Karp wraps up deal, awaits word on another
By Mary Lancaster

Stephen Karp

Independent Writer

As the $55 million deal between real estate investor Stephen Karp and Three Winthrop Properties, Inc. becomes final today, Karp is hoping the company will accept his offer on more Nantucket parcels.

The process of closing Karp’s purchase of 48 retail properties, including Straight Wharf and Old South Wharf began on Monday, following the approval of limited partners of the Nantucket Island Associates Limited Partnership, which is under the umbrella of general partner Three Winthrop.

The transaction represents approximately 70 percent of Three Winthrop Properties’ holdings, and now makes Karp owner of the island’s largest commercial portfolio.

“We’re excited,” Karp said of the closing. “We think it’s a wonderful opportunity. We have a lot of confidence in Nantucket and the future of Nantucket.”

Karp said he has made another offer on a Sherburne Associates property package, which includes 21 Federal. Karp said he has signed a confidentiality agreement as part of his offer, and therefore could not reveal the dollar amount.

He said Winthrop has received additional offers from various interested parties; however, he hopes he will know by the end of this week whether his has been accepted.

“We [already] have management in place there that we can integrate,” he explained.

The NIA partnership has an interest in Sherburne Associates through a 99.99 percent general partnership interest in NIA Operating Associates Limited Partnership, which owns 99.49 percent of Sherburne.

The 48 properties Karp just acquired for $55 million were purchased by Winthrop in December 1986 for $24,901,631. The $55 million was decided on through consultations the partnership had with Eastdil Realty, a real estate investment banking firm hired to assist with the sales process.

During Karp’s due diligence period he discovered that approximately $5 million in repairs and maintenance are needed along the wharves, including the Rope Walk restaurant site. Karp said he does not plan to begin any work until the summer ends.

Karp, the Newton-based owner of New England Development Corporation, also heads Nantucket Island Resorts LLC. The recent sale was made to Nantucket Island Resorts Retail LLC, an affiliate of NIR.

In 1998, NIR bought most of the partnership’s other properties, including the White Elephant, Harbor House Village, the Nantucket Boat Basin and boat basin wharf cottages. That transaction gave Karp first right of refusal on the commercial properties closed on today. Karp, who has owned The Wauwinet for several years, last year purchased the Jared Coffin House from Phil and Margaret Read.

Mainland holdings of New England Development include malls in Chestnut Hill, Cambridge, Charlestown and Plymouth, and many retail operations at LaGuardia and Philadelphia airports, among other locations.