Building owners are seeing their offices fill up, leading to higher rents, which makes their properties more attractive to potential buyers. Many buildings have been the objects of bidding wars in recent months, with pension funds, insurance companies, and overseas investors competing to own a piece of the skyline.
“Boston holds a very desirable spot in global capital markets,’’ said Michael Smith, a managing director at Jones Lang LaSalle. “Many investors believe the city has weathered the recession better than other markets.’’
The volume of sales is still far from 2007, when 34 buildings changed hands for total sales of $4.9 billion. But the improvement is unmistakable after a period between 2008 and 2010 in which only 14 office buildings were sold in Boston, the kind of cold streak that causes nightmares for commercial brokers.
Just this past week, CBRE | New England closed on the sale of a five-story office building that drew more than 50 bidders, including several large financial institutions that typically focus on high-rises. The building, at 179 Lincoln St., was sold to Invesco Real Estate for $75 million.
“179 Lincoln St. is a great example of how people are viewing Boston today as one of the most attractive markets in the US,’’ said Chris Angelone, an executive vice president at CBRE | New England. “Five years ago, it might not have been an institutional buyer, but today it is.’’
Real estate specialists said underlying causes are job growth in key sectors such as health care and technology, as well as higher office rents that promise better profits with less risk than stocks and other investments. Average asking rents at top-rated buildings in Boston rose by more than 4 percent last year, to about $49 per square foot.
