2012 and 2018.
According to Botel, the company has allocated some capital to upgrade a few finishes and is always looking to improve the experience of its tenants. “As we get to know them and the building better we will make improvements that directly benefit their everyday experience at the property, so we can keep them as tenants well beyond their current lease terms,” he said.
Boston going strong
According to Avison Young’s third-quarter 2018 Greater Boston office report, the area was one of the best performing office markets in the U.S., with average rents and overall office supply increasing at historic rates.
JOSS Realty Partners’ portfolio currently consists of 25 properties totaling approximately $1 billion. In August, the company acquired Waterfront II, one of the two buildings that make up the Offices at Waterfront Center. The five-story office property in Alexandria, Va., sold for $29.6 million.
Image via Google Maps