MEPT, Bentall Kennedy Go Shopping in Boston
- Jan 23, 2015
Showing “strong interest and confidence in the Boston market,” Multi-Employer Property Trust has acquired nine assets in three separate transactions in Boston totaling $250 million, according to its real estate advisor, Bentall Kennedy L.P.
The acquisitions, which total more than 650,000 square feet, are located in the city’s South End and Seaport District. MEPT also acquired the Necco Garage, a six-level, 588-space parking facility in the Fort Point Channel submarket of the Seaport District.
“We have been actively pursuing investments in the Boston area for some time. Boston has very compelling market fundamentals as a result of its diverse workforce and strong economic growth, driven by the city’s education, healthcare and technology sectors,” David Antonelli, executive vice president & MEPT portfolio manager at Bentall Kennedy, said in a news release. “The assets acquired on behalf of MEPT provide a balance of both stabilized, cash-flowing components, and value-add development opportunities, which position the Fund to benefit from further economic expansion.”
One portfolio is adjacent to Boston Medical Center and is comprised of two, fully-leased, medical office buildings, three properties intended for redevelopment and two acres of land for potential multi-family development. MEPT acquired this portfolio with properties at 660 and 720 Harrison Ave., 575 Albany, 100 East Canton and 123 East Dedham in a joint venture with Boston-based Leggat McCall Properties. The seller or sellers were not identified.
Bentall Kennedy is considering options for this South End portfolio, including new apartment construction, according to its release. The real estate advisor to MEPT noted the submarket has been seeing more residential development because of its proximity to major employers, public transportation, restaurants and entertainment venues.
The Fort Point Channel properties are three office buildings at 313 Congress St., 330 Congress St. and 300 A St. that have about 221,000 square feet and 35 parking spaces. The properties, which sold for $105.6 million, are all former warehouse buildings owned by DivcoWest that have been converted to high-quality creative spaces. HFF exclusively marketed the property for DivcoWest and secured MEPT as the buyer.
“The Fort Point Channel area is one of Boston’s most exciting neighborhoods,” HFF Senior Managing Director Coleman Benedict said in an HFF release. “In this acquisition, MEPT and Bentall Kennedy have acquired irreplaceable assets in a submarket that is marked by massive tenant-in migration and strong barriers to entry.”
The HFF investment team was led by Benedict, Director Ben Sayles and real estate analyst Patrick McAneny.
MEPT said the properties are attractive to technology and creative tenants that like the open loft-like work spaces. The neighborhood, part of the city’s growing Seaport District, has numerous mixed-use projects under way and is quickly becoming a live/work/play location. Last week, Tishman Speyer said it was breaking ground later this year on a mixed-use development with offices and luxury condos at Pier 4 in the Seaport District.
“These acquisitions advance several aspects of the core strategy of the Fund,” Antonelli said in his firm’s release. “This strategy includes increasing investment in primary markets, acquiring office properties in urban locations with knowledge industries, and developing build-to-core projects in innovation-driven markets.”
MEPT is a $7 billion, open-end commingled real estate equity fund that invests in a diversified portfolio of institutional-quality real estate in 25 major metropolitan markets across the United States. It is owned by more than 320 institutional investors, including 14 multi-employer and public employee plans in the Boston area. Most recently, Bentall Kennedy expanded MEPT’s holdings in San Francisco, where the fund acquired 600 California St., a 20-story, Class A, office tower for $216.5 million.