Boston Back Bay, Massachusetts
Site Demolition, Ground-Up Development
Joint Venture Capital, Mezzanine Financing, Partnership Interest, Asset Management
about the project
So, what do you do when presented with an impossibly tight, irregularly shaped site with poor soil conditions, difficult construction execution, a complicated financial structure, and ambiguous market conditions… well, you buy it, of course!
…and figure it out.
It’s difficult to imagine now, but at the time Geoff Beer and his employer, Starwood Capital Group, committed to finance the development of Trinity Place in Boston’s Back Bay, it had been over a decade since a condominium tower had been constructed in the city, the nation’s 6th largest metropolitan area, and one accustomed to high-rise living. Material doubts made the Investment Committee uneasy:
- Had it become too expensive to develop new supply in Boston?
- Was the financial risk justified and priced appropriately, given the perilous project execution?
- Was residential demand fleeing to the suburbs? Or was the timing perfect to capture pent-up demand?
It turned out to be perfect timing, but that was far from obvious at the time.
Ultimately, confidence in the project’s place, plan and people prevailed, and in partnership with Boston developer, Raymond Property Company (RPC), the 18-story condominium tower was completed in 2000.
As the adage goes, location begets success or failure and the prime, but tiny, infill parcel overlooking iconic Copley Square was fundamental to the former. The ½-acre, triangular site sat directly between the 1891-vintage Copley Square Hotel and the 1858-vintage, National Historic Landmark (NHL)-listed Boston Public Library, making foundation work on the new tower a challenge of historic proportions (pun intended).
But it was worth it. Rounding out the location’s enviable attributes were magnificent views of the Fairmont Copley Plaza Hotel, which received its first guests in 1912, and the exquisite, NHL-listed Trinity Church, which began holding services in 1877. The church’s “Richardsonian Romanesque” heavy stone facades and rounded arches, accented by John La Farge interior murals and novel stained-glass windows, are reasons it is listed on the American Institute of Architects’ (AIA) “Ten Most Significant Buildings in the United States.” Now, that’s a Top Ten list you want to be on!
Still further gems could be unearthed with just a few steps on the Fitbit, like the Old South Church, an NHL-listed, Gothic Revival master work built in 1873; Newbury Street, Boston’s fashionable shopping and dining destination; the since-renamed John Hancock Tower, Boston’s tallest skyscraper; and Copley Place, a modern offering with two-levels of designer stores, two full-service hotels, and four office buildings. For all of that, you take a chance on Back Bay’s reclaimed tidal mud flats.
Geoff created and negotiated the tax-advantaged financial structure for the project and then provided asset management services throughout its duration. A senior loan was provided by Bank of Boston, a two-tiered mezzanine loan was provided Starwood Capital Group, and project equity was provided by RPC.
The Childs Bertman Tecksaris (CBT)-designed beauty is a tripartite composition consisting of base, center, and top sections inspired by the adjacent and near-adjacent historic landmarks. To stand apart from the taller, rectangular office buildings nearby, Trinity Place was given a limestone-finished, pre-cast concrete façade and a steeply pitched roof, which provided residential heft and character.
As is the case in most urban cores, uncommon and substantial problems were encountered and overcome during the development process, including:
- Demolition of a 6-story, Class C office building immediately adjacent to a venerable and operational hotel, built in the late 19th
- Excavation and construction of the building’s unique “bathtub” foundation and 3-level underground parking garage, which were engineered to adapt to the Back Bay’s gravel-filled tidal basin.
- Protection of people and property in close proximity to heavy equipment operating on an extremely compact site, adjacent to a ramp/tunnel to the Massachusetts Turnpike, which had to remain in service during construction.
- Creation of a design that respected the architectural legacy of Boston’s most celebrated landmark building, the H. H. Richardson-designed Trinity Church, the inspiration for the project’s name.
- Resolution and recovery of unexpected archeological discoveries, specifically Native American fish weirs, which are fence-like structures of wood and brush up to 5,000 years old, erected in tidal flats to catch smelt and herring.
- Negotiation of a Project Labor Agreement with Boston’s local trade unions, an especially important task given a United Brotherhood of Carpenters strike was expected to occur during construction.
- Implementation of a complex capital stack involving two tiers of participating mezzanine debt in order to protect Starwood’s pension fund clients from Unrelated Business Taxable Income (“UBTI”), while still maintaining equity-like returns.
So how did it all work out? Well, let’s just say the financial returns, like Trinity Church, were heavenly and the $70 million (uninflated cost) luxury building opened to enthusiastic reviews from new residents, business leaders, and the real estate media alike. It experienced brisk sales and all 104 units were pre-sold before completion of construction.
In addition, the ground floor of the 250,000 GSF mixed-use project, which consisted of commercial space, was fully leased, primarily to one of the most highly rated Italian fine dining restaurants in Boston, much to the surprise and delight of the tower’s new residents, who were lobbying for its arrival.