1 Kendall Square for sale; owners hope for $360m

The owners of the One Kendall Square office, retail, and cinema complex in Cambridge are putting the property up for sale, seeking to cash in on rising demand for real estate in the fast-growing district.

Beal Cos. and Rockwood Capital are hoping to get upward of $360 million for the nine-building complex, which includes offices, laboratories, eight restaurants, a parking garage, and the Kendall Square Cinema. They paid $210.5 million for the complex in 2006, and have since made more than $64 million in improvements.

One Kendall is one of the largest properties to go up for sale this year, and hits the market as rising office rents offer a substantial upside for potential buyers.

"A lot of companies are doubling down on their efforts to be in Cambridge," said Robert Griffin of Cushman & Wakefield, which is marketing the property. "There are so few markets in the country that have access to colleges like Harvard and MIT."

One Kendall's office space is 84 percent leased; current tenants include Merrimack Pharmaceuticals Inc., InVivo Therapeutics, and NinePoint Medical Inc.

Its retail space is fully occupied. Restaurants include The Blue Room, Flat Top Johnny's, and Cambridge Brewing Company. Hungry Mother restaurant is also moving into the complex.

Earlier this year, the owners of One Kendall sought to sell a large stake in the project, but called off that effort and opted for an outright sale instead.

The complex is in one of the hottest real estate markets in the country. In addition to its proximity to MIT and Harvard, Kendall Square boasts a heavy concentration of technology and pharmaceutical companies, a burgeoning cluster of start-ups, and a long list of new restaurants.

During the past three months of the year, asking rents for top-rated office space in the area rose 3.1 percent, to $48.35 per square foot, according to the real estate firm Richards Barry Joyce and Partners.

Google Inc. is in the midst of a large expansion in the neighborhood, and last week Amazon.com Inc. committed to opening an engineering center at 101 Main St.

It is hard to assess the level of demand for individual properties such as One Kendall, which houses many early- to mid-stage companies. But Steve Purpura, a managing partner at Richards Barry Joyce, said the broader neighborhood is experiencing significant growth.

"The market is being driven by tech-based companies looking to open innovation hubs," he said. "It's hard to imagine that rents are not going to go up in 2013."