Charles River Plaza's owners test the market

Charles River Plaza, an office and retail complex on Cambridge Street that was renovated and expanded four years ago, is on the market and could set a price record for large commercial buildings in Boston.

The 647,783-square-foot complex is fully leased, mostly under a long-term contract for use by Massachusetts General Hospital, and has Whole Foods Market, CVS Corp., Bank of America Corp., and Cold Stone Creamery as tenants.

Its redevelopers and owners, Davis Marcus Partners Inc., are putting it up for sale at a time when prices for commercial space in some major cities are skyrocketing, and as Boston in particular is making a strong comeback after several years of high vacancy and low rents.

Davis Marcus hasn't disclosed an asking price, but a similar facility, the Center for Life Sciences in the Longwood Medical Area, sold last year for more than $1,000 a square foot, then a record, according to brokerage Cushman & Wakefield of Massachusetts Inc. A similar price for Charles River Plaza would mean it would sell for $650 million or more, but prices for quality commercial properties have been climbing even since then.

"We and our investors thought we would own this asset forever," Jonathan G. Davis, chief executive , said yesterday. "But with the really aggressive pricing that trophy assets are selling for these days, we felt it was incumbent on us to see what the market was."

Just recently Blackstone Group of New York closed on the $39 billion purchase of properties assembled by the Equity Office Properties Trust, including 12 million square feet in the Boston area. Some of the buildings in that portfolio are already being resold at ever escalating prices.

Beacon Capital Partners, which is buying some of the former Equity Office properties in the Washington, D.C., and Seattle areas, also recently sold all the holdings in one of its investment portfolios for $5 billion.

"The pricing you can get now almost makes it a tough decision to hold onto your property," said David Begelfer, chief executive of the Massachusetts chapter of the National Association of Industrial and Office Properties. He said the Boston market "is still one of the strongest in the country, because we all know that to get a development going here takes a long time."

The Cambridge Street complex was built as an urban lifestyle center in the 1960s and included the Charles River Cinema, a large-screen movie theater that was one of the last of its kind in Boston. It is on the edge of the Beacon Hill neighborhood and has a parking garage with 954 spaces.

The current owners bought Charles River Plaza in mid-2000 for $76.2 million. Davis Marcus then spent $270 million renovating and expanding the complex, adding 420,000 square feet -- including a mostly new eight-story building at the rear of the site and a smaller new one on Cambridge Street . The Cambridge Street area around the complex has also been spruced up.

The lease with Mass. General is a key asset to the value of the property. The institution occupies about 80 percent of the space. The Harvard University-affiliated Schepens Eye Research Institute is also a tenant. Whole Foods has about 39,000 square feet .

"It is one of those truly unique assets on par with the State Street Bank building," said Rob Griffin, president of Cushman & Wakefield , which is marketing the property. "It'll be one of the most sought-after assets we've ever had. We're going to have a billion tours."

Bids for Charles River Plaza will be due late in the month.

Thomas C. Palmer Jr. can be reached at tpalmer@globe.com.