Campanelli, TriGate Add 300,000 SF in $12.6M Buy
CHELMSFORD -As underscored in two new commitments unveiled this week, Campanelli and TriGate Capital would seemingly have plenty of work to do repositioning Heritage Landing in North Quincy, but even as lease-up and renovation campaigns chug along at that two-building property bought last year, the partnership has now heaped another substantial suburban portfolio onto their plate via the $12.6 million purchase of three Class B flex and office buildings here and another in Acton that were foreclosed on following the 2008 recession. Backed by $16.1 million from Blue Hills Bank, the partners bought the 300,000-sf mix of flex and office space through C-III Realty and NAl/Hunneman Commercial Co., which served as exclusive agent on behalf of Wells Fargo Bank and procured the buyer.
“I’m sure they will do well with it, like always.” one market watcher says of the partnership which has spent this decade scooping under performing assets throughout southern New England and using Campanelli’s in-house construction expertise for additional efficiencies before often opting to harvest the buildings for a substantial profit. Most recently, Campanelli and TriGate struck a deal with Jumbo Capital on a portfolio of buildings in Canton and Dedham that had undergone that had undergone that transformation. Those buildings bought for an aggregate of $11.1 mil lion were sold to Jumbo in December for $14.5 million.
Campanelli principals declined comment on the latest conquest involving 25 Industrial Rd., and 220 and 222 Mill Rd. plus 289 Great Rd. in Acton, that an 86,000-sf structure known as Strawberry Hill. NAI/Hunneman Commercial Co. Capital Markets team members did not respond to inquiries as of press deadline. According to marketing materials obtained by the Real Reporter, the campaign was handled by NAI/Hunneman brokers Gina Barroso, Scott Dragos, Douglas Jacoby, Michael McLaughlin and David Ross.
Despite the lack of official response, Middlesex County Registry of Deeds records show the exchange has occurred, culminating almost two years after Wells Fargo Banlc foreclosed on the CMBS loan that had weighted the assets down in a difficult suburban office climate, especial ly in fringe communities. At face value, the acquisitions would appear to have traded at a deep discount considered the assets were acquired for a whopping $27.0 million in Dec. 2004.
According to market watchers, the portfolio received a warm reception among yield-oriented capital, a constituency that has had only limited opportunities to secure product of any size. “There were a ton of people going through them,” says one observer who maintains so many suitors reacted they were occasionally bumping into each other at showings. “Everybody wants value-add, but there really hasn’t been a lot of that coming around,” says a CRE expert who attributes the limits to a region which was not as inundated with foreclosures that can be had for pennies on the dollar in many parts of the US.
While forced to pay an aggressive rate to stave off competitors, Campanelli and TriGate “still got it very inexpensively,” according to one suburban specialist who says the discounted pricing and financing from Blue Hills Bank should enable the new owners to invest the funding necessary to attract interest. One of the Chelmsford buildings, 220 Mill Rd., is a 51,000-sf property that lost its tenant recently.
There is cash-flow emanating from 222 Mill Rd. which is fully leased to Sycamore Networks, and 25 Industrial Rd. houses a multitude of firms that have its 49,375 sf 100 percent occupied and on staggered leases that a marketing brochure says provides the buyers “smoothed rollover risk” among its lineup that includes Camp Dresser & McKee Inc., Comcast, Konescanes Inc. and Universal Hospital Services.
Strawberry Hill has enjoyed periods of success over the years, but is two-thirds empty at present. The three-story structure has the amenities, location and quality to bear fruit for the new ownership, according to a broker active in the MetroWest submarket who notes Campanelli and TriGate took on Heritage Park totally empty and have already filled more than 23,000 sf. While in a totally different market and profile, 289 Great Rd. should benefit from the new ownership’s hands-on approach, says that broker who anticipates “they will brush things up, modernize the systems and move onto the next one.”
Given the lack of response, it is unclear who else might have pursued the proper ties, but one source claims several other bidders were “right there” with the winners. With pricing so close, the partnership’s proven ability to perform might have made the difference, that industry professional asserts. “They don’t screw around, and that goes a long way,” says the source.
Meanwhile, Campanelli and TriGate are aiming to finish up a multi-million renovation of Heritage Landing this quarter, and has several tenants already in tow for when the two buildings come available. In an announcement this week, Campanelli and officials at exclusive leasing agent Cushman & Wakefield unveiled another 8,400 in leases by Galileo Press and Johnston Associates, who split the difference space-wise, with the latter occupying this April and the former in September. Campanelli Director of Leasing Peter Brown was joined by the C&W team of Mike Frisoli, David Martel, Matt Morgan and Jason Roth in brolcering the leases.
Frisoli in a press release welcomes both firms, but calls the Johnston Associates commitment “a great success for our team” in luring a downtown Boston tenant to North Quincy, a result he attributes to “Heritage Landing’s comparable amenities, quality and accessibility to an urban office building.”
The leasing team and landlord was lauded for doing “a great job of selling their vision to us,” according to Galileo Press Managing Director Florian Zimniak. “The turnkey design and build out that Campanelli was able to offer in combination with its easily accessible location made the building an ideal option for us.”