German Investor Buys Seaport Office Building in Record Deal

In one of the largest single-asset trades in Boston real estate history, Skanska USA has sold 101 Seaport Boulevard to German real estate fund Union Investment Real Estate GmbH for $452 million. The transaction is Union Investment's third recent acquisition in Boston, and will join the portfolio of open-ended real estate fund Unilmmo: Europa. The deal doesn't include the building's ground floor, which will be home to the By Chloe restaurant by this summer. Newmark Grubb Knight Frank represented Skanska on the sale and the leasing; full terms of the deal were not disclosed. The divestment will be recorded by Skanska USA Commercial Development in the first quarter of 2016, Skanska said in a statement.

"After the acquisition of The Godfrey Hotel and the Converse Headquarters at Lovejoy Wharf, we are pleased to have strengthened our foothold in the important and economically very stable gateway market of Boston with the acquisition of this trophy building at 101 Seaport Boulevard," said New York City-based Tal Peri, Head of U.S. East Coast & Latin America at Union Investment Real Estate GmbH.

"The building, its elegance, and its environmentally conscious design, both inside and out, reflect our passion for the community, the Seaport and the City of Boston. 101 Seaport has been a catalyst for the transformation of the neighborhood and we look forward continuing to deliver the most sustainable and efficient buildings along Seaport Boulevard with the completion of Watermark Seaport and the development of 121 Seaport," added Charley Leatherbee, Executive Vice President of Skanska USA Commercial Development.

Skanska developed the 17-story, 440,000 square foot office building at the corner of Seaport Boulevard and Boston Wharf Road for $126 million, wrapping construction in early 2015; Skanska also leases 28,000 square feet on the tower's second floor. Accounting giant PricewaterhouseCoopers in October 2015 relocated its northeast headquarters from Boston's Financial District into 333,500 square feet at 101 Seaport, becoming the building's anchor tenant. 101 Seaport is the first office building in Boston to be certified Platinum under the LEED sustainability standard.

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Investcorp Buys DC Office Building for Over $1000/sf

Investcorp, the Bahrain-based asset manager, announced that its US-based real estate arm purchased 733 10th Street in Washington, DC for approximately $180 million, or $1,053 per square foot. The sale price of the fully leased, 170,813-square-foot office building came in just $48 per square foot short of the city's record, set by Jamestown last year for America's Square. Jamestown originally purchased 733 10th Street in 2012 for $140 million from Skanska, which built and developed the property in 2009. Investcorp purchased the property with a joint venture partner, real estate investment banking firm ScanlanKemperBard. Terms of the deal were not disclosed.

"The 733 10th Street property is a stable, prime asset offering what we believe to be resilient, long-term value in combination with attractive current yields," said Brian Kelley, Principal, Real Estate Investment at Investcorp. "We are actively seeking additional core-quality, stable properties like 733 10th Street in a handful of major gateway markets to supplement our ongoing investment activity in core-plus, high cash yield-oriented properties throughout the U.S."

The luxury office building at 733 10th Street is located in the heart of DC's East End office submarket, in close proximity to high-end retail stores, premium hotels and restaurants, two major Metro Stations and 3 blocks from the Verizon Center. Investcorp said that, despite falls in the global oil price, over the past 12 months its total real estate acquisitions have exceeded $1.5 billion in gross asset value as Arabian Gulf investors continue to look to diversify their wealth out of the Middle East region.

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Skanska Breaks Ground on Seaport Office Tower

Construction began this week on a new 17-story Class A office building in Boston's vibrant Seaport District, part of Skanska's $281 office and retail complex. Skanska USA Building is the construction manager for the project and will add a contract value of $150 million in order bookings for the third quarter of 2015. Skanska is building the tower on a speculative basis, with no tenants signed; construction is expected to be finished in early 2018.

Designed by Boston architectural firm CBT, the elliptical-shaped glass office building features two floors of retail and two below grade parking levels, with total leasable space of approximately 400,000 square feet. The curved shape of the tower will create work spaces that are better suited for collaboration because there will no corner offices, said David Nagahiro, principal at CBT Architects. The highly sustainable building is targeting LEED Platinum certification.

"121 Seaport is not your typical office building," said Shawn Hurley, executive vice president of Skanska USA Commercial Development in Boston. "We believe that 121 Seaport is pushing that design level in the city."

"As the district gets a little bit filled out, developers are going to have to be strategic about differentiating themselves from other buildings," added architect Tim Love, principal at Utile Inc. and president of the Boston Society of Architects. "The developer obviously made the decision that it's worth spending more on a building like that to attract tenants because it's kind of a marquee address."

"I want to congratulate Skanska and CBT as they break ground on this unique office building on Boston's waterfront," said Mayor Walsh at the groundbreaking ceremony. "The development team has clearly put a lot of thought into making 121 Seaport a place where people get excited about going to work. Put that atmosphere together with the building's sustainable features, and you get a truly unique development in one of the fastest growing areas of our city."

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$3.6B LaGuardia Projects Gets Contractor

The Port Authority of New York & New Jersey's Board of Commissioners announced that it had unanimously voted this week in the selection of LaGuardia Gateway Partners, a consortium that includes construction and banking firms, to develop a $3.6 billion terminal for LaGuardia Airport. Construction of the project will be funded by a public-private partnership, with the private sector contributing more than $2 billion and the Port Authority contributing more than $1 billion to construct the airport and supporting infrastructure. LaGuardia Gateway Partners, the private development team, will be responsible for designing, constructing, operating and maintaining the new terminal.

"With today's Board action, the Port Authority continues to follow through on its commitment to modernize LaGuardia Airport, with the strong support of Governor Cuomo and his Advisory Panel," said Port Authority Chairman John Degnan. "By utilizing an innovative public-private partnership in this endeavor, the agency is also taking another important step in bringing state-of-the-art financing techniques to the task of updating our region's airports and other critical infrastructure."

"We look forward to partnering with the Port Authority on this significant project for the city and state of New York," added Stewart Steeves of Vantage Airport Group, President and CEO of LaGuardia Gateway Partners. "The team is ready to deliver an exceptional experience for the airport community and the travelers who will pass through the new terminal. We will develop a world-class facility and bring the level of operational expertise needed to deliver the airport New Yorkers deserve, both during construction and throughout long-term operations."

LaGuardia Gateway Partners is comprised of Vantage Airport Group, Skanska and Meridiam for development and equity investment; Skanska and Walsh Construction as the construction joint venture; HOK and Parsons Brinckerhoff as the design joint venture; and Vantage Airport Group for management of the operations, according to a GlobeSt.com report. The new terminal design is not expected to cost significantly more than previously anticipated for the old replacement concept. The board's action also limits the cost of the new entry portal to no more than $400 million, with construction based on future Board authorizations consistent with the Port Authority's Capital Plan process.

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55 Allen Plaza Sold at Auction for $57M

The Atlanta office tower 55 Allen Plaza was purchased from Barry Real Estate Companies in a foreclosure auction this week for $57 million (or approximately $163 per square foot), a 31% price cut from the original loan, according to a National Real Estate Investor article. Lincoln Property Company acquired the property on behalf of a pension fund client, Teachers Retirement System of the State of Illinois. Lincoln will also be leasing and managing the office tower.

The 350,000 square foot class-A office tower at 55 Ivan Allen Blvd. NE originally opened in May 2007 and is part of Hal Barry’s Allen Plaza. The property was 74% leased at the time of purchase with major tenants including Ernst & Young, Skanska, Cushman & Wakefield and ASD.

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