posted on February 28, 2011 15:52
February 28, 2011 By Joe Clements
BOSTON-An imposing 540-space parking garage in Chinatown is being auctioned off this week in an event prompted by Charles River Realty Investors. CRRI took over a $17.1 million loan on 40 Beach St. in late 2010 and is now foreclosing on the 161,000-sf structure whose 4,000 sf of retail enhances "significant" parking revenue, relays auctioneer Daniel P. McLaughlin.
"It's a great opportunity to own an entire city block for long-term higher-and-better use that is an existing cash-flowing opportunity in a proven location," says the founder of Boston-based Daniel P. McLaughlin & Co. The 2 p.m. assemblage on Friday at 40 Beach St. is slated to cap an eclectic week of auction action for the industry veteran who now counts more than 13,000 gavelings in a 22-year career. Rarely, he says, has the clamor been so widespread as it has on 40 Beach St., with inquiries nationally from garage enthusiasts, land-bankers and cash-flowing adherents. Multiple local players are also rumored to be circling the property as A-Day approaches. "It's special," says McLaughlin, who declined to identify pre-registrants or inquiries.
McLaughlin also begged off speculation that CRRI will stand firm and outbid the competition, perhaps opting to hold onto the asset if pricing is not sufficient. The X factor in that equation, according to market experts, is how much of a discount CRRI might have secured in taking the loan from Hypo Real Estate Capital Group, as initially detailed by The Real Reporter in its Dec. 10th, 2010 issue. Current owner Centremark Properties bought 40 Beach St. in June 2007 for $17.9 million, backed by the $17.1 million loan from Quadra Realty Trust Inc. that was later taken over by Hypo.
If steep enough, CRRI could still reap a reasonable return even if the note trades near or at par, points out one investor, who like everyone else spoken to could not hazard a guess on CRRI's pricing. CRRI Managing Director Bryan J. Clancy was reticent to provide any direction beyond vaguely offering that when the loan became available, "we thought it was a good buy," a notion further inspired by capital improvements made under the current ownership that at one point included Lehman Brothers.
In terms of strategy on Friday, Clancy would only say that "we will make our assessment as the process unfolds."
McLaughlin says he anticipates a "lively" event, adding that the program is part of a recent uptick of commercial properties being auctioned that are valued between $5 million and $25 million. Friday will be started by an 11 a.m. gathering in Wellesley separately pitching four residential lots in a subdivision that has seen several multi-million dollar purchases. Needham Bank is fomenting that event that is offering lots ranging from 15,000 to 27,000 sf on trendy Polaris Circle.
On Thursday, McLaughlin is scheduled to auction a 40,000-sf office building at 42 Thomas Patten Dr. in Randolph, an asset that he says holds promise given a location where Routes 24 and 139 connect. The prior day at 10 a.m., the Davis Cos. has scheduled McLaughlin to peddle 22 condominiums and rights to develop another 21 units at the DNA Lofts at 944 Dorchester Ave. in Dorchester. "We're encouraged," McLaughlin says of the pace in the opening frame of 2011. The activity follows a lull of residential auctions last autumn that was partly blamed on the robo-signing scandal that hit several major banks and lenders.