Boston Industrial Portfolio Sells for $75M

The Town Industrial Portfolio, Charlestown, Mass. Image courtesy of CBRE

The investment community’s appetite for industrial assets remains strong, as evidenced by a recent transaction in Boston city limits, where The Town Industrial Portfolio sold for $671 per square foot. Acting on behalf of Center Court, CBRE Boston Capital Markets sold the 110,900-square-foot collection of three buildings in Charlestown, Mass., to Related Cos. for $74.5 million.

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Offering industrial, flex and R&D space within easy access of a confluence of thoroughfares, The Town Industrial Portfolio occupies more than 4 acres and offers ample opportunity for redevelopment. The group includes 6 Bunker Hill Industrial Park, an approximately 21,600-square-foot building that is presently home to The Broad Institute, a respected biomedical and genomic research center. The property sold for $12.5 million.

The remaining two buildings in The Town Industrial Portfolio are 420 Rutherford and 440 Rutherford. The two properties—which sold for $36 million and $26 million, respectively—total 89,400 square feet on an abutting parcel of nearly 4 acres. The structure at 420 Rutherford is operating as self storage facility under the Cube Smart brand, while neighboring 440 Rutherford is leased in its entirety as a flex/&D facility.

A playground for investors

Bolstered by the boom in e-commerce activity during the COVID-19 pandemic, the industrial real estate sector became the investment community’s darling. And while the buying frenzy may have tempered a bit in Boston, the trend appears to have staying power. Industrial sales in the first quarter of 2021 totaled $324 million in the Greater Boston area, as per research by Lincoln Property Co.

“While industrial investment cooled from a record-breaking fourth quarter of 2020, investor demand for industrial product remains extremely strong,” according to the Lincoln Property Co. report.

“Investor beliefs in industrial’s post-COVID-19 tailwinds certainly factor into high levels of capital market activity. But so too does limited investment opportunities in other property types like office, retail, and hospitality.” The growing interest in industrial product, combined with cheap debt, “has sent cap rates below 5 percent for most assets, extremely expensive for most local players. As such, assets like flex have become more attractive to investors,” according to the Lincoln Property Co. report.