Verizon Takes Another Shot at HQ Sale

BOSTON-Verizon Communications Inc. is taking another stab at selling its landmark headquarters building here, with the firm said to be hiring CB Richard Ellis to market the 18-story, 875,000-sf structure. Verizon had retained the Staubach Co. last summer to handle the disposition, but reportedly was unmoved by the bids tendered and scrapped the process late last year.

Some observers claim the initial effort generated substantial interest among the region’s top real estate development firms. “I thought Staubach did a great job,” says one Boston investor whose firm submitted a bid, while another source claimed there were as many as 17 offers filed. Various factors supposedly kept pricing down, including a fortress-like design featuring massive 50,000-sf floor plates and imposing interior columns that make it difficult to reposition as a multi-tenanted building. Redevelopment of the historic building is likely the only option, most agree. Also, Verizon supposedly needs to keep partial ownership to accommodate telecommunications equipment, making clear title harder to secure.

“It’s a very complicated deal,” says one source who surmises that Verizon did not take those issues into account when establishing a price minimum. The property was also pitched in the heat of the investment sales meltdown that began just as marketing commenced. By some estimates, Verizon was looking for more than $100 million above what the offers submitted, said to be running in the low $200-million range. Staubach officials declined comment on the matter when contacted by GlobeSt.com.

Although the Boston office of CBRE will participate in the process, observers claim the endeavor is being spearheaded by a New York City team that recently completed the sale of 375 Pearl St. in Manhattan on behalf of Verizon New York. That 32-story tower fetched $172.5 million, or about $185 per sf, from a partnership of Taconic Investment Partners and Square Mile Capital. CBRE brokers orchestrating the Pearl Street deal were Robert Alexander, William Shanahan and Robert Stillman. Calls to CBRE’s Boston and New York offices were not returned, while Verizon officials also did not respond by deadline.

As for the new marketing program, the investor who previously bid on 185 Franklin St. says the firm will likely again pursue the opportunity. “It could be a very interesting play,” says the source, citing the location and ability to deliver space quickly to a tight market. The source did, however, express doubts that Verizon will receive a markedly higher price than it did in the earlier effort. “If anything, you’d think it would be lower,” says the investor, citing the austere financial climate and increased cost of debt going into the new year.