PRIM eyes prime properties

The state pension fund is set to go on a billion-dollar commercial real estate buying spree and experts say now is a great time to buy.

About 10 percent — or 
$5 billion — of the state's
$52 billion pension fund is currently invested in real estate, much of it in direct ownership of properties, including the fund's home at 84 State St. in downtown Boston.

State money managers recently decided to borrow against the pension fund's real estate portfolio, raising $1 billion at favorable terms, and hunt for more properties to purchase.

"Our appetite near-term for real estate has gone up. We have five real estate managers who are trying to identify real estate we can buy," Michael Trotsky, executive director and chief investment officer for the state pension fund, told the Herald. "We are looking mostly for 'core' real estate — the best buildings in the best locations, primarily in the United States, but we don't specifically target any city. It will be throughout the country."

David Begelfer, CEO of commercial real estate trade group NAIOP Massachusetts, said it's a superb time to buy for anyone who "does their homework."

"The market in Massachusetts, especially Eastern Massachusetts, has been extremely strong over the last couple of years and looks to be strong going forward," Begelfer said. "Many markets around the country are still recovering and so there are certainly some opportunities."

The pension fund already owns 87 commercial properties, plus several others through partnerships.

For example, in California, the fund owns the Market Street office and retail building in downtown San Francisco, a shopping center anchored by a Safeway in Mill Valley, and the Carmel Medical Office building in Rancho Bernardo.

The portfolio includes 2020 K St. in Washington, D.C. — the 11-story home to several Bingham McCutchen lawyers and the George Washington University Press — and the Sawgrass Lake Center, an office complex in Sunrise, Fla.

Last year, the pension fund returned 13.9 percent, much higher than its 8 percent target — and starting this year the state's target return has been increased to 8.5 percent. There are 522,800 members of the pension plan — 329,000 active and 199,000 retired, according to the state treasurer's office, which oversees the pension fund.

Trotsky said he expects the pension fund to invest the extra billion dollars within two years. The last time the pension fund went on a similar real estate buying spree in the 2000s, it netted $400 million extra.

"We're taking advantage of the low-interest rate environment and we expect it to generate $400 million in 'excess' profits over the next seven and a half years," he said. "It was considered very safe by outside investors. (The pension fund) is so big and so stable that it's not considered a big risk to issuers of this debt."

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DeLeo: Gov’s tax hike plan damaging

House Speaker Robert DeLeo will tell Hub business leaders today that working families and businesses shouldn't have to suffer "collateral damage" from Gov. Deval Patrick's plan to hike taxes by nearly $2 billion to pay for transportation and education.

"Sensitive to today's economic realities, I'm worried that the administration's proposal places too heavy a burden on working families and businesses struggling to survive," DeLeo says in a speech this morning to the Greater Boston Chamber of Commerce, according to his prepared remarks.

"We want to minimize the pressure on Massachusetts citizens as we find a way to meet our goals. If we are to pass a new revenue package, I believe it should be far more narrow in scope and of a significantly smaller size."

Patrick has proposed nearly $2 billion in new taxes to fund education and transportation projects and wants to hike income taxes; make regular increases in MBTA fares, RMV fees, highway tolls and the gas tax; and raise taxes on cigarettes, candy and soda, while lowering the state sales tax.

Some lawmakers prefer separating the $1 billion in transportation financing from the full state budget, with user fees instead of broad-based taxes.

In his chamber speech, DeLeo will also discuss funding for education, another Patrick priority.

"These areas cannot be sufficiently addressed without the injection of additional revenue into the system," DeLeo says. "While we agree we need to focus on these two areas, I do differ on the amount of new revenue that Massachusetts families and business should be asked to contribute."

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Longtime Mass. ice business on block

Longtime Mass. ice business on block

GLOUCESTER, Mass. — A company that's been supplying Gloucester fishermen with ice for decades is for sale as the fishing industry faces a brutal 2013.

The owner of Cape Pond Ice Co. tells the Gloucester Times that he has no choice as local fishermen absorb a 77 percent decrease in their cod catch this fishing year, which starts May 1.

Scott Memhard is asking $2 million for the property, which includes 180 feet of dockage where boats stop to ice up before heading out.

The business has diversified as the local fishing industry has declined. It increased T-shirt sales after a character wore a Cape Pond Ice shirt in the movie The Perfect Storm. He also marketed his ice for cocktails.

But he said the drastically declining fish catch is too damaging to his core business.

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Evernote hacked: 50 million passwords reset

LONDON — Online note-taking service Evernote Corp. has been hacked and is resetting all its 50 million users' passwords as a precaution.

The Redwood City, California-based company said in a post published late Saturday that an attacker had been able to access sensitive customer information and that every user would have their account reset "in an abundance of caution." In a follow-up email sent Sunday, the company said it believed the attack "follows a similar pattern of the many high profile attacks on other internet-based companies that have taken place over the last several weeks" — an apparent reference of recent breaches at Facebook Inc., Twitter Inc., and Apple Inc.

However the company said the attack did not appear to be linked to Java, a commonly used computer programming language whose weaknesses have been used as springboards for other recent hacks.

Evernote said the attack, which it described as "sophisticated," was able to compromise an unspecified number of customers' encrypted passwords. Decoding such passwords can be difficult but possible.

The company said it has seen no evidence that any customer data had been tampered with or that any payment information had been compromised.

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The Ticker

What's up, online doc?

Rite Aid has expanded an online doctor service for its drugstore customers that is limited to virtual visits, but cheaper than a traditional primary care appointment.

The company, the nation's third-largest drugstore operator with 4,600 U.S. stores, said its NowClinic Online Care program is available at 58 locations in four cities: Baltimore, Boston, Philadelphia and Pittsburgh. Its rivals, Walgreen and CVS, also run in-store clinic programs. Walgreen operates more than 370 Take Care clinics, while CVS runs more than 600 MinuteClinics.

Rite Aid's service connects drugstore customers with doctors for a video or phone consultation about a range of ailments like allergies, bronchitis, rashes, the flu or sinus infections. Rite Aid officials say the concept aims to improve access to health care.

TODAY

• At a community meeting in South Boston, developers discuss plans to demolish St. Augustine's Church and build a residential complex.
• Men's Wearhouse reports quarterly financial earnings.

TOMORROW

• The Harvard Allston Task Force meets at the Honan-Allston library branch.
• The Institute for Supply Management Index releases its service sector index for February.

WEDNESDAY

• Framingham office supplier Staples reports quarterly financial results.
• The Federal Reserve releases the "Beige Book" report on regional economic conditions.

THURSDAY

• The Greater Boston Chamber of Commerce hosts a government affairs forum featuring House Speaker Robert DeLeo, at Boston Park Plaza.
• Massachusetts jobs figures for January and revised 2012 unemployment rate, labor force data and jobs estimates are released.
• The Federal Reserve releases consumer credit data for January.

FRIDAY

• U.S. Labor Department releases the unemployment report for February.
• Rockland Trust has appointed Brian Slater to the bank's commercial lending team as vice president. Prior to joining the bank, Slater served as senior vice president and team leader at People's United Bank.
• Blueprint Medicines of Cambridge has added Dr. David Schenkein, chief executive officer of Agios Pharmaceuticals, to its board of directors.

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Mustering a new tenant for Navy Yard landmark

The Muster House — an unusual, octagonal building that served as a worker assembly point at the Charlestown Navy Yard in the 1800s — will have a new leasehold owner for the first time in more than 15 years.

The owner of a building consulting firm in Cambridge is finalizing a deal and may relocate his business to the 31 Fifth St. property, which has been owned by the Boston Redevelopment Authority since a 1970s handover by the federal government.

"From a community point of view, it's always good to see an active user in that building," said Mark Rosenshein of the Charlestown Neighborhood Council. "It's a very small and unique space, so it takes a very unique user to make it work."

Though tiny at less than 2,900 square feet and well off the Hub office market's beaten path, the Muster House drew the likes of dot-com darling Jeff Taylor. The Monster founder picked the historic pad for his Eons startup, working solo there for the first few weeks.

"An entrepreneur starts in a very lonely place," Taylor told Bloomberg News in 2006. "It's when you think you have a great idea and everyone around you thinks you're crazy, and you act on it."

Built between 1852 and 1854, the four-story brick building is surrounded by a porch and topped by a clock tower. Shipyard workers mustered daily at the sign, receiving assignments and pay. The landmark is down the street from the USS Constitution's berth.

The next tenant may be Building Enclosure Associates, whose owner, Michael Velji, is close to finalizing a purchase of the lease from the Royalston Trust.

Velji was not available for comment, but an executive at the firm, Ed Mannix, said a deal may be done later this month.

The Royalston Trust was set up by the late Werner Bundschuh, a filmmaker and local real estate developer who acquired the Muster House lease at a foreclosure auction in 1997. At the time, the trust assumed a 65-year lease with the BRA, paying about $4,300 a year and taking responsibility for renovations and maintenance.

"We actually had quite a bit of interest," said Nancy Kueny, a broker at Gibson Sotheby's International Realty handling the lease sale for the trust. "It's probably one of the most interesting buildings in the Navy Yard."

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A deal worth 
celebrating

Party City, the nation's largest party goods chain, plans to acquire iParty. Here's a look at the two retailers:

iParty

HQ: Dedham, Mass.

Founded: 1998

Stores: 54 in New England and Florida

Annual revenue: $80.9 million*

Party City

HQ: Rockaway, N.J.

Founded: 1986

Stores: 750 in U.S., Canada and Puerto Rico

Annual revenue: $1.9 billion*

*From 2011 financial reports, latest available

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iParty’s over as Dedham chain sells to N.J. rival

iParty's over as Dedham chain sells to N.J. rival

Dedham's iParty finally has something to celebrate.

Larger competitor Party City has a deal to buy the struggling party goods chain, which in November announced it had hired a financial adviser to explore strategic alternatives. The cash deal, valued at about $10.9 million for common stockholders, represents a 200 percent premium over iParty's Feb. 28 closing share price.

Party City is getting iParty "very cheap," said retail consultant Michael Tesler, of Norwell's Retail Concepts, but it's good news for iParty's landlords and vendors.

"IParty may have been struggling paying its bills and may be in arrears in some of these situations," Tesler said. "In a bankruptcy case, the landlords would get killed. It would be worse for vendors."

In regulatory documents, iParty said the total transaction has an expected "enterprise value" — a measure of what the market believes a company's ongoing operations are worth — of about $35 million, excluding deal expenses.

Rockaway, N.J.-based Party City is the nation's largest party supply retailer with 750 stores, while iParty has 54 stores in New England and Florida.

"Party City is a leading player in our industry, and we could not be more pleased with this outcome of the strategic review we initiated last year and the return it affords to all of our stockholders" said iParty chief Sal Perisano.

In October, iParty took a devastating blow from Hurricane Sandy — the second straight year that a major storm disrupted its crucial Halloween seasonal sales period.

Party City CEO Gerald Rittenberg said the acquisition will accelerate the chain's growth in New England, where it has just five Connecticut stores. "We look forward to working together to expand our combined geographic footprint and brand presence on a national scale," he said.

The deal, expected to close in the second quarter, allows iParty to solicit superior proposals through March 31.

Boston private equity firm Thomas H. Lee Partners bought a majority stake in Party City last June.

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Home’s got room for fun, games

Call it the ultimate family dream house. This 20,000-square-foot home high atop Bald Hill in Andover has everything kids could want — a regulation-size indoor basketball court outfitted with a batting cage and a major-league pitching machine, an indoor pool with water slides, a home theater with stage, a room full of arcade machines — even a 10-pin bowling alley.

The current owners raised four children in the home, which despite its square footage does not feel like an egoistic McMansion. The rooms are well-scaled and the basketball court is subtly hidden behind a front colonnade and arched glass windows, with a separate entrance for holding neighborhood practices.

Built in 2003, the home has a tasteful olive cedar and fieldstone exterior and sits on four acres of land with a putting green and grass backyard the size of a football field and sporting panoramic views. It was on the market for $6.5 million but has just been reduced to $5.5 million, far less than the owner has invested.

Custom-milled cherrywood and mahogany door moldings and built-ins fill the home, along with engineered birch floors that have radiant heating in some rooms. There's a light-filled home office, a billiards room, formal dining room, large master bedroom suite and four other bedrooms with connecting Jack-and-Jill baths.

The cherrywood and Absolut black granite kitchen features a breakfast bar that seats nine, a two-sided gas fireplace, professional grade Wolfe appliances and an adjoining sunroom for informal dining.

The large sunken living room is divided by a coffered ceiling and soffits into several areas, with a large fieldstone wood-burning fireplace and a built-in media center. This room opens out onto a large deck with great views that has a built-in hot tub and professional putting green.

There's even a nanny/in-law suite on the first floor with a full bath.

But the home's highlights are the basketball court with a professional scoreboard and the indoor pool, bowling alley and locker rooms and a home gym below, which account for nearly 9,000 square feet of the home. There's a soaring cedar solarium at one end of the gym with water slides down to the pool.

The second-floor master bedroom suite has a seating area with glass doors out to a deck. There are two walk-in closets and a two-sided gas fireplace that overlooks a raised whirlpool tub in a marble-lined en-suite bathroom with a double granite-topped vanity and walk-in shower.

The other bedrooms are scattered throughout the second and smaller third floors, and there are two sets of laundry areas.

The basement has a finished game room with a bar, a home theater with rows of plush seats, and a second nanny/in-law suite. The arcade games are negotiable to buy.

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New format for Clear Channel’s WXKS

Bloomberg Radio wants to become the pulse of the Hub's business and finance community with a new 24/7 station that launches 12:01 a.m. Friday on WXKS 1200 AM.

"There's been a retrenchment in business coverage and we hope to come in there and fill that void," Al Mayers, head of Bloomberg Radio and a Melrose native, told the Herald. "Boston's a great center for the things that our customers are very interested in."

Bloomberg has 26 journalists in Boston who will be contributing regularly to show content, Mayers said. The station format will be guest-driven and will feature interviews anchored by eight hosts, he added.

The station will provide a signal for those with HD radio on 94.5FM-HD2. Bloomberg Radio has also formed a content partnership with Bentley University, which will provide the station access to faculty and staff for content and commentary.

WXKS, which is owned by Clear Channel Communications, has gone through several AM formats, including progressive talk and comedy, said Donna Halper, a veteran radio consultant and Lesley University professor.

"There's a real limitation to what you can do on AM in Boston right now because so many formats are already taken," she said. "AM, for right or for wrong, is listened to by older people and business attracts an older audience, so it might actually be a good move."

Mary Menna, market president for Clear Channel Media and Entertainment Boston, said the change in operation won't affect any employees. The station's current programming, "Matty's Comedy 1200," will now be offered to listeners on 107.9 WXKS HD2 in Boston, she added.

"We believe (Bloomberg Radio) will resonate very well with the audience in Boston," Menna said.

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