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Debt & Equity

Allianz funds $150M refi on BlackRock/Clarendon property

Allianz Real Estate, acting on behalf of several Allianz Group companies, has signed an agreement with a joint venture partnership between Clarendon Properties and a fund managed by BlackRock, to refinance a loan on 265 Franklin Street amounting to $150 million.

The building is 21 stories and is located in the heart of Boston’s Financial District.

The 350,534 s/f property is a free-standing office tower near multiple public transit options with unobstructed views of Boston Harbor, as well as a ground floor with retail stores that occupy an entire block.

The property fits well with Allianz Real Estate’s focus on investing in core assets. It offers stable cash flows over the long term with revenue upside potential given the current rents compared to market.

Despite the COVID-19 pandemic, Boston continues to be one of the most desirable and liquid investment markets in the country. At the same time, Franklin Street continues to attract tenants from a wide variety of industries.

Currently, the asset has an occupancy rate of 96.5 percent with a diverse roster of 36 tenants. The two largest tenants – a law firm and a bank – have long term contracts in place and no other tenant has more than 5% of the leasable area.

Mike Cale, Co-head of US Debt, Allianz Real Estate added: “2020 has proven to be a difficult but dynamic year. We have continued to complete transactions with existing clients as well as expand our institutional client base. This transaction represents a key part of that strategy by enhancing our footprint in the US in 24×7 cities, like Boston, that offer long-term growth opportunities despite the crisis. A stand-alone office building in the intersection of major transportation options, hotels, and retail offerings is an opportunity to be part of Boston’s most dynamic area at the heart of its financial center.”

“The loan on 265 Franklin reaffirms our commitment to US prime locations while keeping the focus on long term investment objectives. This core asset will contribute to the resilience of our portfolio, especially during the next 12-18 months while the US is working through the Covid-19 pandemic. Properties in the center of Boston’s downtown financial district will continue to remain relevant, both as a place to work and as an investment opportunity,” said Christoph Donner, CEO of Allianz Real Estate of America.

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