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Vast Amounts of New Office Space to Open Up with Development of South Station Skyscraper

If one thing is true about commercial real estate in the city of Boston, it’s this: Office space is incredibly hard to come by, and that has been the case for many years running. Therefore, the recent announcement of the commencement of a project that will bring hundreds of thousands of square feet of such real estate to downtown is being met with much enthusiasm. Indeed, construction of a skyscraper more than 20 years in the making is expected to start this month – and an entire swath of downtown Boston will be transformed entirely.

South Station Skyscraper Photo Courtesy: Hines

Construction of the new tower, which will be built atop the city’s busiest rail hub – South Station – is finally coming to fruition now that the developer, Hines, has secured construction financing. Indeed, the developer closed on a $870-million construction loan from British hedge fund CIFF Investments, LLP, in late December of last year. According to documents that were filed in Suffolk County, the project will involve three phases. In the end, the new development will include 2.5 million square feet of office space along with condos and a hotel that will sit atop South Station’s bus terminal and railbed.

The first phase of the project, a skyscraper that will stand 678 feet tall and boast 51 stories, is expected to commence this month. Because the tower will take roughly four years to complete, however, tenants are not being lined up before construction begins. This is a rare occurrence in commercial real estate, but it is good news for businesses that would like to acquire prime, Class A office space in one of the busiest parts of downtown Boston.

First dreamed up by the development arm of Tufts University during the 1990s, the upcoming South Station development has been helmed by Houston-based developer Hines since that time. However, various things cropped up along the way to cause the project to drag out for nearly two decades. Although city approvals were granted in 2006, the recession that began in 2008 stopped planning cold in its tracks. Backing from Chinese investment firm Gemdale Properties revived the project in 2016. Plans were then reconfigured, and then Gemdale sold its interest to two investors – APG Asset Management and Dune Real Estate Partners – in 2018.

Boston construction behemoth Suffolk has signed on as the general contractor for the project, whose scope immediately raised concerns among many regarding the impact that long-term construction would have on South Station and its immediate surroundings. A plan regarding how construction will be phased in has been in the works between the Massachusetts DOT and Hines, and it’s expected to be released soon. However, the first phase of the project – the construction of the office and condo building – has been designed to minimize disruptions. The skyscraper will rise up from a podium that will be constructed above South Station’s passenger platform. Several archways will then be tied into a foundation that was built during the 1980s.

Future phases of the project, which call for the development of a 349-foot hotel or residential tower as well as a 279-foot office building, will likely result in changes to pedestrian paths of travel. However, developers have already assured planning agencies that locals will be alerted of upcoming changes well before construction begins. They have also stated that train schedules will not be impacted by any phase of the project, which is certain to be reassuring to residents and businesses that are located near South Station.

Although developers aren’t planning to seek out tenants just yet, those who are interested in acquiring office space in the new skyscraper are wise to act quickly as soon as they do. Therefore, it is crucial to stay abreast of the latest developments regarding the South Station skyscraper – and the best way to do that is by connecting with Boston City Properties. Check back often for updates regarding this exciting project, which will bring more than 750,000 square feet of office space during its first phase alone. We also offer a convenient search tool and commercial real estate database, so you can easily check availability, and we can connect you with a local commercial real estate agent when the time comes. For more information, contact us today.