Suffolk University Issues $158M Bond for Conversion

Suffolk University is taking the next step to turn an office building into a dormitory with nearly 300 beds for students.

The Boston school issued a $158 million bond for the redevelopment, the Boston Business Journal reported. The Massachusetts Development Finance Agency will sell the bonds on behalf of the university, according to Dow Jones.

The bonds are expected to be priced next week and the transaction would close within two weeks.

The primary purpose of the bond sale will be to fund the purchase, renovation and furnishing of 101 Tremont Street, an 11-story office building the school acquired from an affiliate of Australia’s Macquarie Group last fall for $30 million. Remaining proceeds will go towards capital improvements and repayment of existing debts.

Semi-annual interest payments on the debt will begin at the start of next year. They will be secured by a lien against the university’s tuition receipts and receivables.

Suffolk received approval from the Boston Planning and Development Agency for the conversion at the start of the year. The building is expected to be transformed into a 280-bed dormitory for the school, with the Beantown Pub on the building’s ground floor expected to remain in operation.

The project is expected to be wrapped by next fall.

The university has dabbled in conversions before. It purchased the former Ames Hotel in 2019 for $64 million. A year later, the building reopened with nearly 300 beds for students.

Boston Mayor Michelle Wu and other city leaders have been looking to grease the wheels for more office-to-residential conversions in the city. During a State of the City address last month, Wu said the tax break program in place for conversions would be extended to student and workforce housing; developers are eligible for the tax break, which will have no income restriction requirements if they sign a master lease with a university to house students in converted office space.

— Holden Walter-Warner