Market Recovery Aids in Repositioning Avison Young’s Boston Commercial Properties

August 15, 2011 / Elizabeth Buckley, Commercial Property Analyst

Avison Young’s New England region has benefited from a recovering market as John Fenton, the real estate company’s Principal and Managing Director in the area, said the company has successfully repositioned three large commercial properties containing 540,000 square feet in its asset-management portfolio.

Market Recovery Aids in Repositioning Avison Young’s Boston Commercial Properties

The properties are located in Downtown Boston and in the suburbs of Andover and Wilmington have also benefited from new “leasing activity and proactive management.” Avison Young opened its Boston office in fall 2010 and continues to expand its New England presence. Earlier this month, a group of brokers led by Jack Kerrigan and Steve Cook joined Avison Young to expand its service platform in the New England market. The company’s goal is to staff the office with 10 to 20 top-tier real estate professionals and expand property management and asset management services by year-end 2011.

“In the last 12 months we have executed new leases on more than 180,000 sf, or approximately one-third, of the portfolio,” said Fenton.

“In conjunction with the new leasing, each asset was recapitalized to provide a more competitive financial position in the marketplace.”

The institutional-grade assets, 299-301 Ballardvale Street in Wilmington/Andover, and 201-207 South Street and 52-56 Roland Street in Boston, were acquired between 2006 and 2007. The commercial properties underwent capital-improvement upgrades to reposition the properties during the initial phase of ownership.

“Due to the value-oriented acquisition pricing and hands-on management, these assets weathered the economic storm in 2008 and 2009,” said Fenton.

“Avison Young worked closely with its key stakeholders – the investors, the lenders and the tenants – to manage the best possible outcome for all parties.”

“In each case, the restructuring included new leasing activity, an infusion of fresh equity and term modifications on more than $50 million of first-mortgage loans to extend maturities and provide additional capital to fund the cost of new leasing,” Avison Young said.

According to the company, an uptick in leasing activity, particularly in the high-tech, manufacturing and biotech sectors aided in the repositioning of the portfolio.

Avison Young negotiated the pricing on behalf of the various property owners, and managed the construction of tenant improvements associated with more than a dozen new leases, including lease extensions at 299-301 Ballardvale with AEB (34,240 sf), GE Healthcare (23,200 sf), AEI (15,400 sf) and Protopac (15,400 sf).

In Boston, Avison Young also executed new leases for more than 20,000 sf, including 10,000 sf at 201-207 outh Street with Michael Dennis Architects, Boundless Learning and Credo Reference; and 10,000 sf at 52 Roland Street with SEIU 888.

“The financial reorganization enabled Avison Young to effectively compete for new tenant requirements in the market, which in turn stabilized property operations,” said Beth O’Donnell, Avison Young’s Director of Client Services in Boston.

The new transactions involved relocations and expansions in Downtown Boston and in the suburbs.

“We have the in-house capability to execute complex construction assignments from beginning to end
for tenants in our portfolio,” added Brian Hodess, Avison Young’s Director of Construction Services for

“Many of these deals took a long time to come together, but we delivered simultaneous projects on time and on budget.”

Late last week, Avison Young opened a newly-formed office in Los Angeles, California, which is also part of its strategy toward growth and expansion.

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