DivcoWest Acquires Boston Office Asset for $125M
A Blackstone unit sold the property.
DivcoWest is expanding its Boston footprint with the acquisition of 399 Boylston, a 13-story, 245,000-square-foot Class A office building in the city’s Back Bay. The San Francisco-based real estate investment firm purchased the property from Blackstone subsidiary Perform Properties for $125 million.
The price tag was slightly higher than the $117 million Perform paid when it acquired the asset from Shorenstein in September 2014, according to Yardi Matrix data. The previous owner also secured a $108.2 million loan for the property originated by Deutsche Bank Trust Co. Americas in September 2019, the same source shows.
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Newmark, including Edward Maher, Boston capital markets executive vice chairman, represented the seller. JLL will continue serving as the exclusive leasing agent for the property.
Prime amenities, location
Completed in 1983, the office building has floorplates ranging from 16,005 to 19,555 square feet. The property recently received $35 million in tenant-focused upgrades, including a full-service fitness center, a yoga studio, bike storage, locker rooms, showers and a salon.
The first floor includes 12,592 square feet of retail space with tenants like Sassoon Salon, CorePower Yoga, Carbon Health Urgent Care and Tatte Bakery and Café. Office tenants include Slalom Consulting, Lineage Capital, Coldwell Banker Realty, Elevate Business Coaching and Ligris + Associates. Workbar, a coworking operator, also occupies about 12,000 square feet at the property that was 90 percent leased at closing.
The building is at the intersection of Boston’s historic and business districts on the block between Arlington and Berkeley streets, near the Boston Public Garden. The property’s location provides immediate access to the MBTA Green line, with connections to the Red and Orange lines two blocks away. Newbury Street’s retail and dining offerings are also nearby.
Growing Boston presence
DivcoWest, a DivCore Capital company, views Boston as a strong market and plans to keep growing its holdings in the city and nearby submarkets. Michael Falvey, the firm’s senior director & head of acquisitions, called Boston one of the most resilient and desirable office markets in the country.
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DivcoWest’s largest asset in the metro is Cambridge Crossing, a 43-acre mixed-use development in Cambridge, Mass. The campus, one of the biggest construction projects in Boston, will feature 4.5 million square feet of life science, retail, office and residential space at full build-out.
Last month, the firm officially opened One Lincoln, a 36-story, 1.1 million-square-foot office tower in downtown Boston formerly known as State Street Financial Center. DivcoWest and several other investors purchased the asset for $400 million out of foreclosure in March and spent $100 million upgrading the building with new amenities including a wellness center, fitness center, artisanal food market, rooftop basketball and tennis court and a tenant-only whiskey bar.
DivcoWest also owns 75 State St., a 31-story, 840,932-square-foot Class A office tower that overlooks the historic Faneuil Hall Marketplace and the Financial District.
In addition to its San Francisco headquarters, DivcoWest has offices in Cambridge, Los Angeles, Silicon Valley, Washington, D.C., New York City and Austin, Texas. The firm and its predecessor have acquired approximately 61 million square feet of commercial space, primarily in the U.S., since 1993. Its current portfolio includes existing and under-development properties in the office, R&D, lab, industrial, retail and multifamily sectors.
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