The building is 21 stories and is located in the heart of Boston’s Financial District. The 350,534 SF property is a free-standing office tower near multiple public transit options, including inner city commuter lines, Amtrak trains, ferry service connecting with Boston Logan’s airport and major highways like I-93 and I-90. The office building offers unobstructed views of Boston Harbor, as well as a ground floor with retail stores that occupy an entire block in Boston’s most dynamic area. In addition, it is close to most desirable office complexes in the city, The Langham Hotel, one of the city’s most prestigious hotels, as well as walking distance to the new High Street Place, which will host over 20 food vendors once the hall is finalized.
The property fits well with Allianz Real Estate’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. Despite the COVID-19 pandemic, Boston continues to be one of the most desirable and liquid investment markets in the country. At the same time, Franklin Street continues to attract tenants from a wide variety of industries. Currently, the asset has an occupancy rate of 96.5% with a diverse roster of 36 tenants. The two largest tenants - a law firm and a bank - have long term contracts in place and no other tenant has more than 5% of the leasable area.
Mike Cale, Co-head of US Debt, Allianz Real Estate added: “2020 has proven to be a difficult but dynamic year. 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 24x7 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 loan on 265 Franklin reaffirms our commitment to US prime locations while keeping the focus on long term investment objectives. This core asset will contribute to the resilience of our portfolio, especially during the next 12-18 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,” said Christoph Donner, CEO of Allianz Real Estate of America.
Tony Leonard Managing Director of Clarendon Properties added: “We are delighted to have completed the refinancing of 265, Franklin Street with Allianz Real Estate. This continues a great working relationship we have established with them over a number of years. We are indeed appreciative, to all at Allianz, for their fulsome support, to the joint venture Partnership, particularly in these unprecedented times.”