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Nuveen Sells Building For $41M In Boston's First Office Sale Since Early 2022

70 Federal St., also known as 7 Post Office Square.
70 Federal St., Also Known As 7 Post Office Square.

A rare office building sale in Downtown Boston could signal renewed interest in a market that has struggled since the beginning of the pandemic.

Miami-based investment firm Azora Exan bought 70 Federal St., also known as 7 Post Office Square, for $41M from an affiliate of Nuveen Real Estate, JLL announced Wednesday.

The deal, first reported by the Boston Business Journal, marks the first office building to sell in Boston since early 2022, according to JLL. The brokerage firm's Chris Angelone, Coleman Benedict, Scott Carpenter, Scott Tully Jr., Brooke Howard and Rachel Bliss worked on the deal on behalf of Nuveen.

“7 Post Office Square is the perfect example of the opportunity that we see to buy trophy office buildings in prime locations,” Azora Exan Managing Partner Ignacio Gil-Casares said in a statement. “We want to continue this opportunistic strategy in select markets.”

The 64K SF building is 91% leased by eight tenants, including anchor tenant Fidelity, InterContinental Insurance Brokers and Wilson Butler Architects. The building's vacancy rate is lower than the average in Boston's Central Business District, which was just shy of 16% last quarter, according to CBRE.

“7 Post Office Square offers exactly what investors are seeking in today’s market: best-in-class product with long-term lease and strong tenancy,” Nuveen Senior Director Ines Olesen said in a statement.

Although the deal is a positive sign for the city's office market, its sale price represents a 7% return for Nuveen from the $38M it bought it for in 2016, and that doesn't include its investments in the building, BBJ reported, adding that this is below typical office returns in the past.

Only two other Boston office buildings traded hands last year, and they sold early in the year for conversion projects, according to BBJ: 55 Summer St., which is proposed for a partial office-to-lab conversion, and 125 Tremont St., which is set to become a Holocaust museum.

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