BOSTON-One of the city’s most prominent–and resilient–commercial buildings is one the market, as TMW Real Estate Management has retained Trammell Crow and Browne Real Estate Advisors to sell 181 Newbury St. in the city’s Back Bay district. The Atlanta-based investment advisor is asking $21 million for the 19th century, Romanesque-style building after paying just over $14 million for the 40,000-sf property in 1996.
In acknowledging the decision to sell, TMW Asset Manager Karen Waldon says the firm simply decided the timing was optimal, especially after a successful leasing program that saw a venture capital firm pay an estimated $53 per sf to rent 23,000 sf in the building. “Based upon the rental rates we’ve achieved, we feel we’ve accomplished our mission as it pertains to our investors,” says Waldon. The building is now 100% leased.
The property at the corner of Exeter and Newbury Street has hosted a variety of operations over the years, although for decades it was primarily a fine arts movie house, which is why it is commonly referred to as the Exeter Street Theatre building. That use ended in 1984 when developer Jonathan Davis bought the building and converted it, amidst sharp criticism from preservationists, into a home goods store. The store quickly failed and was replaced in 1991 by a Waterstone’s Booksellers.
Waterstone’s remained in the building until last year, interrupted in the midst of its tenancy by a devastating fire that required a substantial rehab. The British-based bookstore chain then shocked everyone last year when company officials announced they were pulling all operations out of the United States.
The building’s incarnation as an office building is partly a result of the Back Bay’s tight office market, says Waldon. Mark Browne of Browne Realty Advisors adds that the venture capital firm, Idealab!, was not interested in a rank-and-file office tower in which to stake its claim in the local market. “It’s a high rent, but they are getting a signature building, which is what they want,” says Browne. Idealab! is said to be paying more than $100 per sf for tenant fit-out, with plans to move into the property next month.
Representing German institutions and wealthy individual investors, TMW has been one of the most active foreign investment groups in the Boston market. The company has been buying property in the Hub for the past 15 years, with Waldon explaining that her firm’s clients are typically looking for a 24-hour city with barriers to entry. Boston qualifies, she says, because of the onerous permitting process and lack of developable land.
TMW currently owns six buildings in the Back Bay, including five on Newbury Street, a nine-block thoroughfare that today sports some of the highest retail rents in the country. “Newbury Street has been very kind to us,” says Waldon, adding that many overseas investors are familiar with the street and its popularity among high-end shoppers.