Allianz Refinances Boston Office Building with $150M Loan
A joint venture between Clarendon Properties and a BlackRock-affiliated fund vehicle have nabbed $150 million from Allianz to refinance an office tower at 265 Franklin Street in Boston’s Financial District, Allianz announced today.
The loan retires existing debt on the 21-story, roughly 350,500-square-foot office tower in one of Boston’s most attractive and robust office submarkets.
Allianz stated in an announcement that the debt placement aligns with the firm’s “focus on investing in core assets. It offers stable cash flows over the long term with revenue upside potential given the current rents compared to market.”
“[This year] has proven to be a difficult but dynamic year,” Mike Cale, Allianz Real Estate’s co-head of debt, said in a statement. “We have continued to complete transactions with existing clients as well as expand our institutional client base. This transaction represents a key part of that strategy by enhancing our footprint in the US in 24/7 cities, like Boston, that offer long-term growth opportunities despite the crisis. A stand-alone office building in the intersection of major transportation options, hotels, and retail offerings is an opportunity to be part of Boston’s most dynamic area at the heart of its financial center.”
The property is 96.5 percent leased to 36 tenants, the two largest being a legal tenant and a bank, while no other tenant within the asset occupies more than 5 percent of its leasable space, as per Allianz. It also includes ground-floor retail space that wraps around the entire block in which the tower is located.
It’s location puts it right on the waterfront across from Logan International Airport and near a handful of ferry terminals — such as Long Wharf North and South and Rowes Wharf — and other public transit offerings. The tower is also a short walk away from the new High Street Place food hall at 100 High Street, which hasn’t yet opened but will sport more than 20 vendors once it does.
“The loan on 265 Franklin reaffirms our commitment to US prime locations while keeping the focus on long term investment objectives,” Allianz Real Estate of America CEO Christoph Donner said in a statement. “This core asset will contribute to the resilience of our portfolio, especially during the next 12 [to] 18 months while the US is working through the COVID-19 pandemic. Properties in the center of Boston’s downtown financial district will continue to remain relevant, both as a place to work and as an investment opportunity.”