December 17, 2010
By Joe Clements

NEWTON — Five years and one week after acquiring 313 Washington St. for $12.6 million, Transwestern Investment Co. has sold the 82,000-sf office/retail building to Taurus New England for $11.1 million. A $7.67 million mortgage from Eastern Bank financed the transaction.

Boston-based Taurus was among a bevy of prospects chasing thefour-story property that sits in the heart of Newton Corner alongside the Massachusetts Turnpike. “There was a lot of action on the building,” relays Richards Barry Joyce & Partners EVP Frank F. Petz, leader of the RBJ | Capital Markets team that negotiated Thursday’s sale.

While a discount from its earlier purchase price, 313 Washington St. has held up better than other CRE through the lingering recession, explains Frank, citing an 87 percent occupancy at the time of the closing as indicative of that resiliency.

Efficient space and professional oversight from Transwestern have also served the building well, adds Petz. “It’s very stable real estate,” he says.

Taurus principal Peter Carbone concurs that his firm was drawn by a loyal tenant base and limited near-term rollover, and has long believed in the Newton Corner submarket, a district which provides a straight shot on the turnpike into downtown Boston barely seven miles away. “We love the location,” he says.

RBJ | Capital Markets Group also arranged the financing with Eastern Bank, although Carbone notes that his firm and the institution are well acquainted with each other, having done more than a half-dozen deals on prior investments. “They are a tremendous lender and we are thrilled to be working with them again,” says Carbone.

The Real Reporter first relayed in early November that Taurus had outbid the field to secure 313 Washington St., vying to join a plethora of well-known regional investors who have controlled the property since it was first renovated into office and retail in 1990 by industry icon Harold Brown. Subsequent owners have included the Grossman Cos., Michael Grill and Paradigm Properties, the predecessor to Transwestern. Paradigm had paid $11.8 million in 1999 for 313 Washington St., almost identical to the figure fetched this week.

Interestingly, while another local group did emerge victorious in the latest goround, sources say institutional money was equally enamored with 313 Washington St. US pension capital, a real estate investment trust, and even one family fund were among the competitors for the asset, according to sources.

Petz predicts Taurus will employ the investment firm’s seasoned operation to increase 313 Washington St.’s revenue stream and keep the diverse tenant base satisfied. A broader implication, he says, is how the deal reflects continued activity in the so-called Middle Markets business where assets can be had from $10 million to $30 million.

Beyond such “glamorous” trophy trades as the pending $930 million trade of Boston’s John Hancock Tower, Petz notes the Middle Markets arena is quietly chugging along towards a robust ending to 2010. “It’s encouraging to see,” Petz says of the pace, one he reports has been spirited along by a narrowing bid/ask gap in that price range, plus greater availability of financing, primarily via community banks and life insurers. “You can get some really favorable terms,” he says.

Carbone agrees, and says Taurus is searching the local landscape for future CRE opportunities, primarily inside Route 128 where the pickings have been more limited save for core product that is trading at a premium. Regardless, he says, “we are actively looking in the Boston market,” expressing optimism that conditions are loosening up for an even busier 2011. “We seem to be moving in the right direction,” he says.