Blackstone Sells Back Bay Office For $125M: The Boston Deal Sheet

In what has become a rare occurrence for the office market, a downtown office building traded at a slight profit compared to the previous sales price.

DivcoWest acquired a 245K SF office building at 399 Boylston St. for $125M from Blackstone, according to the firm. Blackstone's EQ Office acquired the property for $117M in 2014.

The buyer also secured financing for the deal, Bloomberg reported.

The property is 90% leased to several tenants, including Tatte Bakery & Cafe and Carbon Health Immediate & Primary Care. 

Blackstone invested roughly $35M in upgrades, including a full-service fitness center, yoga studio, bike storage and a salon. The building has immediate access to the MBTA Green Line.

“We believe Boston continues to be one of the most resilient and desirable office markets in the country,” DivcoWest Head of Boston Acquisitions Michael Falvey said in a statement. 

The sale comes during an uncertain period in the Boston office market.

With high vacancy and low demand for office space, many office buildings have sold for significant losses coming out of the pandemic. Boston's office values were projected to fall 30% by 2029, leading to a loss of $1.5B in city revenue, according to a Tufts report from February 2024.

Blackstone's EQ Office put the building up for sale in May.

Newmark’s Robert Griffin, Edward Maher, Matthew Pullen, James Tribble, Samantha Hallowell and William Sleeper represented the seller and procured the buyer.

SALES

Life sciences owner and developer Phase 3 Real Estate Partners acquired a 30K SF life sciences building at 30 Hampshire St. for $25M, according to deed records. The seller was 34-40 Hampshire Street LLC. The San Diego-based developer also owns 10 other lab buildings in Greater Boston, including two conversion projects at 55 Summer St. and 12 Farnsworth St. in Boston.

LEASES

WilmerHale renewed its 201K SF lease at Starwood REIT’s 912K SF 60 State St. office building, but it is taking up 47K SF less than its previous lease. The firm has called the State Street office building home since 1977. The building is 97% leased to tenants including Flexcar, Sidley Austin, BlackRock and Overdrive Interactive.

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Coworking operator The Malin plans to occupy 20K SF at WS Development’s 111 Harbor Way. The coworking operator will occupy the second floor. The company has 11 locations that are either open or that it plans to open in New York, Nashville, Austin, Savannah, Georgia, and Washington, D.C.

FINANCING

National Development received $83M in acquisition financing for its Watertown Mall deal. The developer bought the property at 550 Arsenal St. for $100M last month. The property is anchored by a Target and is home to a Best Buy, a Chase Bank and a branch of the Massachusetts Registry of Motor Vehicles. JLL’s Henry Schaffer, Andrew Gray, Sam Wiesman and Joe Marinaro represented the borrower.

CONSTRUCTION AND DEVELOPMENT

Brandeis University broke ground on a 631-bed student housing complex last month. The five-story complex is set for completion in the spring of 2027. The university was joined at the groundbreaking ceremony by Vertex Cos., William Rawn Associates and Dimeo Construction. The new residence hall is one of the most significant infrastructure investments in the school’s history.

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Home Depot proposed redeveloping a Showcase Cinema property in Woburn after plans for a 200K SF lab development at the site fell through, Banker & Tradesman reported. The home improvement company plans to subdivide the property to build a 135K SF supply store and 550 parking spaces. The other 7.9 acres would be used for other types of development.

Home Depot acquired the property for $30M in 2024 from National Amusements. In 2021, The Davis Cos. filed plans for a life sciences project at 25 Middlesex Canal Park Drive but didn’t pursue it. 

A JLL report released in October found that roughly 48% of lab space built between 2022 and 2024 remains vacant nationally.