General Electric Company (NYSE:GE) managed to divest its Fort Point property which acted as its Boston headquarters for an impressive $252 million and $86 Million of the proceeds will go to the state of Massachusetts.
The sale includes the land located at Fort Point, and also a permit that the GE planned to use to construct a 12-story building. The buyer that struck the deal was a developer known as Alexandria Real Estate Equities.
GE will give some of the proceeds from the sale to the tune of $86 Million to Charlie Baker, the Governor of Massachusetts who will allocate the funds to the MassHousing project. The latter is a housing development project that is aimed at providing more housing for middle-income families. $60 million will be spent in the construction of 500 housing units that will have a moderate price tag that will especially target first-time home buyers.
“We want to put a decent portion of this money to work in communities where we are having success creating opportunities for first-time homebuyers of color,” stated MassHousing representative Paul McMorrow.
GE’s plans after the sale
GE will still occupy the site after the sale but as a tenant. Nevertheless, it already secured a 12-year lease for two buildings where it will relocate its senior executive team and about 250 employees. The company likely sold the Fort Point property as part of its plan to scale down its operations. GE had initially planned to create 800 new jobs in Boston but the past few years have been rather rough, thus the need to shed some of its operations and properties.
Some of the other businesses that the company also divested include its healthcare division and its oil and gas operations. The recent sale also aligns with a warning by the company’s CEO Larry Culp that 2019 will be a turbulent year for General Electric.
Meanwhile, the sold property will allow Alexandria Real Estate Equities to expand its operations in top life science. The deal therefore represented an important opportunity and thus Alexandria Real Estate Equities’ decision to relief GE of the Fort Point property.