Image courtesy of EQ Office
A Boston office building that traded for nearly $156 million weeks before the COVID shutdown in 2020 was acquired by Boston-based Synergy Investments in exchange for the assumption of $76.5 million in mortgage debt.
The 179 Lincoln St. property spans an entire block between Chinatown and the Leather District. The seller was Blackstone’s EQ Office.
Aareal Capital Corp., which provided $93 million in acquisition financing for the 2020 deal, has agreed to extend the maturity date of the mortgage and the maximum principal of the loan has been reduced to $76.5 million, according to a Suffolk County Registry of Deeds filing this week.
The building is currently 82-percent leased.
“179 Lincoln St. offers a strategic location, combined with its rich history and modern amenities, making it an exceptional asset regarding the tenant experience. As we continue to expand our Boston portfolio, we look forward to continuing to deliver outstanding value to our tenants and stakeholders through this acquisition,” CEO David Greaney said in a statement.
Newmark’s capital markets team brokered the transaction.
Greaney appeared with Gov. Maura Healey in Worcester this month to tout the potential of office-to-residential conversions under a state program offering subsidies for technical assistance. Synergy plans to convert a downtown Worcester office building formerly occupied by Fallon Health into 220 apartments.
Boston is offering office landlords its own set of incentives for residential conversions, offering a 75 percent abatement of the residential tax rate for up to 29 years for qualifying projects. Developers have until June to submit applications.
In January, Synergy Investments paid $62 million for the 131 State St. building that includes apartments and Bostonia Public House restaurant.
The 221,440-square-foot Beaux Arts-style building on Lincoln Street was a factory for United Shoe Machinery and U.S. Thread Co. before being converted into office space, with Banker & Tradesman among the users from about 1956 through 1976 according to Tim Warren Jr., chairman of the newspaper’s parent company, The Warren Group.
EQ Office completed a series of upgrades to the brick-and-beam structure in 2023, including updates to the 5-story atrium lobby and restoration of the original terra cotta floors.
Within the South Station office submarket, the vacancy rate was 20.1 percent at the end of 2023, according to CBRE.
The transaction is the second recent sale of a South Station submarket office building to a local developer for a deep discount.
In October, Allston-based City Realty bought 186 Lincoln St. for $11 million from Brickman, which paid $20.65 million for the 72,782-square-foot building in 2015.
Editor’s note: This report has been updated with a statement from Synergy Investments.
