REBusinessOnline

BOSTON PROPERTIES ACQUIRES ‘PREGNANT BUILDING’ IN BOSTON FOR $615M

100 Federal Street in Boston has sold for $615 million.

BOSTON — Boston Properties Inc. (NYSE:BXP), a real estate investment trust, has completed the $615 million acquisition of 100 Federal Street, a 1.3 million-square-foot office tower in Boston’s Financial District. Locals refer to the Class A property as the “Pregnant Building” because of its protruding design.

The firm purchased the property from an affiliate of Bank of America, N.A., and is expecting to incur approximately $700,000 in closing costs, which will be expensed in the first quarter of 2012. In addition to the acquisition, Boston Properties entered into a long-term lease agreement with the seller for approximately 787,000 square feet.

The 37-story office property is 93 percent leased and features views of the Financial District, Post Office Square Park, the waterfront, Boston Harbor, the Charles River and the Cambridge skyline. It’s situated on an entire 2-acre city block on Federal Street and bounded by Franklin, Congress and Matthews streets.

Boston Properties’ portfolio of 153 properties includes Class A office space, one hotel, three residential properties and three retail properties located in Boston, New York City, San Francisco, Washington, D.C., and Princeton, N.J. Approximately 77 percent of Boston Properties’ portfolio is located in CBDs, and the rest is located in suburban markets.

The company current’s portfolio spans 57.3 million square feet, with an occupancy rate of 91.3 percent across the portfolio. The company also has 2.6 million square feet under development.

Boston’s Financial District has remained stagnant with an office availability rate of 20.4 percent for the past 2 years, according to Jones Lang LaSalle. There are approximately 10 office buildings with more than 200,000 square feet of available space. However, the acquisition of 100 Federal Street and the recent sales of 53 State Street and 33 Arch Street at cap rates of 4.3 percent and 4.7 percent, respectively, have shown that institutional investors have a strong interest in the Financial District.

Boston Properties is estimated to have a $16.7 billion equity value with $8.7 billion in total consolidated debt, as of Dec. 31, 2011. The firm has an A- debt rating from Standard & Poor’s, a BBB rating from Fitch Ratings and a Baa2 rating from Moody’s.

Boston Properties' stock price closed on Tuesday at $105.71 per share, up from $92.04 per share a year ago.

— John Nelson

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