Capital Properties Secures $133M Financing for Park Square Building

The Park Square Building is more than 96% leased.

BOSTON— Capital Properties has landed $133 million in financing for its storied Park Square Building on St. James Avenue here. The deal, arranged by Colliers Boston , was provided by Aareal Capital Corp . of New York City. The financing replaces existing debt and will also fund capital improvements at the 11-story Class A office and retail building located in the Back Bay. The three-year interest only floating rate loan has two options to extend for one year each. Capital Properties, is a New York City-based real estate investment and development firm with properties in Boston, New York, and Washington, DC. Aareal Capital is a subsidiary of German Bank Aareal Bank AG. The financing deal replaced a long-term $95-million CMBS mortgage on the property. The 540,000-square-foot building that spans an entire block between Arlington and Berkeley streets was constructed in 1922 and contains 500,000 square feet of office space and 40,000 square feet of retail space. Colliers Boston officials say that the planned capital project funding at the property include improvements to the lobby and common areas, as well as tenant improvements and leasing commissions. Colliers co-chairman Kevin Phelan , along with SVP Stephen Horan and analyst Patrick Boyle of the capital markets team arranged the financing of the property on behalf of Capital Properties. Colliers Boyle says a key to closing the financing deal was the lease deal signed between WeWork and Capital Properties. Boyle says the collaborative workspace firm will be occupying approximately 115,000 square feet of space at the building located at 31 St. James Ave. Published reports had put the lease at two floors or approximately 84,000 square feet. Officials with WeWork could not be reached for comment on its planned new office in Boston. The firm, which reportedly hopes to open its new location at Park Square later this year, currently has two locations in the city at 51 Melcher Ave. in Fort Point and 745 Atlantic Ave. in South Station. In addition to WeWork, which signed its lease in the first quarter, other tenants at the property include Fiksu, Yahoo, Goji, HNTB, and six foreign embassies. At the time of closing, the property was more than 96% leased.