BOSTON-A joint venture group has paid $40.5 million to buy the landmark nine-story, 495,772-sf Fargo Building. The acquisition gives the locally-based partners an asset next to the Convention Center in the Seaport District.

RP Beal One LLC, a joint venture between Rockpoint Group LLC and the Beal Cos. LLP, picked up the partly vacant former US Army structure at 451 D St. from Hypo Real Estate Capital Corp., a subsidiary of Munich-based Hypo Real Estate Bank International. Hypo has held the building since 2004 after it was repossessed from its previous owners, who held a $64-million loan on the property.

Stephen Faber, vice president of asset management with Beal, tells that the partners plan to invest several million dollars into upgrading the property as they mount a campaign to lease up the 300,000 sf which currently remains vacant. “Realistically speaking, we think that given the amount of square feet we have available, the lease-up will take at least two years. But we think the market is improving and will continue to improve as additional private investment is layered on top of the significant public investment that has already been made.”

Faber says the new owners expect the building will remain as office space, despite the previous owner’s decision to seek approval from the Boston Redevelopment Authority to turn a portion of the property into a 263-unit residential condominium with 18,000 sf of retail space. Part of the ground floor may, however, be built out as a restaurant sometime in the future, he adds.

The building came at a cut-rate price for the joint venture group. Six years earlier, the same property sold for $72 million to Yale USA Investment Corp but the building was given back to the lender, HypoVereinsbank, in 2004. In 1997, Cathartes Investments and AEW Capital Partners bought the waterfront property for $17 million and spent millions of dollars upgrading it before selling to Yale.

Officials from the Rockpoint Group did not return calls from by deadline.

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