Novaya, Investcorp Recapitalize Boston-Area Industrial Portfolio
- Oct 31, 2016
By Scott Baltic, Contributing Editor
Boston—Novaya Real Estate Ventures of Boston has completed the recapitalization of a four-building, approximately 900,000-square-foot industrial portfolio in greater Boston, it was announced late last week by Transwestern, which arranged the equity placement with Investcorp of New York.
The portfolio consists of 1 First Ave. in Peabody, 57 Littlefield St. in Avon, 176 Grove St. in Franklin and 326 Ballardvale St. in Wilmington and is about 95 percent leased to “a diverse roster of tenants providing strong in-place cash flow and future upside potential,” according to Transwestern.
Transwestern Partner Chris Skeffington and vice presidents Roy Sandeman and Joe Olin arranged the equity placement.
The dollar amount was not disclosed, but public records indicate that the transaction was valued at $57 million.
“The portfolio represents an excellent opportunity for Investcorp to acquire a critical mass of highly functional industrial product, within the increasingly supply-constrained Greater Boston industrial market,” Skeffington said in a prepared statement. He added that Novaya “will continue to serve as the local operator within the new joint venture structure.”
The assets were acquired between 2013 and 2015, using a mix of Novaya capital and funding from local high-net-worth families that work closely with the company, Novaya principal Scott Tully told Commercial Property Executive.
After assembling the portfolio, Tully added, Novaya made selective renovations to parking lots, floors and lighting; implemented a solar roof program; and engaged in successful leasing efforts, both securing new tenants and expanding and extending existing tenants.
Among the portfolio’s tenants are Williams-Sonoma, Symbotic (a division of C&S Wholesalers) and Analogic, Tully said.
The greater Boston industrial market started this year with almost 1.5 million square feet of absorption in the first quarter, but saw leasing activity slow to 222,000 square feet of absorption in the second quarter, likely in reaction to global economic concerns, according to a second-quarter report from CBRE. The average vacancy rate nonetheless held steady at 9.2 percent.
“Market activity was led by midsize tenants looking to expand,” and the market “remains tight with strong fundamentals continuing to drive demand in the near future,” the report concluded.
Image courtesy of Transwestern