Brookfield Pays $91M for Boston Office Asset

51 Sleeper St.

Brookfield Properties, one of the top office owners in Manhattan, has acquired 51 Sleeper St., an eight-story, 152,000-square-foot, waterfront office building in Boston’s Seaport District. According to Yardi Matrix data, Nuveen sold the property after acquiring it from DivcoWest in 2013 for $60 million. The asset changed hands for $91 million, a Brookfield spokesperson told Commercial Property Executive. 

The building is about 15 percent vacant at the time of sale. Current tenants include architecture firm Bergmeyer, United Way, the U.S. General Services Administration and the Department of Early Education and Care. 

Completed in 1929, 51 Sleeper features an open-plan design, oversized windows and sweeping views of downtown Boston. The new owner reportedly plans to renovate and rebrand the vintage Class B building, in keeping with the Seaport District’s position as a tech and innovation hub. Brookfield has retained Merge Architects, of Boston, to consult on possible enhancements of the building’s common areas, including the lobby, retail spaces and a potential roof deck.

“The Seaport District continues to grow as a top destination for innovative companies, high-end retail and first-class residential and 51 Sleeper Street is located at its doorstep,” Ben Brown, executive vice president and head of New York and Boston, Brookfield Property Group, said in a prepared statement.

Cushman & Wakefield will be the building’s exclusive leasing agent. The leasing team comprises Michael Joyce, Thomas Ashe, Thomas O’Regan and Devin Tringale.

The asset offers convenient access to various MBTA bus stops, including the Courthouse bus station. In addition, the building is directly across from Martin’s Park. The $7 million waterfront park now under construction is named after the youngest victim of the 2013 Boston Marathon bombings, Martin Richard, age 8.

Boosted by coworking

Coworking providers such as WeWork have become such a factor in the Boston office market that “many tenants are now looking for shorter and more flexible lease terms,” according to a fourth-quarter 2018 report from Lincoln Property Co. The upside for landlords, the report continues, is that often “these tenants are willing to pay a premium for the benefit of flexibility. This is reflected in recent rising rents of the Class B market.”

Asking Class B office rents now average $48.55 per square foot, despite modest negative absorption in Class B space in 2018. The Seaport District is doing even better, with average asking rents of $55.52 for Class B and total availability of 17.8 percent on an inventory of 4.8 million square feet.

Image courtesy of Brookfield Properties