HFF Spearheads Big Boston Office Portfolio Sale

The company arranged the $224 million sale of an office portfolio in the city's Seaport District.
263 Summer St., Boston

263 Summer St., Boston

Boston—If a commercial real estate/capital markets services provider can have a long-term relationship with a particular group of office assets, then HFF certainly has one with the Fort Point Portfolio in the Fort Point Channel area of Boston’s Seaport District. HFF recently orchestrated the trade of the nearly 410,000-square-foot office portfolio—again—selling the office collection for $224 million to a TIAA affiliate on behalf of a separate account advised by Clarion Partners.

The investment community found the offering to be, in a word, irresistible. “This particular transaction underscores the unmatched strength and desirability of the Boston market,” Ben Sayles, director with HFF, told Commercial Property Executive. “We are seeing an influx of new investors seeking to plant their flag in this gateway market, as well as established players with substantial portfolios augmenting their existing holdings.”

HFF is more than a little familiar with the Fort Point Portfolio, which consists of the brick-and-beam buildings at 263 Summer St.; 332 and 374 Congress St; and 33-41, 34, 38 and 44 Farnsworth St. In December 2012, standing in for a joint venture of Angelo, Gordon & Co. and National Development, the firm facilitated the properties’ $129.3 million sale to Clarion. What a difference a few years can make in pricing. Then, in January 2013, HFF revealed that it had arranged $296 million in financing through Bank of America for a 1.6 million-square-foot Clarion office portfolio that included the Fort Point assets.

364 Congress St., Boston

364 Congress St., Boston

Originally developed in the early 1900s as manufacturing and warehouse space, the Fort Point Portfolio has evolved into a destination for high-quality, creative office accommodations, courtesy of a series of capital investments over the years. The portfolio’s success shows in the numbers; it’s presently approximately 97 percent leased, as it was when it last changed hands in 2012.

There’s quite a bit to love about Beantown. The office vacancy rate is a respectable 8.9 percent and it’s an even more desirable 7.9 percent in the Seaport submarket, according to a first quarter 2016 report by commercial real estate services firm Colliers International. The figures are only going to improve. As noted in the report, Boston’s Seaport is the fastest growing urban area in Massachusetts, with over 10 million square feet of development and more than 4,100 new residents since 2000. And on a neighborhood level, HFF believes Fort Point is something special. “Quite possibly the hottest submarket in the country, Fort Point continues to draw a significant tenant base driven by its unique brick-and-timber office supply, the influx of thousands of residential units, as well as dozens of new popular restaurants and retailers,” Coleman Benedict, managing director with HFF, said in a prepared statement.