1600 Osgood Redevelopment

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1600 Osgood Street, North Andover, MA 01845

Jackie Meagher

Senior Director 781.990.0159 jackie.meagher@berkadia.com

MORTGAGE BANKING

Adam Dunn

Managing Director 617.648.4192 adam.dunn@berkadia.com

INVESTMENT SALES

THE LOCATION

INVESTMENT HIGHLIGHTS

Peter dudunakis

Financial Analyst 617.648.4180 peter.dudunakis@berkadia.com

Chris Phaneuf

Senior Managing Director 617.648.4191 chris.phaneuf@berkadia.com

The Asset

Investment Highlights

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The Location

The North Essex Suburban apartment market continues to remain undersupplied, as only 68 new units are projected to come online in the second half of 2023. At a time where population growth within the TMA is expected to grow 1.5% to 81,432 residents by 2028, the current housing inventory will not be enough to meet the needs of future North Andover residents.

Limited New Supply

Few projects of scale have historically been approved and developed in the North Essex County submarket, due to rigorous zoning laws and a challenging permitting and approval process. This partnership provides an opportunity for a new entrant to build at an allowable density that is exceedingly rare in the North Essex suburban market.

Scarcity in High-Density Construction

North Andover has a highly affluent community due to the surplus of nearby employers, excellent school systems, and proximity to Boston. Within a 1-mile radius of the property, the current household income level is $86,527 and expected to grow to $91,931 within the next 5 years. Over 42% of current households earn over $100,000 annually, demonstrating the potential for high rent growth in the area.

Desirable Community with Growing Household Income

Transportation connections include easy access to Interstate 495 via the Ward Hill Connector at Exit 106, nearby access to State Highway 125, the on-site MVRTA bus stop that connects riders to the Haverhill Commuter Rail, and less than 10 minutes to the Lawrence and Bradford MBTA Commuter Rail Stations.

Strong Connectivity to Nearby Transportation

Located only 25 minutes from Boston and proximate to the employment corridors along Interstate 495 and Route 128, the site is well served by surrounding employment nodes. Notable employers along Interstate 495 and Route 128 collectively employ over 259,150 people. Additionally, the 3.8 million-square-foot logistics facility for Amazon, slated for completion in 2023, should bring in an estimated 1,500 new jobs. With an estimated total of 1,166,700 square feet of R&D space to deliver along Route 128 within the next year, sustained commercial growth has heightened the need for new housing outside of Boston’s core.

Proximity to Greater Boston Employment Nodes

site overview

BUILDING Type Tenancy Year Built RBA Stories Typical Floor Core Factor Construction CapEx LAND Land Acres Parcels

Office Multi 1955 386,095 SF 3 128,698 SF 25% Masonry Recent upgrades include new roof, envelope and select major systems 27.00 AC NAND-000340-000017

THE ASSET

Berkadia®, a joint venture of Berkshire Hathaway and Jefferies Financial Group, is an industry leading commercial real estate company providing comprehensive capital solutions and investment sales advisory and research services for multifamily and commercial properties. Berkadia® is amongst the largest, highest rated and most respected primary, master and special servicers in the industry. This advertisement is not intended to solicit commercial mortgage loan brokerage business in Nevada. © 2023 Berkadia Real Estate Advisors LLC and Berkadia Real Estate Advisors Inc. Berkadia® and Berkadia Commercial Mortgage® are trademarks of Berkadia Commercial Mortgage LLC. Investment sales and real estate brokerage businesses are conducted exclusively by Berkadia Real Estate Advisors LLC and Berkadia Real Estate Advisors Inc. Commercial mortgage loan origination and servicing businesses are conducted exclusively by Berkadia Commercial Mortgage LLC and Berkadia Commercial Mortgage Inc. Tax credit syndication business is conducted exclusively by the Tax Credit Syndication group. For state licensing details for the above entities, visit www.berkadia.com/licensing.

Boston Office

125 High Street, Suite 1712 Boston, MA 02110

The effective rent for the North Essex submarket is $2,210 per month as of 1Q23, an appealing 6.4% annual increase from 2022. This monthly rent is 11.7% above the submarket’s five-year average of $1,891. While effective rent has grown at a substantial clip over the past five years, the submarket’s occupancy rate has remained resilient and has not fallen below 97% since 2018.

Effective Rent Growth and Occupancy Metrics

1600 Osgood Street, North Andover, MA 01845

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the location

THE ASSET

INVESTMENT HIGHLIGHTS

Boasting an A-rating on Niche.com for public schools, North Andover has been recognized for its public and private educational opportunities. There are five public schools serving the town and two prestigious private schools, Phillips Academy in Andover and Brooks School in North Andover. Higher education institutions include Merrimack College and the Northern Essex Community College-Lawrence campus.

Excellent Public and Private School Systems

The Loop at Methuen, a shopping, dining, and entertainment center, with anchor tenants including The Home Depot, Marshalls, and AMC Theatres, is within a 10-minute drive from the property. Other nearby lifestyle centers include The Mall at Rockingham Park (11.5 miles) and Tuscan Village (11.6 miles), both located in Salem, New Hampshire.

Nearby Lifestyle Centers and Amenities

The average median home price in North Andover has appreciated 57.2% to $723,000, which equates to an average monthly mortgage payment of $3,957. With an effective market rent of $2,873 for the area, renters can save a substantial $1,084 per month when choosing to rent versus own.

Compelling Rent vs. Own Dynamics

locational

Opportunity

THE OFFERING

Berkadia Real Estate Advisors has been exclusively engaged to market the redevelopment of 1600 Osgood Street in North Andover, Massachusetts. The property is approximately 27 acres with an existing office complex featuring 386,095 square feet of office and high-tech space. The property directly fronts the newly completed 3.8 million-square-foot Amazon distribution facility. The next phase of redevelopment will seek to take advantage of the unmet demand for new housing outside of Boston’s core, as professionals and families alike look for more affordable, commuter-friendly renting alternatives. The site is well located only 25 miles north of Boston and benefits from its nearby access to major transportation arteries, which include Interstate 495, State Highway 125, and Route 128. North Andover is well regarded for its excellent school systems, high quality of life, low crime, and proximity to Boston, making it an ideal location for families and professionals to call home. Given the nature of the existing improvements along with the density the subject site could support, a redevelopment featuring complementary mixed-uses would ideally be favorable for placemaking. With favorable supply and demand fundamentals and a highly affluent community, this rare opportunity can provide robust, risk-adjusted returns that are exceedingly rare in the current development landscape.

The Offering

the offering