Allianz Real Estate has provided a $150 million loan to refinance a downtown Boston office building. The Munich-based company signed the agreement with the owner of 265 Franklin Street, a joint venture of Clarendon Properties and a fund managed by BlackRock.
Located in Boston’s Financial District, the 21-story 265 Franklin Street offers multi-tenant and full-floor floorplates. The office spans 350,534 square feet and includes a ground floor with retail stores that occupy the entire block and underground parking.
The property is 96.5 percent occupied with more than 36 tenants that have long-term leases, Allianz told Commercial Property Executive. The office building’s two largest leases belong to a law firm and bank with no other tenant having more than 5 percent of the leasable area.
According to Allianz, 265 Franklin offered stable long-term cash flow with potential revenue upside and fit within the company’s focus of investing in core assets. Last year, Allianz also made a major investment in downtown Boston when it partnered with Beacon Capital Partners to acquire a 1.2 million-square-foot office property for $845 million.
Belief in Boston’s strength
Even though the COVID-19 pandemic has affected the office market throughout the U.S., Mike Cale, co-head of U.S. Debt at Allianz Real Estate, said in prepared remarks that active cities like Boston still offer long-term growth opportunities despite the ongoing crisis.
Christoph Donner, CEO of Allianz Real Estate of America, added in his prepared statement that 265 Franklin would contribute to the resilience of the Allianz portfolio, especially as the U.S. continues dealing with the COVID-19 pandemic over the next 12 to 18 months. Donner also advocated for Boston’s downtown financial district in his prepared remarks, saying that it would remain relevant as a place to work and an investment opportunity.