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Millennium Partners has obtained a $775 million construction mortgage to develop a 1.4 million-square-foot skyscraper in Boston’s Financial District, three months after scaling back the residential portion of the project in response to a cooling condo market.
London-based Cale Street Investments furnished the financing for the $1.3-billion project which will include 812,000-square-feet of office space and 321 apartments at 115 Federal St., Millennium Partners announced this week. Frank Petz, managing director of investment sales for Colliers Boston, represented Cale Street Investments in the transaction.
The agreement signals lenders’ long-term confidence in high-rise urban office and residential buildings despite the COVID-19 pandemic which has largely stalled office leasing and depressed apartment rents in Boston. No tenants have been confirmed for the 52-story tower’s 772,000 square feet of office space.
“Securing the construction loan from Cale Street Investments – an unprecedented investment given the global pandemic – assures that Winthrop Center will remain on schedule for completion in 2022, when it will introduce a new model for office environments and surpass current best-in-class standards,” Millennium Partners Founder Christopher M. Jeffries said in a statement.
Millennium began reducing the residential component from 500 condos to 387 last fall amid signs of softening of the high-end condo market. Site work and underground construction was halted this summer as the New York developer sought to salvage the financing for the upcoming vertical construction stage of the project.
In July, the Boston Planning & Development Agency approved a project change which replaces the condo portion with 321 apartments. The size of the office portion of the project is unchanged.
Millennnium paid $102 million to buy the 1-acre parking garage site from the city of Boston after being selected as the preferred developer by the BPDA in 2016.
Delays in the tower’s construction have also stalled a large affordable housing project in nearby Chinatown whose financing included a $15 million linkage payment from Millennium.
Editor’s note: This report has been updated with a statement from Millennium Partners and additional details on the financing source.
