Class-A Offices Shopped in Boston's Seaport
A Barings partnership is marketing an office building in Boston’s Seaport District that’s fully occupied at rents that are well below market rates.
The 492,000-square-foot One Marina Park Drive is expected to attract bids of about $500 million, or $1,016/sf. That would produce a 4.25% initial annual yield. JLL is representing Barings and its partner, Fallon Co. of Boston.
The joint venture completed and leased up the Class-A property during the downturn. Since then, asking rents have climbed substantially as occupancy in the Seaport District has tightened.
One Marina Park Drive’s rents of about $55/sf are some 27% below the $75.16/sf average asking rate for Class-A space in the submarket. That should position a buyer to gradually lift rents as leases expire. The weighted average remaining lease term is five years.
The offering is likely to be attractive to a wide pool of potential buyers, pursuing both core and core-plus strategies. Investors remain bullish on the overall Boston office market, where tenant demand keeps pushing up rents.
Law firm Fish & Richardson is the largest tenant, leasing four of the building’s 18 floors. Other tenants include Battery Ventures, Enel X and Polaris Partners.
The glass-clad structure has a LEED gold designation. There is a high-end gym and 19,000 sf of retail space occupied by shops and restaurants.
The building opened in 2010, amid a wave of public and private construction that transformed the underdeveloped Seaport District into a new submarket with a “live-work-play” orientation. Corporations such as General Electric, PricewaterhouseCoopers and Reebok relocated there while high-rise residences, hotels and retail space were added.
The submarket’s 4.4 million sf of Class-A space was 89% leased at the end of June. Across the Boston and Cambridge markets, tenant demand continues to outpace the supply of office space. In the second quarter, there were 37 tenants competing for 23 blocks of available space of over 50,000 sf, according to JLL.