Boston University has reached an agreement to enter into a long-term ground lease for nine Kenmore Square properties with Related Real Estate Fund II. Related Beal, a real estate developer with deep Boston roots, will redevelop the buildings.
The deal, expected to close in the fall, includes the sale of 310,000 square feet of commercial space on the north side of the square, from 648 Beacon Street to 541 Commonwealth Avenue, as well as 11-19 Deerfield Street. The buildings include 660 Beacon Street, which houses the Barnes & Noble at BU bookstore. The price has not been disclosed.
University President Robert A. Brown says the sale of the buildings presents opportunities to realize a larger vision for the neighborhood and to raise capital for the University’s core mission of teaching, research, and student services.
“For decades, Boston University has sought to improve Kenmore Square, with the goal of making it a safe, appealing, vibrant city hub that complements our campus,” Brown says. “Our earlier strategy was to acquire properties and set a standard for the tenants in the square. The success of this approach has made the square more attractive to our students, the community, tenants, and developers. The sale of the properties in what we have called the North Parcel to Related Beal has initiated the next stage of the development of the square. Development by Related Beal will make Kenmore Square even more attractive as a venue for retail and innovation, and as a livable neighborhood adjacent to a major university. We look forward to working with Related Beal to help realize this vision.”
Gary Nicksa, BU senior vice president for operations, says he hopes community concerns about the future of Kenmore Square will subside with news that the buyer is Related Beal, which he describes as “a very high-quality firm with extensive experience in Boston.”
“We have a strong history of creating mixed-use destinations that activate spaces with great potential, and we’ve done that throughout Boston,” says Kimberly Sherman Stamler, Related Beal president. “This is a fantastic neighborhood that has a combination of different users—you have the University, the sports fans, the local residents, and people that are attracted to Kenmore as tourists, as employers.”
Nicksa says the buildings in Kenmore Square housing the bookstore, University offices, and the Center for Anxiety & Related Disorders will be leased back to BU for two years while Related Beal plans the redevelopment of the square and the University decides where to house these units. One option is to remain a tenant in the square. Also to be decided is the future of the US Post Office at 11 Deerfield Street.
The Beal Companies first formed in Boston in 1888, and after collaborating on numerous projects, joined forces with the national Related Companies in 2013 to form Related Beal. Most recently, the firm has focused on the Lovejoy Wharf project near North Station, including the new Converse headquarters.
Nicksa says the University began investing in Kenmore Square properties largely as a defensive measure in the early 1980s, when the area was in decline. None of the properties being sold are considered essential teaching, residential, or student life spaces, he says, and because they are zoned for commercial use, they are not included in BU’s Institutional Master Plan.
He also notes that while BU is selling the buildings, it is only leasing the land to Related Beal, much as it did with properties on the south side of Kenmore Square. That means the University will have a hand in the development of the area for many decades to come. With this agreement, the planning process can begin, including consideration of the Citgo sign atop 660 Beacon Street.