Burlington Woods – I & II

BURLINGTON, MA
SF: 267,000 · Fund I · Sold 2012

Opportunity

In June 2010, The Davis Companies acquired two office buildings, totaling 267,000 SF, at a foreclosure auction for approximately 51% of the prior owner’s basis and 45% of replacement cost. The acquisition at auction greatly reduced the pool of potential buyers.

Overview

Approximately 64% occupied at acquisition, the properties benefited from an ideal location in Burlington, one of the premier Boston suburban office submarkets, located north of the city, near the intersection of Route 95/128 and Route 93 and within close proximity to a Marriott Hotel, The Burlington Mall, and Wayside Commons, a dynamic new lifestyle-oriented retail center. Neighboring offices were institutionally owned and the market has traditionally seen strong demand from technology and medical tenants.

Value Creation Strategy

The Davis Companies was able to quickly underwrite the properties prior to the auction due to its market knowledge, ownership history in the area, and pre-existing relationships with the borrower and a number of tenants. The investment strategy was to modernize Class B buildings with a Class A+ location in order to attract technology oriented tenants looking for a vibrant, well-located office environment. The Davis Companies undertook an extensive capital improvement program at Burlington Woods I to dramatically improve the lobby and common areas and bring the property up to true Class A standards. The renovation also included modest improvements to Burlington Woods III. Simultaneously, The Davis Companies executed an aggressive marketing and leasing program, increasing occupancy from 64% to 95%. The properties were sold in September 2012.