In what may be the largest industrial sale to date this year in Massachusetts, the RREEF Funds reportedly has agreed to acquire the I-290 Industrial Park in Northborough. The six-building complex is currently owned by the Ohio State Teachers Retirement System.
“We are under contract with it,” acknowledged Spaulding & Slye Colliers principal Michael G. Smith, although he declined to identify the suitor. Nonetheless, commercial real estate sources said RREEF is purchasing the complex on behalf of institutional investors, with one broker familiar with the deal insisting that “they’re definitely the ones buying it.” RREEF is a broker, manager and seller of investment grade real estate whose holdings stretch throughout the country.
Smith would not discuss the purchase price or other details of the pact, while RREEF Funds officials did not return phone calls by Banker & Tradesman’s press deadline. Nonetheless, one source estimated the park would fetch about $50 per square feet. At 577,000 square feet, that would place the deal in the $28 million range.
The park, which sits on more than 50 acres, is three miles from the intersection of Interstates 290 and 495. That highway access, coupled with a scarcity of industrial product in the MetroWest market, were key reasons that the park attracted interest from a range of institutional investors, according to observers. “It’s a very nice property,” said Smith. “And it’s rare that you get that size of industrial product in our market.”
Room to Grow
Pension funds have been aggressively targeting industrial products in 2001, with many investors concerned about being overloaded in office buildings and other commercial real estate sectors. RREEF has certainly been pursuing industrial opportunities thus far in 2001, underscored by its acquisition in February of two warehouse/distribution buildings in Franklin. Those buildings, which had been developed on a speculative basis by Lincoln Property Co., fetched $25 million from RREEF. The 384,000-square-foot deal was one of nine sizeable industrial purchases made by RREEF this year out of 14 total acquisitions that the advisory firm has made to date. Those nine acquisitions, which do not include I-290, total 3.54 million square feet.
I-290 Industrial Park is currently 94 percent occupied. Along with the existing structures, there is additional land available for new development, according to Spaulding & Slye.
As Smith noted, industrial real estate is in relatively short supply in Massachusetts, increasing interest among investors. Several major deals have been completed in the Bay State already in 2001, including a $9.8 million deal in Westborough, the sale of 141 Middlesex Turnpike in Burlington for $3.1 million and a $6.3 million purchase of 351 Holt Road in North Andover.
