BOSTON—Blackstone continues to sell off its office assets here. The New York City-based global asset management firm sold its 175 Federal St. office building here to German banking firm Deka Immobilien GmbH for $139 million.

The 17-story, 227-365-square-foot office building, also known as the Fiduciary Trust Co. building, was built in 1979 and is located opposite South Station. The property will be placed in the portfolio of open-ended real estate mutual fund Deka-ImmobilienGlobal. JLL represented Blackstone in the sale of 175 Federal St. The property was put on the market for sale in January. JLL managing directors Frank Petz, Chris Angelone, Jessica Hughes and Matthew Sherry marketed the property for sale for Blackstone. JLL officials had no comment on the transaction.

The office building is leased to 34 tenants, including anchor Fiduciary Trust Co., and contains more than 220,000 square feet of leasable space. In its press announcement, Deka Immobilien states that the Boston office building will help expand its geographic diversification. The 175 Federal St. office building is the fund's third location—it also has holdings in Washington, DC and New York City. “Due to its size, transparency, liquidity and dynamic energy, the US real estate market continues to be an important target country for the fund,” Deka Immobilien noted in its announcement. A Deka spokesperson tells Globest.com the firm owns seven assets in the United States, the most recent purchases being the 175 Federal St. office building in Boston and a logistics center in the Hartford, CT metro area.

A knowledgeable source says that 175 Federal St. garnered significant interest from international investors before finally trading to the German investment fund.

Blackstone has been selling some of the Boston office properties it acquired in the 2007 merger with Equity Office Properties Trust. In 2014, Blackstone sold five office properties in Greater Boston to a venture led by Oxford Properties Group. The transaction, valued at approximately $2.1 billion, involved the sale of 100 High St. and 125 Summer St. Blackstone also sold 225 Franklin St., 60 State St. and One Memorial Drive in Cambridge to Oxford and a team that included the asset management unit of JPMorgan Chase.

Last year, Blackstone sold its 500 Boylston St. and 222 Berkeley St. office towers in the Back Bay to a joint venture of the Oxford Properties Group and institutional investors advised by J.P. Morgan Asset Management in a deal valued at approximately $1.3 billion. In 2014 Blackstone sold its 40-story 28 State St. office building in the city's Financial District to a joint venture of Rockefeller Group Investment Management Corp. and Mitsubishi Estate New York for a reported purchase price of $345 million.

Despite the recent asset sales, Blackstone is still a major player in Boston, particularly after it acquired BioMed Realty Trust of San Diego in an $8-billion privatization transaction. BioMed Realty owns 18 million square feet of life science properties worldwide, including extensive holdings in Cambridge, MA. Blackstone also retains a number of office buildings in Boston as well.

Deka Immobilien's investment continues German investment interest in Boston of late. Last month, German real estate investment management firm Union Investment Real Estate GmbH paid Skanska USA $452 million for 101 Seaport Blvd. and $150 million to Related Beal for the Converse headquarters at One Lovejoy Wharf. Union Investment also owns the Godfrey Hotel Boston.

A knowledgeable source says that 175 Federal St. garnered significant interest from international investors before finally trading to the German investment fund.

Instant Insights /

German Fund Acquires 175 Federal St. for $139M

Related Stories

Recommended For You