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BANKER & TRADESMAN - The Davis Cos. Buy Burlington Woods Buildings For $33M

May 11, 2010

 
The Davis Cos. bought the bulk of the Burlington Woods office park at a foreclosure auction today for $33 million.

The sale came nearly three hours after JJ Manning Auctioneers began foreclosure proceedings. GE Capital, the lender on the 290,000-square-foot Class A office park, initially won back the buildings at 1, 2 and 3 Burlington Woods Drive.

After winning the three properties, though, GE put the park up for auction as a unit, starting at $36.85 million. When there were no takers, GE offered up the park's two large assets, buildings 1 and 3, which Davis snatched up. There were no other bidders for the two properties. GE will take ownership of the 27,000-square-foot property at 2 Burlington Woods Drive.
 

"This is a very mature, very high-quality park in a great location," Jonathan Davis, CEO of the Davis Cos., told Banker & Tradesman. He said the properties present "some leasing challenges" in the short term, but said they sold for less than half their replacement cost.

GE foreclosed on Griffith Properties, a developer that has its corporate headquarters in the park. Griffith purchased the office properties at 1, 2 and 3 Burlington Woods in June 2007 for $66.6 million, or approximately $230 per square foot. GE Capital supplied Griffith with a $55.7 million acquisition loan.

Davis took the two buildings, with a combined size of 264,000 square feet, at a 35 percent discount to GE's debt. He paid just $125 per-square-foot.

The auction win is Davis' second in two weeks. He recently paid $13.51 million for 41 unsold units at the Audubon Park condominium development in Boston's Fenway neighborhood. Before the Audubon Park auction, Davis said he'd gone roughly four years, and attended more than a dozen foreclosure auctions, without winning one.