State Street HQ in Boston Headed to Market

Boston Business Journal - October 9, 2006

One Lincoln Street could again be making an appearance on sale block and this time it could sell for more than $800 million.

Several real estate sources indicated on Monday that the majority owner, American Financial Realty Trust (NYSE: AFR), is considering selling the 1.1 million square-foot tower it bought for $705 million in February of 2004. At that time the sellers -- comprised of a joint venture including John Hynes of the Gale Co. -- doubled their money since the 36-story tower in the Financial District was built for $350 million.

Sources indicated Pennsylvania-based American Financial had hired New York-based brokerage firm, Eastdil Realty Inc.

In recent weeks, American Financial approached State Street Corp. about buying the building as part of a right of first refusal agreement it has with the building's largest tenant. The building was renamed the State Street Financial Center after its previous owners consummated a 20-year lease for the entire building with the financial services company.

It's unlikely State Street would buy the building given the extraordinary asking price the real estate investment trust is seeking, said sources. It would be among the largest deals in Boston's history should it sell for more than $800 million. The John Hancock Tower holds the record for highest price paid for a commercial tower at $910 million 2003.

American Financial Realty paid a record per-square-foot price for the tower at $671 million. By the end of 2004, the REIT sold 30 percent of its ownership stake to the Canadian real estate investment trust, IPC US Income Commercial Real Estate Investment Trust, for $60.3 million. At that time the tower was valued at $763.5 million. Sphere: Related Content