Notable sale transactions this year, with the exception of One Brigham Circle and 10 Brookline Place West, have been anemic. These two each sold in the $100 million range. Additionally, a number of investors placed bids on the Hancock Tower, which is reported to command over $900 million.
In the burbs activity has been centered on owner-occupier transactions. The availability of vacant and distressed buildings that can be acquired for significant discounts has spurred a renewed interest in buying. Tenants evaluating lease versus own strategies are unquestionably realizing the benefits of ownership.
In Westborough, eClinicalWorks purchased 2 Technology Drive for $4.6 million, or $45 PSF which is a 70% discount to the previous sale. The company was in the market for new HQ space and recognized that as a private company in this environment buying made economic sense. Also in Westborough, Kraft Group subsidiary Rand Whitney Container bought a 200,000 square foot industrial building at 125 Fisher Street for just over $3.7 million or $19 PSF.
A REO transaction in Chelmsford occurred when Hittite Microwave Corporation purchased 2 Elizabeth Drive for $3.3 million or $31 PSF. In 2006 the property sold for $12.1 million to an investor.
Looking ahead, well-capitalized users of single-tenant buildings need to consider the proposed FASB lease accounting rule changes. This will require companies to record the full value of leases on their balance sheets as a liability. Due to the myriad complications of carrying a lease as a liability on your balance sheet, it might make more sense from a business perspective to buy.