A joint venture between Saracen Properties and Maryland-based Artemis Real Estate Partners, called Artemis Saracen Investments, secured a $40.8 million first mortgage from Mesa West Capital for the repositioning of a historic 12-building office campus in Maynard, Mass., Commercial Observer can first report.
The partnership is using the proceeds of the three-year loan for its capital improvement and leasing plans at the 50-acre property, formerly known as Clock Tower Place. The financing package—which is the first transaction between Saracen, Artemis and Mesa West—allows for two one-year extension options and carries a floating rate. Jay Marshall, a senior managing director in HFF‘s New York City office, arranged the deal which closed last month.
Travis Powell, the principal at Massachusetts-based Saracen and a representative for Artemis Saracen Investments, told CO that the partnership would put about $20 million into repositioning the buildings, while the rest of the financing would be spent on tenant improvements. The development team branded the project Mill & Main.
What made Mesa West comfortable with the financing was the joint venture’s “keen knowledge of the area and its plan at the property,” according to Daniel Tanner, a vice president in the lending firm’s New York City office.
“The Artemis/Saracen team has a unique vision for this property, which will allow them to transform it into one of the most distinctive and highly amenitized mixed-use developments in the area,” he said in prepared remarks provided exclusively to CO. “Given their successful background executing business plans in the Boston metro area, we’re confident in their ability to deliver once again.”
Mr. Tanner added, “Artemis and Saracen have already started to make headway at the property, and our loan is customized to allow them to continue their effort to reposition and lease up the asset.”
Artemis Saracen Investments acquired the property through a deed in lieu of foreclosure in March 2015. The joint venture purchased the original defaulted mortgage from J.P. Morgan Chase for $13 million the month prior.
“The opportunity had scale,” Mr. Powell said. “It was somewhat of a troubled asset, and we thought it was in a unique, neat little New England mill town, and we had the ability to affect the town quite a bit.”
The complex, which was originally constructed in 1847, housed the headquarters of computer manufacturer Digital Equipment Corporation in “their heyday from 1957 to the ’90s,” according to the development’s website. (Compaq purchased the company in the late 1990s for $9.6 billion.)
When Artemis Saracen bought the property, there was a total of 60 tenants occupying about 250,000 square feet in the 1.1-million-square-foot office space.
Physical upgrades to the property and leasing have already begun, Mr. Powell said, pointing to soon-to-be tenant Battle Road Brewing, a Massachusetts-based craft beer company run by Whole House Group. The firm signed a lease for a 12,000-square-foot pub and brewery in Building 5 of Mill & Main and will be opening shop this summer.
Whole House Group is taking over the on-site cafeteria and will provide breakfast, lunch and dinner options for tenants, as well as catering, he added.
In July 2015, Stratus Technologies signed a 102,321-square-foot lease in Building 5 as well and will move into its space this April, according to the developer’s website.
“We don’t lose sight that office users are very much an economic engine, but all those creative tenants today are very aware of the live-work-and-play environment and want to have a creative, productive space,” Mr. Powell said.