Bulfinch Crossing Will Eventually House State Street’s Global Headquarters
State Street Corp., one of Boston’s oldest financial services companies, is giving developers reason to move forward with what will become one of the most modern marks on the city’s skyline.
The financial services giant announced Wednesday it will relocate its global headquarters in 2023 from the One Lincoln Street tower it currently calls home to One Congress, a 43-story, 1M SF office tower expected to break ground this summer. State Street signed a 15-year lease for 510K SF in the bottom half of the $900M skyscraper, which will replace a portion of the Government Center Garage.
“State Street has called Boston home for 226 years, and today’s announcement reinforces our continued commitment to this thriving and distinctive city,” State Street CEO Ron O’Hanley said in a statement. “The workforce of the future is pushing us to rethink how and where we operate. Employees in today’s highly digitized world need space to collaborate and access state-of-the-art technology that supports flexible working and connectivity to support our clients.”
State Street expects One Congress’s design and infrastructure features to allow the financial firm to have a reduced operating and occupancy costs at a time when the company is working to cut expenses. It announced last week it would lay off 1,500 employees.
State Street’s deal with the development team includes signage rights over the tower, pending Boston Planning & Development Agency approval. The financial firm’s name is brightly lit over One Lincoln and hung atop its previous headquarters at 255 Franklin St. for decades.
The 528-foot, sweeping glass-curtained One Congress was designed by Pelli Clarke Pelli Architects and CBT and owned as a joint venture between Washington, D.C.-based National Real Estate Advisors and Carr Properties. The HYM Investment Group is the Boston developer on the tower and also works with National Real Estate Advisors on what will ultimately be the 2.9M SF Bulfinch Crossing mixed-used development.
As for what tenants may eventually join State Street, the One Congress team is keeping an open mind.
“Boston is a little different now from when I started 25 years ago,” National Real Estate Advisors CEO and President Jeffrey Kanne said. “Back then, it was dominated by law firms and financial service companies. Now you’re just as likely to sign a biotech firm as you are a law firm. It’s a reflection of the immense amount of intellectual capital Boston has fostered.”
Kanne and HYM Investment Group Managing Director Thomas O’Brien said talks began with State Street a year ago. The company was considering staying at One Lincoln, but O’Brien said a clean move to One Congress offered better logistics than moving people around as the company went through a floor-by-floor renovation to turn its current headquarters into the open-office layout it desired.
“It can be a long, five-year process and can mess with your organization as opposed to watching us build the building for four years and then hand them the keys,” O’Brien said.
State Street also has offices at 100 Summer St. in downtown Boston and the One Channel Center in the Seaport. The Summer Street lease expires just as the company is expected to move into One Congress, but operations at One Channel Center will continue given the company’s long-term lease there through 2030.
One Congress is the latest in a round of high-profile Boston office projects to move forward. Millennium Partners is underway with the 691-foot Winthrop Center, WS Development is at work on a 430K SF Seaport Square office building for Amazon and Boston Properties will soon break ground on a Verizon-anchored office tower at Hub on Causeway.
Carr Properties made its Boston debut in September with the One Congress investment and followed it up in November with the acquisition of 200 State St., a 304K SF office building in downtown Boston. While some economists may caution of a looming correction, Carr Properties CEO Oliver Carr said he’s committed to expanding into Boston.
“Nobody has a crystal ball. The reason we’re moving into that market is because the Boston fundamentals are so strong,” Carr said. “It’s not oversupplied. There’s been some level of construction in the Seaport, but, broadly, there’s an equilibrium of supply and demand.”