MassDevelopment Announces Ground Lease Sale of Award-Winning 100 Cambridge Street to Intercontinental Real Estate Corporation for $280 Million
March 18, 2015
FOR IMMEDIATE RELEASE
Mark Sternman, MassDevelopment, 617-330-2034 & 617-780-6186 (cell)
Manon Palandjian, Intercontinental Real Estate Corporation, 617-779-0459
Intercontinental Real Estate Corporation has purchased the ground lease for 100 Cambridge Street in Boston for $279,600,000 from the MassDevelopment/Saltonstall Building Redevelopment Corporation (M/SBRC). As a result, all of the debt associated with this project will be paid off, and the Commonwealth will receive nearly $90 million while retaining ownership of the underlying real estate. The sale covers the remaining 67 years of the lease through April 2082 and follows MassDevelopment's October 2014 announcement that the building had gone on the market due to favorable commercial real-estate conditions.
“MassDevelopment’s redevelopment of 100 Cambridge Street transformed a contaminated city block into a vibrant urban complex,” said Gov. Charlie Baker. “I am pleased that, in addition to returning a significant sum to the Commonwealth, this sale provides funds for the state’s Transformative Development Initiative, and enables MassDevelopment to make additional, critical investments in our Gateway Cities.”
The Commonwealth closed the Leverett A. Saltonstall State Office Building, built in 1965, in 1999 due to asbestos contamination. Subsequently, the Commonwealth selected MassDevelopment through a competitive RFP process to redevelop the property at Cambridge and Bowdoin Streets in Boston. MassDevelopment added a substantial retail and residential addition that extended the building out to Cambridge Street and provided a facade in keeping with the neighborhood character. The redeveloped property has nearly 600,000 square feet of office and retail space, and 75 residential condos, with 25% sold at affordable rates.
Intercontinental Chairman and CEO Peter Palandjian commented, “Historic 100 Cambridge Street represents a terrific opportunity to invest in a high-quality, core asset. On behalf of the many public pension and union retirement funds, the endowments and foundations invested with Intercontinental, we believe this will be a great 'hometown property' to add to our national portfolio.”
MassDevelopment reopened 100 Cambridge Street in 2004. The building has been 100% leased since 2007. 100 Cambridge Street received the BOMA Boston Building of the Year Award in 2005; designation as an Urban Land Institute Award for Excellence Finalist – Mixed Use in 2006; and a LEED O&M Silver Certification through the U.S. Green Building Council in 2011.
“By redeveloping the former Saltonstall Building, MassDevelopment has transformed 100 Cambridge Street into a fully-tenanted, green building,” said MassDevelopment President and CEO Marty Jones. “MassDevelopment is proud to work with Intercontinental on this deal that will benefit both the Commonwealth and Intercontinental.”
100 Cambridge Street will remain a Class A office building, and the building's existing leases will continue. Public offices of the Commonwealth will receive improved lease terms; both private and public tenants will experience a secure, seamless ownership transition. The redeveloped open space at the rear of 100 Cambridge Street, including the Garden of Peace, a memorial to victims of homicide, will also remain in place after this transaction. All of the residential units were sold following redevelopment and are not part of the current ground-lease assignment.
Intercontinental Real Estate Corporation is an SEC Registered Investment Adviser with decades' long experience in real estate investment, finance, development, construction management, and asset management. Since 1959, Intercontinental has managed, developed, or owned more than $10 billion in real estate property. Today, Intercontinental manages a portfolio in excess of $4 billion for its clients. The Intercontinental portfolio is diversified both by robust property mix and by geography. Fund strategies actively seek opportunities to invest in both Core and Core-Plus properties, as well as in Value-Add operating properties and development projects.
MassDevelopment, the state's finance and development agency, works with businesses, nonprofits, financial institutions, and communities to stimulate economic growth across the Commonwealth. During FY2014, MassDevelopment financed or managed 314 projects generating investment of more than $2.9 billion in the Massachusetts economy. These projects are projected to create more than 6,300 jobs and build or rehabilitate more than 1,600 residential units.