The Founder has a deeply entrenched background in both real estate and South Boston. He has lived his entire life there and along with his family has vast roots in politics, real estate, the neighborhood and the people living in the area. The Founder began in real estate working in various aspects of projects including mixed use and built to suit, safety, assemblage, and development from permitting to completion. He has a real estate portfolio comprised of 25+ multifamily properties that he acquired almost entirely through off-market deals given his relationships and knowledge of the area.
Dorchester Ave Opportunity: An area of South Boston was granted Master Plan approval under a PDA for redevelopment along a corridor of South Boston along the Red Line train to MIT and Cambridge. The focus of this redevelopment was on Life Science and technology needs that have experienced tremendous and continuing demand as the real estate north of the river has become fairly saturated in that area. Currently the plan is earmarked for 16 million square feet of development into this area. The Founder recognized an incredible opportunity in a highly sought after are of this redevelopment zone. It was comprised of small local business owners directly between two of the train stops in this corridor.
Assemblage: Leveraging his off-market expertise, The Founder approached several business owners in the area to purchase various parcels of land that fell into this Master Plan opportunity and put them together as a larger development opportunity under the PDA.
After closing and combining the total footprint of his parcels and holdings The Founder was able to assemble approximately 5.1 acres that were approved under the redevelopment parameters to build out the Life Science and mixed use project that the local municipality had permitted for. In doing so he was able to unlock a great deal of value beyond the value of the individual parcels alone. This parcel assemblage would allow for approximately 2 million square feet of mixed use development into this footprint.
Sponsorship: In order to move forward and get further permitting to maximize the opportunity via increased height, density, mixed use percentage etc., The Founder enlisted two partners on the team. HYM was brought in to spearhead all aspects of permitting alongside The Founder with the city and Avison Young was brought in as an advisor for valuations, refinancing expertise and various intangibles. He also added family office as a partner and co-investor in the GP alongside his personal position.
Valuation “As Is”: The assemblage of land is currently valued at approximately $511 million “as is” in the current phase of permitting. The Founder and the team have the ability to build immediately in the space if desired. (Walker & Dunlap, Avison Young, CBRE valuations)
Valuation “When Permitted”: Upon confirmation of the new permitting the valuation is expected to be approximately $850 million. The permitting is expected to take roughly 12 months to complete at most and is moving along at an accelerated timeline based on initial expectations. HYM has a near perfect track record in achieving permitting approval of this nature particularly in the Boston area. (Walker & Dunlap, Avison Young valuations)
Current Capital Stack: There is $168 million dollars of total debt currently on the property in aggregate and over $250 million in current equity at the GP level after senior debt and various preferred equity holders are accounted for.
Recapitalization Opportunities: The Founder has multiple opportunities to recapitalize the capital stack given the current position and valuations as well as the timeline for permitting. He is in the position to take advantage of lower rates and revise the capital stack to reflect a much cleaner institutional ready structure. Several smaller preferred equity investors that The Founder brought in along the way are willing to accept profits immediately for various liquidity reasons and the senior debt holders are in an excellent position to be refinanced out or at substantially lower rates.
Extension of Existing Senior: In order to take advantage of all these strategic opportunities, The Founder has extended the existing senior debt for a term of 120 days to allow time to utilize the best possible course of action on the recapitalization of the project.