Guggenheim Commercial Real Estate Finance has provided a first mortgage loan to Oxford Properties Group for one of five Boston office buildings the Canadian investment firm bought for $2.1bn earlier this year.
The $150m fixed-rate permanent financing of the 22-story office tower at 125 Summer Street was “very competitively priced given the strong sponsorship and the fresh equity” going into the property, Riaz Cassum, a senior managing director with the HFF debt team that placed the loan, told Real Estate Capital.
“We had a very strong response with a range of life insurance, banks and CMBS lenders willing to lend on this asset,” he said. “Guggenheim stood out both in terms of economics and execution. They had the best economic terms and they showed a lot of excitement and willingness to move quickly.”
Oxford, an investment manager for the government of Ontario, paid Blackstone Group a reported $2.1bn in September for the five-building portfolio, which included 125 Summer Street, 60 State Street and 225 Franklin Street in Boston, and One Memorial Drive in Cambridge, Massachusetts, teaming up with JP Morgan Chase on the latter three. Oxford later flipped 100 High Street, the fifth property in the acquisition.
A number of major residential developments to pop up in the Downtown Boston area in recent years — including Radian, located across the street, Millennium Place and One Greenway — has drawn an influx of thousands of residents.
“You see more and more people wanting to live and work here, so there’s more capital willing to invest and it is attracting debt capital,” Cassum said. “Whenever there’s a nice project these lenders are very aggressive in pursuing it.”
The property was part of Blackstone’s Greater Boston property portfolio, which it acquired with its $39bn purchase of Equity Office Properties Trust in 2007 — and has been steadily unloading. The 125 Summer Street building is located in Boston’s Financial District, near Government Center, Faneuil Hall and the Seaport District, with tenants including Burns & Levinson, Sunstein Kann Murphy, and Gartner.
Among other recent deals, Guggenheim last week provided a $78m loan to MetLife and M&J Wilkow for the joint venture’s acquisition of Magnolia Park in Greenville, South Carolina.