BXP Snares Parcels in SF, NoVa for $98M

BOSTON-Pursuing further development in two of its stronghold markets, San Francisco and the Washington, DC metro area, Boston Properties on Wednesday evening said it had acquired parcels in each for a combined $98 million. The REIT closed on its $71-million acquisition of a development site at 535 Market St. in San Francisco from Beacon Capital Partners, which reportedly had put it on the market last March. In the Washington, DC suburb of Reston, VA, BXP will pay $27 million to buy what it terms “the last remaining parcel of land in the urban core of Reston Town Center,” where it already owns and manages four properties.

The purchase price for 535 Mission includes the foundation work Beacon Capital had already completed and the steel it had acquired to build a planned office tower there before suspending work in the fall of 2008. BXP says it's aiming for LEED Gold certification on the 27-story, 378-foot office tower, for which it expects to start construction later this month.

When completed, it will offer about 307,000 rentable square feet of office and retail space, according to a release. The tower is expected to cost $215 million to build; a fall 2014 completion date is expected.

BXP has other development projects in the works in San Francisco's South of Market submarket, where asking rents have risen 13%, according to Jones Lang LaSalle figures. The REIT acquired development projects at 680 Folsom St. and 50 Hawthorne St. last summer, and is in a joint venture with Hines on the 1.6-million-square-foot Transbay Tower.

At the Reston Town Center site, commercially zoned for 250,000 square feet of office space, BXP is evaluating a potential mixed-use development plan, which could include residential uses as well as commercial uses. The deal is expected to close in the first quarter, the release states.