According to Steve Brooks, vice president of asset management for Berkeley, the initial package from Motorola, which is located within the Cabot Business Park, included four buildings in 407,000 sf and two additional parcels which were six and nine acres each and were not permitted for development at the time.
Brooks tells GlobeSt.com that a 22,000-sf building, which was slightly segregated from the others, was sold to the company leasing it for $2.5 million. Brooks notes that Berkeley was not planning on turning over this property that quickly, but adds, "We felt the market was paying a premium for long-term credit tenants."
The three buildings that were sold to HRPT are about 90% leased. Tyco Healthcare Group has eight years left on its lease of one of the three buildings which totals 124,000 sf. Motorola leased back another one of the buildings, which is 90,000 sf, and its lease doesn't expire until 2006. The third building, which is 160,000 sf, has Vanguard Management Solutions, a division of Platinum Equity LLC. leasing 115,000 sf. Brooks adds that Berkeley recently leased up 13,000 sf in the building to Waste Management for five years as well as another 7,000 sf to other tenants.
"There was enough term left on these leases to make them attractive to investors," points out Brooks. "We felt if we held on to the property too much longer we would lose the advantage. It was time to pull the plug." The property averages about $13 per sf for office space.
Along with the three buildings, HRPT also acquired the nine-acre parcel that is now permitted for 150,000 sf of office space development. Berkeley decided to hold on to the six-acre parcel, which is located across the street from this complex and is permitted for 100,000 sf of office space development. Brooks says that the company wanted to maintain some land in the area and didn't think it could get enough for the site to make it worth selling. "It's one of the last developable sites in the business park," he notes.
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