Boston group purchases IBM building 28-story office tower at 100 E. Pratt St. sells for $137 million

Record price in Baltimore

Building's location near Inner Harbor was factor in pricing

Commercial real estate

October 24, 1997|By Kevin L. McQuaid | Kevin L. McQuaid,SUN STAFF

A Boston-based real estate investment trust has completed the $137 million purchase from IBM of one of downtown's signature skyscrapers, the trust announced yesterday.

The price Boston Properties Inc. paid for the 28-story office tower at 100 E. Pratt St. set a record for the sale of a single Baltimore office building and represents the zenith of the area's 4-year-old commercial real estate recovery.

The only other commercial real estate sale of $100 million in Baltimore came in 1984, when a New York investment group spent that much to purchase the 35-story USF&G Tower at 100 Light St., which was then the insurer's headquarters.

Local commercial real estate analysts said the sale price stems from anticipated continued white-collar job growth downtown, rising rental rates and declining vacancies, as well as the building's size, age and location -- across from the Inner Harbor.

For Boston Properties, the transaction marks its third major office tower acquisition since completing a $785 million initial stock offering in June.

The REIT, chaired by publishing magnate Mortimer Zuckerman, has invested $667 million since the offering in an attempt to augment its portfolio of 77 office, industrial, hotel and garage properties. Its other major purchases were of office buildings in midtown Manhattan.

The Pratt Street acquisition "is consistent with Boston Properties' growth strategy to invest in high-quality properties in premier locations, primarily in our region, which extends from New England through the Mid-Atlantic states," said Edward H. Linde, Boston Properties president and chief executive.

The tower marks Boston Properties' first major purchase in the Baltimore area, although the REIT also owns Democracy Center in Bethesda, and it led a joint venture in developing the $126 million headquarters for the U.S. Health Care Financing Administration in Woodlawn.

Boston Properties intends to manage the building from its Washington office, the company said.

Completed in two phases beginning in the mid-1970s, the 650,000-square-foot skyscraper is fully leased and occupied by T. Rowe Price Associates Inc., IBM Corp., Merrill Lynch & Co. Inc., PaineWebber, law firm Tydings & Rosenberg, American Credit Indemnity, Prime Retail Inc. and Fidelity & Guaranty Life Insurance Co.

The building "is Baltimore's premier location at the center of the Inner Harbor," said Walter D. Pinkard Jr., president of Colliers Pinkard, the Baltimore real estate firm IBM retained to sell the project. "The building has a wonderful tenant roster, reflective of its superior design and amenity package."

IBM Corp., which sold the building to Boston Properties, has been working to unload real estate holdings for the past several years in an attempt to focus on its core computer business. The Armonk, N.Y., computer giant also has been shrinking its presence in the building for the past several years, and now occupies just one floor there.

Pub Date: 10/24/97

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