Oxford Properties CEO Blake Hutcheson (right) and Boston Properties CEO Owen Thomas
Oxford Properties Group has been a prolific buyer but not a developer of commercial real estate in Greater Boston, acquiring $3.5 billion worth of office buildings in recent years including joint ventures.
The Toronto-based real estate investment manager’s next step could be speculative development, CEO Blake Hutcheson said Friday.
“We’ve gone spec in Washington, D.C. and New York. The short answer is we have the guts to do that,” Hutcheson said at a forum sponsored by the Commercial Brokers Association.
In September, Oxford submitted a proposal to redevelop the Volpe Center, a federally-owned 14-acre property in the heart of Cambridge’s Kendall Square that could be divested to a private developer as soon as 2017.
Oxford, the real estate arm of the Ontario Municipal Employees Retirement System, has been on a buying spree in Boston and other East Coast cities as it expands its U.S. real estate portfolio.
Oxford and J.P. Morgan Chase paid $1.3 billion in November for 500 Boylston/222 Berkeley St., a 1.3-million-square-foot office tower in Back Bay. That transaction set a record at $1,000 per square foot. In the past two years it’s also acquired 745 Atlantic Ave., 125 Summer St., 225 Franklin St. and 60 State St. in downtown Boston and One Memorial Drive in Cambridge.
Oxford exemplifies the new breed of owners for many of Boston and Cambridge’s trophy office buildings: foreign and U.S. funds investing on behalf of retirement systems that are expected to hold their assets for the long term. Such investors are seeking stability in coastal cities that have strong job growth and rising office occupancy rates.
Oxford Properties has $16 billion in assets under management from the Ontario Municipal Employees Retirement System, which has expanded its real estate holdings to 18 percent of its overall portfolio.
Hutcheson shrugged off concerns about an end of the real estate cycle and whether rents can support high asset prices. Boston’s tech scene, financial sector and higher ed infrastructure make it one of the top U.S. cities to invest in the current economy, he said.
“For us to get in this game, we had to cut a check for seven figures. We love our position here,” he said.
Hutcheson declined to say whether Microsoft has renewed its lease at One Memorial Drive, which Oxford acquired for approximately $1,100 per square foot in September. The tech giant leased 113,000 square feet in 2010.
