| Cathartes Renovates, Sells Fargo
Building |
Boston, MA (April 2000) Cathartes Investments and joint
partner AEW Capital Management have sold the 480,000 SF, nine-story Fargo
Building at 451 D Street, South, Boston, to Yale Properties, Inc. for 72
million dollars. Fargo is located in the emerging South Boston seaport
district. Mike Smith of Spaulding and Slye brokered the sale on behalf of
Cathartes and AEW. Rob Maashal and Steve Lipkin of Yale Properties handled the
acquisition on behalf of their firm.
Cathartes bought the property in
October 1997. It was a complicated and lengthy purchase, with substantial costs
associated with the acquisition. At the time of purchase, Fargo was in
extremely poor condition for two primary reasons: 1) the renovation performed
by the former owner in 1988 was incomplete and substandard; and 2) the bank
foreclosed on the former owner and then invested virtually no money in the
maintenance of the property. To that extent, Cathartes inherited a property
that had numerous safety code violations, a crumbling façade, dangerous
elevators, substandard HVAC and substandard and failing window systems.
David Gillies of Cathartes acted as Development Manager and Mark Barer
of Cathartes acted as Construction Manager for this project. Cathartes's goal
was to take this building, which had suffered many years of neglect, and turn
it into a modern, institutional quality office building. The renovations began
almost immediately upon acquisition. They included: installing two new
entrances at Fargo and D Streets; installing two new lobbies; elevator upgrades
and replacements; HVAC system upgrades and replacements; providing all new
tenant finishes; a complete façade restoration; replacing all the
windows; replacing the electrical system; adding 25 new bathrooms; new loading
dock facilities; new fire and life safety systems; and refurbishing and
providing new lighting for the parking lots. In addition, at the time of
purchase, the building was mostly empty and the existing tenants were paying
rents 70% below market value. Concurrent with the renovations, Spaulding &
Slye acted as the leasing agent for the property. The building now appeals to a
wide ranging tenant base, and houses such prestigious tenants as AT&T,
Bechtel Parsons Brinkerhoff, MCI/Worldcom and Altran Corporation.
"We
are very pleased with the end result, as are our tenants and the buyer," said
Gillies. "The Fargo Building, and the renovation that we undertook, required
constant management and cash. We were continually pouring money into the
rehabilitation of this project, from beginning to end." Maashal and Lipkin of
Yale add, "We're extremely pleased to have acquired this property. We believe
strongly in the neighborhood and are pleased that Cathartes did such a first
rate job on the renovations."
Cathartes Investments (www.cathartes.com)
is a real estate investment and development firm specializing in acquiring and
developing undervalued commercial, industrial and residential properties in
major North American markets. AEW Capital Management, L.P. serves as investment
advisor to major institutional investors, including corporate, public and union
pension funds, university endowments and government entities.
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