New Boston Fund Sells Leading Office Building in Hartford

Boston real estate firm reaps significant returns for investors; eyes additional real estate deals in Connecticut


BOSTON, Aug. 23, 2004 - New Boston Fund, a Boston-based real estate investment, development and management firm, today announced that it has sold 280 Trumbull St., a 29-story office tower in Hartford, Conn., to Grunberg Realty of New York City for $65 million, and added that it will continue to seek a series of real estate deals in Connecticut in the coming months.

CB Richard Ellis served as the broker for New Boston Fund and Dow & Condon Colliers represented Grunberg. New Boston Fund, which purchased the 670,000-square-foot-office tower in the spring of 2001 for $45 million, cited an attractive seller`s market as the primary reason for the sale.

"This was the ideal time to take advantage of current market conditions, most notably the prices being paid for quality real estate," said New Boston Fund President Jerry Rappaport Jr. "There has been a significant amount of competition for credit tenants. We created significant value by purchasing an office condominium interest and ground lease, and did not want to confront a major lease rollover in half of the building two years from now."

The Trumbull Street building enjoys a 94 percent occupancy rate at a time when the rest of the city has an 81 percent occupancy rate for commercial buildings. "It is clearly one of Hartford`s signature office buildings with terrific access to Interstate 91 and 84 and other amenities," said Bill Fenn, vice president and Connecticut regional asset manager for New Boston Fund.

The building houses 20 tenants, including lead tenants Prudential Financial and the law firm of Robinson & Cole, as well as UPS Capital, O`Connell Flaherty & Attmore and Cushman & Wakefield. After originally acquiring the building, New Boston Fund added significant value to the asset by purchasing the top three floors of the building, which were owned and occupied by Robinson & Cole through a condominium interest. Robinson & Cole then leased back 132,000 square feet and extended for a 15-year term.

During its time as building owner, New Boston Fund oversaw several building enhancements, including upgrades to the heating and ventilation/air-conditioning system, improvements to common areas, installation of a new security system, and the restacking of nine floors.

Meanwhile, Fenn said New Boston Fund expects to pursue several real estate assets in Connecticut in the coming months. The firm is in the final stages of raising $400 million for New Boston Fund Real Estate Investment Fund VI, a commingled investment fund that plans to buy $1.2 billion in real estate assets.

"New Boston Fund has $1.2 billion of buying power, and we expect to purchase $100 to $300 million of properties in Connecticut over the next three to four years," said Fenn. "In addition, we are pursuing ground-up development and joint venture investment opportunities in the market."

New Boston Fund, which owns 26 buildings tallying 2.2 million square feet in Connecticut, is one of the state`s largest private owners of commercial property.

As part of its original investment rationale in 280 Trumbull St., New Boston Fund purchased the building three years ago at 40 percent of replacement cost. New Boston Fund originally acquired the building through New Boston Real Estate Investment Fund V, a $260 million private investment fund.

About New Boston Fund
Based in Boston, New Boston Fund is one of the fastest growing private real estate investment, development and management firms in New England. Founded in 1993 by the Rappaport family of Boston, New Boston Fund owns and manages more than 14 million square feet of commercial real estate worth more than $1.4 billion.