Boston Properties, Inc., an REIT that focuses primarily on the Boston, New York City, Washington, D.C., and San Francisco markets, and Whitehall Street Real Estate Limited Partnership IX, an affiliate of
Goldman, Sachs & Co., announced that they have submitted a letter of intent with Prudential Insurance Company of America to acquire the commercial property and development rights associated with the Prudential Center located in Boston's "Back Bay" office and residential neighborhood. MassDOT approved long-term leases of the four air and ground parcels at 145 and 165 Dartmouth St. to Boston Properties in December 2014; Boston Properties and Whitehall are seeking approval for development rights that would allow approximately 1.75 million gross square feet of new commercial construction, with two office buildings totaling 1.72 million net rentable square feet, a 477,000 net-rentable-square-foot retail complex and a parking garage with 2,700 spaces.
The letter is, of course, non-binding and doesn't ensure that an agreement will be reached to move forward with the companies' plans, but Prudential officials noted in a press release that the decision to move into exclusive negotiations now with Boston Properties and Whitehall was made for "strategic reasons." Brian Murphy, Managing Director for Prudential general account real estate investments, said, "From the beginning of this marketing process, we have been interested in alternatives to a straight cash sale. We believe in this property's potential for favorable investment returns well into the future, and we want to participate by retaining a stake -- directly, indirectly or both." David Raszmann, Prudential Vice President in charge of the property, added, "Prudential Center is indisputably the hub of Boston's Back Bay, and is one of America's best-recognized landmarks. Neither we, nor generations of Bostonians want that to be disrupted. The name Prudential Center will remain as part of the final deal."
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