Boston Properties Nixes $468M New Jersey Deal

Boston Properties has terminated its agreement to sell its Princeton, N.J., two-million-square-foot Carnegie Center portfolio to an entity affiliated with the Landis Group—the project's original developer—for $468 million. The exchange was announced on April 25, but it provided that either side could terminate the agreement at any time before June 21, 2011, without cost or payment to the other party.

Boston Properties terminated the sale, saying that it was backing out because it wasn't going to be able to close the sale by the June 21 deadline. Boston Properties won't say whether the complex will be put back on the market.

The 16-building, Class A office park is set on 560 acres on Route 1, halfway between New York City and Philadelphia. Boston Properties acquired the portfolio in 1998 and expanded the project by 300,000 square feet. The building is 86.6 percent occupied as of the company's May quarterly conference call, with a projected average occupancy of approximately 83 percent for this year.

“When we purchased the asset, we had hoped to avail ourselves of the opportunity to develop almost two million square feet of additional space, Boston Properties president Douglas T. Linde said. “The Princeton market has been very stable, but has not exhibited the conditions necessary to achieve this objective,” he explained. According to company officials, the recent termination of the agreement will not affect future development and acquisition plans.