"It is under contract," acknowledges one source, with a closinganticipated by mid-October. BPG officials and brokers at Jones LangLaSalle did not respond to inquiries from GlobeSt.com, whileMeritage founder Andrew Nathan declined comment on the matter.Nonetheless, sources insist that BPG has committed to the property,with the negotiations apparently surviving a jittery commercialreal estate sales market. Both domestic and foreign bidders weresaid to have pursued the opportunity, lured by a combination of thebuilding's leasing prospects and a prime location near GovernmentCenter, Boston Common and the vibrant Downtown Crossing retaildistrict.

Meritage might appear to be wringing substantial profit in thesale, but observers predict BPG will also see upside. Not only didMeritage invest several million dollars fixing up the building'scommon areas, facade and retail to help boost leasing prospects,the deal is occurring at a time when Boston's office space issurging upwards, even for class B space. When 18 Tremont St.initially went on the sales block in June, a GlobeSt.com articlecited marketing materials putting the in-place rent at $27.77 persf, several dollars below the average asking rate of $34.47 inJLL's mid-year review. In JLL's just-issued third-quarter report,the figure is up to $39.64. Encompassing 20.6 million sf with avacancy rate of 11.4%, Boston's class B market is seen benefitingfrom firms trying to escape even greater rent accretion at theclass A level. JLL puts the average rate for that inventory at$65.61 per sf.

High-end class B assets such as 18 Tremont St. should be in aparticularly good position as companies seek to maintain a measureof quality even while stepping down a peg, observers indicate. "Itwill get tons of traffic," predicts one broker familiar with thebuilding and also with BPG, which owns one other Downtown Bostonproperty, the 52,000-sf 60 Temple Place several blocks south. BPGis "a great landlord," says the broker. "They follow through everytime." BPG has sold several of its Boston-area properties in recentyears, but earlier this month paid $63 million to acquire theWestborough Office Park in suburban Boston's MetroWest market. Thefirm also owns office parks in Woburn and Tewksbury.