SSR Realty Advisors is offering Boston’s 211 Congress St. for sale at $18 million, which is $1.3 million less than what the firm paid for the property in 2001.

All of a sudden, gravity has reintroduced itself to Boston’s commercial real estate landscape.

After years of unquestioned pricing spikes, the sale of 211 Congress St. is being launched at $18 million, $1.3 million below what seller SSR Realty Advisors acquired the 70,000-square-foot structure for in early 2001. While office buildings in outer locations have been trading lower since the regional recession took hold, the Hub’s Financial District has heretofore been immune from such losses.

“You don’t often see [downtown Boston] properties come on below what someone paid for it,” concurred Spaulding & Slye Colliers principal Michael Smith, who maintains that investors of all stripes still want a share of Boston’s limited office inventory. A one-off fire sale may not portend a trend, he said, or indicate that SSR Realty sees trouble ahead for the local office sector. SSR is also dumping Boston’s 100 Franklin St., with Cushman & Wakefield of Massachusetts hired to peddle that 117,000-square-foot building.

“It may be a logical decision in the overall portfolio or fund that the asset sits in,” Smith said of 211 Congress St. “Depending on what the fund mandate is, they may need to liquidate properties, and sometimes they are just not able to time the disposition as well as they would on an individual basis.” Others suggest that flat rental growth and an overhang of space might be dampening capital enthusiasm, with one investment specialist questioning whether 211 Congress St. will find takers even at the marked-down rate.

“I’ll be amazed if that thing sells at $18 million,” said the source, who requested anonymity. At a $257 per-square-foot asking price, 211 Congress St. would indeed garner better per-square-foot rates than seen in other Financial District sales, particularly for smaller, older buildings of its ilk.

Plummeting Returns

Just a few doors down from 211 Congress St., for example, Cornerstone Real Estate Advisors last summer purchased 3 Post Office Square for $33.2 million, or about $239 per square foot. A predecessor to seller Archon Atlantic had paid $12.8 million for that building in mid-1999, which required extensive renovations as part of its repositioning.

Spaulding & Slye marketed 3 Post Office Square, securing a price few thought possible given the dour economic conditions in which it hit the street. The firm brokered profitable outcomes on other recent Financial District deals as well, including the $24 million, three-building portfolio sale in July for Fairlane Properties and One State St., a 14-story, 62,000-square-foot asset which Boston real estate legend Nathan R. Miller recently peddled for $13 million, or $209 per square foot.

Even with capital still favoring real estate, returns have been plummeting from the windfalls realized at the top of the office market in 2000 and 2001. In one of the city’s most striking flips of the decade, Boston Capital Institutional Advisors sold 99 High St. in April 2001 for $213.5 million, or about $292 per square foot. Located next to 211 Congress St., 99 High St. had been acquired by BCIA just 14 months earlier for $168.5 million, or $230 per square foot.

Those days appear long gone, however, unless a building has the lease term, occupancy or tenant credit needed to attract the lion’s share of buyers who are seeking stable assets. One broker who has pitched deals in 211 Congress St. estimated that the property would have to reap rents substantially above $30 per square foot to make a $257 per-square-foot price tag feasible. According to the broker, such space can typically be had in the mid-$20 per-square-foot range.

Despite such views, listing broker Meredith & Grew Co. broker Lisa M. Campoli is upbeat about 211 Congress St’s chances. “It should be extremely positive,” Campoli said of anticipated interest for the 11-story building, citing a superior location as a key draw. Campoli is particularly familiar with the building, having negotiated its sale to SSR Realty Advisors three years earlier.

The frenzy for commercial real estate will help assuage fears of any vacancy exposure, Campoli predicted, adding that recent improvement in market fundamentals should further embolden suitors.

“Investors are starting to recognize that the leasing market is finally turning around,” she said. “And once you turn that corner, vacancy goes from being a negative to being a positive.”

Campoli also dampened notions that 211 Congress St. might be a possible residential play, in keeping with a conversion movement sweeping the city’s bloated office market. A few blocks away, the new owners of Lincoln Plaza are repositioning one empty office building in that complex into residential, while similar plans are being explored throughout the downtown market.

“It’s a possibility, but right now it’s not an obvious strategy for selling the building,” said Campoli, voicing strong optimism that 211 Congress St. will overcome any concerns about empty space or depressed rental rates. “There are not that many buildings like it available,” said Campoli.

Others maintain that limited opportunities for multifamily and retail are driving investors to consider partly vacant office buildings as acceptable risks. While overseas funds and institutional money seldom stray from core deals, the clamor to invest in real estate before interest rates begin to rise is forcing certain capital into the fray. “A lot of people think the next six months or so are probably going to be the best time to sell,” said real estate investor Jeffrey Miller of Boston-based Challenger America, which represents Australian institutional capital.