Brown paid $39.4M for 7 properties

Brown University paid more than $39 million for the seven Jewelry District properties it bought as a package from Belvoir Properties, city records show, highlighting the continuing appreciation of buildings in that section of Providence.
The deal, announced in October as one of Brown’s largest acquisitions ever, closed Jan. 4, records provided by The Warren Group show. It involved some of the area’s most valuable commercial properties, including One Davol Square, 10 Davol Square, and 222 Richmond St. and its 400-car parking garage.
In addition, Brown bought the building that houses the R.I. Department of Business Regulation, 233 Richmond St., and smaller office buildings at 196 Richmond St., 339 Eddy St. and 349 Eddy St. Altogether, the seven properties were assessed by the city at $23.8 million.
Brown paid a combined $39.4 million, city records show, paying more than the assessed value for all but two properties – One Davol Square, which was sold for the $6.2 million it was assessed at, and 233 Richmond St., which was sold for $1.
By far the most valuable part of the deal was 222 Richmond St., which was sold for $23.2 million, more than double its $10.2 million assessed value.
James Winoker, CEO of Belvoir Properties, wouldn’t comment on the numbers. Asked why the buildings had been sold, he said the university had a need for the properties, and he was “more than happy to accommodate.” A Brown alumnus and a trustee from 1986 to 1991, Winoker also said that Brown would continue to grow and develop jobs in the neighborhood.
“I think that Brown will be a positive force in the area,” he said.
Richard Spies, Brown’s executive vice president for planning, said no one at Brown was worried about the specific price for each building. In fact, he was not aware of the individual prices, but just of the total. He did say the seven properties had been acquired as a package because Belvoir Properties wanted to sell them that way.
Charles Francis, president of the Providence office of CB Richard Ellis/New England, said the prices Brown paid reflected not only the value of the buildings, but the rental income they are generating from current tenants.
The package deal was good for both parties, Francis added. For Belvoir, it was smart to sell all seven buildings at once, he said, because now it does not have to compete with other buyers and sellers in the area.
As for Brown, Francis said he believes the university will acquire more properties in this area over time. Although he did not know what kind of time frame Brown was using, he said he would not be surprised if the university grew in the Jewelry District.
For the city, however, Francis said, only time will tell whether this was a good deal. Last October, Mayor David N. Cicilline expressed concern about the potential loss of property-tax revenue and the fact that Brown had chosen to buy buildings in an established commercial district rather than an underdeveloped part of the city.
But Spies said Brown has no immediate plans to convert the properties to uses that would make them tax-exempt (in that case, a 10-year phaseout system would kick in). For now, he added, the buildings will be used as they have been. The buildings were bought with the idea that they were “long-term assets,” he said, and the university is still months away from reaching conclusions on what to do with the space.
The deal could create a tighter commercial real estate market, said Peter Hayes, a partner with Hayes & Sherry, the state’s largest independent commercial real estate brokerage. Office tenants could feel a pinch in their purses if Brown takes over more office space, he said.
“The rents aren’t going to go down,” he said. “They’re going to go up.”
Hayes added that not only will office space be tighter for the local office user, but parking will as well. “It doesn’t make it any easier for any office user who wants to be in that area,” he said.