Dealmaker: LaSalle, L3 Capital Acquire Downtown Boston Mixed-Use Asset

LaSalle Investment Management, Chicago, acquired a majority equity interest in 399 Washington Street, a 77,000-square-foot mixed-use property in downtown Boston.

LaSalle Income & Growth Fund VII Fund VII partnered with L3 Capital, Chicago, which will act as operating partner, to buy the asset for $63.25 million in an off-market transaction. Colliers International will serve as property leasing agent.

Once home to a Barnes & Noble store, six-story 399 Washington Street has remained vacant for 10 years even as its Downtown Crossing submarket dramatically improved.

Eastern Consolidated, New York, brokered the deal. Eastern Consolidated Director Evan Papanastasiou represented the seller and Senior Managing Director and Principal Adelaide Polsinelli procured the buyer.

“National investors clearly view the Boston retail market to be valuable and were more bullish on the property’s retail and creative office potential than the local investors,” Polsinelli said.

The property is located along the Washington Street corridor near the Downtown Crossing commuter rail station. Millennium Tower–downtown Boston’s tallest residential building with 442 condominiums–recently delivered directly across the street.

“The institutional and international investment climate in Boston has drastically changed in the last few years as it has become a top-tier city for capital preservation,” Papanastasiou said. “Boston has become attractive to national investors because it has one of the best medical and university systems in the world and the job market has never been stronger as Cambridge has become a mini-Silicon Valley and companies like GE and Vertex having relocated their headquarters to the city.”