Foreign investing in Boston commercial real estate continues at a rampant pace. Recently, Mori Trust, a Japanese investment group, purchased two prime office buildings in Back Bay--and they aren't even close to being done. The Tokyo-based group formed a subsidiary, Mori America LLC, to handle its dealings in the U.S. With the acquisition of the two office buildings, which boast Class A office space in the heart of one of the busiest areas in Boston, Mori America LLC has emerged as a major contender in the foreign investing world.
They are not alone, of course. In fact, Boston is the fifth leading U.S. city for cross-border investments as of the end of the third quarter of 2016. If you pay attention to commercial real estate news, you have certainly already noticed how many foreign firms have been investing in office and other commercial space around the city. According to reports, Mori America LLC plans to invest up to $7 billion overseas before it's all said and done, so this deal is merely the tip of the iceberg. We can expect to see their name bandied about a lot more in the near future.
As for the buildings, one is located at 10 St. James Avenue. This 19-story Class A office building was built in 2000 and offers 566,000 square feet of space. The other building is located at 75-81 Arlington Street. It stands 10 stories tall, offers 259,000 square feet of office space and was built in 1914. The buildings are joined by a shared glass galleria that connects two distinct lobbies. It includes 400 underground parking spaces, which is a major plus in a city where it is never easy to find parking.
The two buildings were previously owned by Liberty Mutual Group. The company bought the two buildings in 2006 for $490.5 million. In 2013, Liberty Mutual acquired space in a new, $300 million office tower at 157 Berkley Street. Since then, most of the company's workers have migrated over there. However, Liberty Mutual plans to retain at least some space in the buildings. It is unclear if any other major tenants are already planned, and we are unsure about the status of any other current tenants. However, office space is at a premium in the city these days, so Mori America LLC shouldn't have any trouble keeping the building occupied.
The deal was closed on January 5, 2017. Thus far, no additional news about the buildings or the acquisition has been made. We also do not know if Mori America LLC plans to acquire any additional office space buildings in Boston any time soon. What we are certain of is that they will not be the last foreign investing group to acquire commercial real estate in the city this year--not by a long shot. Check back here often to learn about additional deals like these, as they are transforming the city.
Recently, CBRE Group ranked Boston 12th in the world for foreign investing. It even beat out Tokyo on the list, which is pretty huge. Part of the reason for the popularity of the city among foreign investors is the rock-bottom vacancy rate that is currently happening. Indeed, office space around the city is hard to come by right now, so companies that own Class A office buildings are doing quite well. This trend is expected to continue for the foreseeable future. At some point, construction should help to meet demand, and vacancy rates may climb a bit. Until then, we can expect this boom in foreign investing to continue.
Are you looking for Class A office space in Boston? You can't go wrong with the Back Bay, which is where you will find these two buildings. The problem, of course, is finding vacant space that actually suits your needs. For that, Boston City Properties has you covered. We can help you get the information that you need to make a strategic decision. We also have commercial real estate experts in Back Bay who can help you identify suitable office space for your business. For more information, call Boston City Properties today.
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