TH Real Estate Sells Stake in Boston Tower for $210M

The investment manager sold a 49.9 percent interest in 501 Boylston St., a 610,000-square-foot office and retail property, to Norges Bank Real Estate Management.
501 Boylston St.
501 Boylston St.

TH Real Estate has pocketed $209.9 million on the sale of a minority stake in 501 Boylston St., a mixed-use office and retail asset in Boston. The real estate investment manager—an affiliate of Nuveen, the investment management arm of TIAA—sold a 49.9 percent interest in the 610,000-square-foot property to Norway’s Norges Bank Real Estate Management.

Located in the city’s tony Back Bay neighborhood, 501 Boylston has been a part of TH Real Estate’s portfolio since 2007, when TIAA acquired the property from Broadway Real Estate Partners for $370.5 million. The recent disposition of an interest in 501 Boylston was part of a strategy.

“We’ve owned the building for over a decade and have successfully executed on our original business plan for the property,” Sam Flood, regional head, New England & Midwest Investments, Americas, with TH Real Estate, told Commercial Property Executive. “We’ve co-invested with Norges in numerous cities and asset types over many years and they are an excellent partner. With strong market fundamentals in Boston, we felt the time was right to bring them in as a joint venture partner on this property and capture a nice return of capital to the real estate account.”

501 Boylston, developed in 1940 to serve as the headquarters of New England Mutual Life Insurance Co., features approximately 460,000 square feet of office space, in addition to roughly 140,000 square feet of retail space with an address on Newbury St. Tenants at the property include fashion retailer H&M and coworking space provider WeWork, which entered into a lease agreement for 123,500 square feet at the 10-story tower in the first quarter of 2018.

TH Real Estate will hold onto more than a majority interest in 501 Boylston; the company will also continue to serve as asset manager, for which Norges will pay an ongoing fee.

Still bullish on Beantown

The Boston office market is thriving and, as noted in a second quarter 2018 report by commercial real estate services firm CBRE | New England, “continues to make it rain absorption.” The market posted approximately 716,000 square feet of positive absorption during the quarter, for a total of roughly 1.5 million square feet for the first half of the year. TH Real Estate remains keen on the city.

“We continue to put money to work in Boston on behalf of our clients across the risk spectrum,” Flood said. “It’s a dynamic market that provides a wide range of investment opportunities and risk-return profiles.”

Image courtesy of TH Real Estate