Tech Firm Terminating 130K SF Boston HQ Lease 5 Years Before Expiration
Restaurant tech firm Toast plans to terminate its headquarters lease in Boston's Fenway neighborhood five years before it was scheduled to expire.
The company is planning to vacate 110K SF of its lease at 401 Park Drive on June 30, and then it plans to exit an additional 22K SF by the end of next year. according to a Securities and Exchange Commission filing first reported by the Boston Globe.
Toast agreed to pay $16M as an early termination fee to landlords Samuels & Associates and Alexandria Real Estate Equities.
The company moved its headquarters in 2015 to 401 Park, a 980K SF office and retail building in the Fenway neighborhood, and it rapidly expanded over the next few years. However, in recent years, the tech company has been scaling back its office usage.
Samuels bought the former Sears warehouse in 2011 and redeveloped it. The landlord brought in new tenants like Boston Children's Hospital Trust and Harvard Pilgrim Health Care Institute as well as opening the Time Out Market food hall, the Boston Business Journal reported.
In 2021, Alexandria closed a a $1.5B deal with Samuels to acquire partial ownership in 401 Park and 201 Brookline Ave., a 14-story lab building. At the time of the deal, Alexandria planned to convert part of the 401 Park building to lab space.
A spokesperson for Samuels declined to comment, and Alexandria didn't respond to Bisnow's request for comment.
Toast is the latest tech company to downsize its Boston footprint as tenants rethink the future of their office usage. Big tech companies like Wayfair, Bose and HubSpot have all brought space back onto the market as macroeconomic pressures continue to weaken office demand.
