Karp eyes Winthrop purchase
Company’s Nantucket properties said to be offered for $85 million
By Mary Lancaster
Independent Writer

Stephen Karp, owner of the prestigious Nantucket Island Resorts hotels and president of New England Development Corporation, may soon become the largest holder of local commercial properties if he goes through with a deal to buy numerous properties owned by Sherburne Associates Realty Trust, amounting to better than 70 percent of the Winthrop Financial Associates’ portfolio.

Though Karp said on Thursday that he is in the confidentiality period of the process and could not officially confirm or deny his position in the pending transaction, he did acknowledge that two weeks ago a group of his engineers, consultants and attorneys were on Nantucket to perform due diligence on Winthrop’s properties, a procedure that investigates whether there are any structural or title issues involved with properties for sale.

“We are looking at the properties, but I can’t give you too many details now,” said Karp. “The price is being negotiated.”

Henry Wyner, Vice-president of Winthrop Financial Associates, explained on Monday that Winthrop, on behalf of the realty trust, hired Eastdil, a New York City-based international real estate brokerage, to market the properties.

“Given the extraordinary Nantucket real estate values, we are going to explore the possibility that this would be the right time to sell these assets,” said Wyner. “The marketing effort is not based on moving assets from one place to another, it is based on the values.”

Neither Karp nor Wyner would disclose the specific number of properties involved or the asking price. Wyner did say that the Sherburne Realty Trust includes Straight Wharf, Old South Wharf, and various properties on Main Street as well as on Centre, Federal, South Beach and South Water streets.

The 30 percent not being marketed includes the tank farm behind Grand Union, the Grand Union grocery and a few small, adjacent businesses such as Cavalier Gallery on Salem Street, said Wyner.

The most recent total assessed value of all Nantucket properties owned by Winthrop is approximately $75 million. According to one unnamed source, Winthrop is looking to fetch about $85 million for about 70 percent of its Nantucket portfolio.

Straight Wharf is valued at roughly $8.4 million and Zero Main, where Winthrop has its island offices, is assessed at $5.6 million. First Winthrop Corporation purchased 160 in-town commercial properties in 1986 from Sherburne Associates, founded by the late Walter Beinecke.

Karp has fond ties to the island from visits in his early adulthood. Well known as an asute businessman, Karp owns Nantucket Island Resorts, which includes the White Elephant, The Wauwinet, Harbor House Village, Nantucket Boat Basin and boat basin Wharf Cottages.

He added the historic Jared Coffin House hotel last July after exercising a right of first refusal when the inn was sold by Phil and Margaret Read. New England Development properties include high end malls in Chestnut Hill, Cambridge, Charlestown and Plymouth as well as retail operations in LaGuardia and Philadelphia airports, among other locations.

In early January, Karp placed two harbor front lots with six existing buildings on Commercial Sreet. on the market for $10.5 million. The properties are under the name of Commercial Street LLC and carry Clarence “Frenchy” Doucette’s name as the listing broker through The Maury People. It is unclear at this time whether he will continue to try selling the parcels if he buys the Winthrop properties.

Eastdil, a wholly-owned subsidiary of Wells Fargo Bank, was established in 1967 and is listed on its website as a real estate investment banking company. According to the company profile, it has completed more than $203 billion in worldwide transactions since its founding, with more than 500 of them accomplished since January 1998 at a value exceeding $81.7 billion. From January 1998 through March 2005, 362 of the transactions included offices with the average deal worth $126 million. The average retail transaction, of which 157 are numbered within this time period, is valued at $131 million.

Some of Eastdil’s clients include Bank of America, Bank of New York and Chase Manhattan Bank, J.P. Morgan Investment Management, Microsoft, The Rockefeller Foundation, The Trump Organization, The Walt Disney Company, Xerox Corporation, and a host of foreign banks, several major insurance companies and hotel giants such as Hilton and Four Seasons.