Hendrie Lane Capital acquired the 171,000-square-foot Andover campus as its first deal in a new strategy targeting the advanced manufacturing sector.
Hendrie Lane Capital, partnering with V12 Investments and The Zaro Group, paid $43.5 million for a two-building property at 3 and 6 Riverside Drive in Andover, Massachusetts. The firm acquired the asset from Ciminelli Real Estate Corp. The property spans 171,000 square feet of research-and-development and advanced manufacturing space on 16 acres, about 25 miles north of Boston.
The buildings are fully leased to NEOLab, Physical Sciences, SciAps and music equipment company Fishman. JLL's Scott Carpenter brokered the sale on behalf of the seller. JLL's Andrew Gray, Hugh Doherty and Emily Fuller arranged acquisition financing, a $28.6 million loan from Washington Trust Bank.
The deal marks Hendrie Lane's first transaction in a new investment strategy focused on R&D and advanced manufacturing properties. The firm has invested in office, retail and multifamily assets for more than 25 years. Hendrie executives see the manufacturing and R&D sector at the start of a sustained growth period that will attract more institutional money, the firm said.
"Riverside Drive is exactly the kind of asset we built this strategy around: well-located, high-quality, well-maintained buildings, acquired at a significant discount to replacement cost and to historical market pricing, and leased long-term to time-tested tenants who have invested heavily in their space," Hendrie Lane principal Tony Calabrese said in a statement.
Hendrie is targeting deals in the Boston, New York, Washington D.C., San Francisco and North Carolina Research Triangle regions. The Connecticut-based firm's shift into manufacturing and lab space comes as other investors pursue similar strategies in secondary markets outside core gateway cities.
The acquisition financing represents a 65.7 percent loan-to-value ratio based on the purchase price. Washington Trust Bank provided the debt. The tenants have invested heavily in their space, according to Calabrese, suggesting long-term lease commitments that reduce near-term rollover risk.
The Deployment Angle
Family Office Real Estate Daily Desk · our analysis, not the source's
The deal offers three routes for family offices evaluating manufacturing and R&D exposure in Boston's outer ring. Co-GP capital alongside Hendrie Lane on similar acquisitions would provide sector expertise and deal flow in the target markets the firm named. Direct ownership via a separate account makes sense for offices with industrial or life-sciences underwriting capabilities willing to source off-market deals in the 171,000-to-300,000-square-foot range. An LP commitment to a dedicated manufacturing and R&D fund would diversify across geographies but would likely carry higher fees than co-investment structures.
The financing arithmetic is instructive. At $43.5 million and 171,000 square feet, the price per square foot is $254. The $28.6 million loan implies a 65.7 percent loan-to-value, leaving $14.9 million in equity. If the buildings are fully leased at market rents for suburban Boston industrial and R&D space, the equity multiple will hinge on how much tenant improvement capital Hendrie deploys and whether the long-term leases Calabrese referenced include renewal options below market. Underwrite for tenant concentration risk across four occupiers and for the cost of repositioning space when leases roll.
Price the discount to replacement cost and historical pricing that Calabrese cited as the primary return driver, not rent growth. Suburban Boston construction costs for R&D and light manufacturing buildings have climbed, making the acquisition basis attractive if the tenants stay. Test how the asset performs if one or two tenants leave at lease expiration and space sits vacant for 12 to 18 months. The 16-acre land parcel may offer future development or densification value, but that is speculative and should not drive the acquisition model.
Avoid over-indexing to the institutional capital thesis. Hendrie's view that manufacturing and R&D will draw more institutional money may be correct, but family offices should not chase a sector because institutions are coming. The Andover deal works if the rent coverage is sound, the replacement-cost discount is real, and the tenant mix can withstand turnover. If those fundamentals do not hold, the strategy is just sector-chasing dressed up as contrarian investing.
