The downtown Boston office building market may be thawing, but still with significant discounts.
Local firm City Realty Group recently bought 186 Lincoln Street for $11 million, or about $150 per square foot, marking a significant drop from its previous sale price of $20.7 million eight years ago, the Boston Business Journal reported.
The property, spanning 73,000 square feet and situated near the Interstate 93 ramp in Chinatown, has shown some potential despite its 50 percent occupancy rate, the outlet said.
The acquisition is part of a trend, as several downtown office properties have changed hands in the past few months, breaking a prolonged period of stagnancy in the market.
Real estate firm Synergy Investments purchased One Liberty Square, a 13-story office building in the Financial District of downtown Boston, for $45 million, which is a 17 percent decrease from the building’s value a decade ago, the Boston Globe reported.
The firm intends to maintain 186 Lincoln as office space and has plans to enhance the building’s amenities, including the addition of fitness rooms, a tenant lounge and a game room, with an estimated investment of around $1 million.
The firm’s portfolio also includes the Canal Street building, in Bulfinch Triangle, and 1515 Hancock Street in Quincy Center.
Boston is far from the only major metro area to experience a significant office market downturn.
Nearly a third of Portland’s office space is vacant, presenting a bleak outlook for the city’s commercial property sector.
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The downtown skyline, once bustling with activity, is now dotted with skyscrapers facing the challenges of too few tenants and loans that are nearing maturity without the possibility of refinancing, Willamette Week reported.
Portland’s office vacancy rate, including sublet space, reached 31.5 percent in the third quarter — higher than several other major U.S. cities, according Colliers. Only San Francisco, with a 31.9 percent vacancy rate, was higher.
— Ted Glanzer