Hines Global REIT Buys 510 KSF Office Center in Boston Suburb
- Apr 04, 2013
Hines Global REIT, Inc., has acquired Riverside Center, a 510,000-square-foot, three-building office complex, in the Boston suburb of Newton, Mass., from Equity Office Properties for $197.3 million.
The office property at 275 Grove St. is 97 percent leased on a long-term basis to a diverse group of tenants including the world headquarters of e-publishing company Tech Target and the pharmaceutical giant McKesson Corp.
Hines will manage the property for Hines Global REIT.
This is the third acquisition made by Hines Global REIT in the Boston area in recent years. In 2011, it acquired 250 Royall St. in Canton, Mass., a three-story, 185,171-square-foot building, and the Campus at Marlborough in Marlborough, Mass. , a three-building complex with 532,246 square feet.
“Boston is a market that Hines Global REIT has targeted for investment because of its diverse economy and highly educated workforce,” Sherri Schugart, president and CEO of Hines Global REIT, said in a news release. “Riverside Center is a well-located, quality asset with strong tenancy that will fit well within our portfolio.”
The acquisition was funded with proceeds from Hines Global REIT’s revolving credit facility and proceeds from a bridge loan made by JPMorgan Chase Bank, N.A. It has a maximum borrowing amount of $150 million, according to a filing the REIT made with the U.S. Securities and Exchange Commission.
Completed in 2000, Riverside Center is comprised of three four-story buildings. It has a café, fitness center and parking for 1,500 vehicles. It is adjacent to Riverside Station on MBTA’s Green line and near the Mass Pike/Route 128 interchange. The site is just 15 minutes from downtown Boston and Logan International Airport.
“The Route 128 Central submarket has proven to be one of the strongest suburban office markets in the nation due to its high barriers-to-development and close proximity to downtown Boston and Cambridge, as well as easy access to and from the most affluent communities in the metro area,” David Perry, senior managing director of Hines’ Boston office, said in the release.
The submarket saw average rent of $25.63 at the end of 2012, according to Cassidy Turley’s MarketWATCH Boston fourth-quarter 2012 report. Cassidy Turley noted that the Route 128 Central submarket had a vacancy rate of 12.3 percent, lower than the 15.4 percent overall average for the entire Boston suburban region. With a total inventory of 35,062,173 square feet of office and R&D space in the submarket, about 6.9 million square feet was available at year-end.
Hines Global REIT, is a public, non-listed REIT sponsored by HINEs that owns interests in 30 real estate investments in the United States and abroad. Some of the REITs more recent acquisitions have been in Europe and Australia. Last month, the REIT spent more than $215 million acquiring One Westferry Circus, a nine-story office and retail property in London, and 465 Victoria, a 15-story office building in Sydney’s Chatswood Central Business District. In February, the REIT bought the Mercedes-Benz Bank Building in Stuttgart, Germany, for $69.8 million.