The parking lot at the corner of Newbury and Dartmouth streets is paved with plain asphalt. But it could just as well be gold.
This week, a Chicago investment firm paid $40 million for the nondescript lot, which covers barely one-third of an acre, scooping up what is effectively the last open land in the Back Bay’s high-end shopping district.
An arm of L3 Capital, which specializes in retail development, beat out a wide range of bidders to buy the property from a family that had owned it for more than a century and earlier this year decided to cash in on what turned out to be a very shrewd long-term investment.
L3’s plans for the lot were not clear on Wednesday — company executives did not return messages — but it’s safe to say drivers will soon have to find another place to park. People familiar with the bidding said L3 envisions retail space on the street level and offices or condominiums above it.
Whatever the company proposes, it will need approvals from both the city and the Back Bay Architectural Commission.
The site has been a parking lot since the late 1950s, when its owners, the Gove family, demolished the once-grand Hotel Aubry apartments — built of brick and stone in 1883 after the Back Bay neighborhood was created on landfill — along with a few other smaller buildings on the corner.
Starting in 1908, according to the Back Bay Houses website, Aroline Pinkham Gove, a prominent Salem resident and heiress to a lucrative patent medicine business launched by her mother, began assembling the property. After she died, it was held in a trust for her descendants, who have owned and managed it since.
Most of L3’s projects are in Chicago and New York City, though it also operates in Los Angeles and Miami. The company had previously bought and sold one small retail building on Newbury Street, according to its website, and is currently working with another Chicago investment firm to redevelop the long-empty former Barnes & Noble building in Downtown Crossing.
It’s one of a growing array of investors battling over development sites in the Boston area, and sometimes agreeing to pay astounding sums, such as $50.5 million for a rock-strewn acre in Cambridge’s Kendall Square or $218 million for six acres of asphalt-covered property along Fort Point Channel.
The deals reflect the strong desire by global investors to put their money into Boston, which is seen as an unusually strong and stable market, said Scott Dragos, executive vice president for capital markets at the real estate firm CBRE.
“The growth we have here is sustainable,” Dragos said recently. “People who come here from other markets generally pick up on that right away.”
The $40 million for the Back Bay lot works out to roughly $120 million an acre, which means L3 is paying even more than buyers did in the other deals. The price, local brokers say, highlights both the enduring appeal of Newbury Street — despite mounting competition from online retailers — and the scarcity of development sites in that part of the city.
The lot is “a blank canvas,” said Ben Sayles, senior director at the real estate firm JLL, who represented the sellers. “Newbury Street has emerged as one of Boston’s best locations for retail, office, and residential space. This site could ultimately be used for any of these.”
But for now, at least, it remains a humble parking lot. You can get into it for $20 an hour or $42 per day. Not cheap, but a bargain compared with what its new owners just spent.