Owner Of 46-Story Boston Office Complex Launching $100M Renovation To Stay Competitive
The owner of a massive Boston office complex is launching a $100M renovation effort as it prepares to lose its largest tenant.
The Chiofaro Co. told Bisnow Wednesday it plans to begin work in the coming months on renovations to International Place, a 1.8M SF property with two towers reaching 46 and 35 stories tall.
The renovations will include a new 16K SF amenity floor spanning the two towers, a rebuilding of the Fort Hill Plaza and updated lobbies in both towers. In total, the owner said it will renovate 100K SF on the property.
This project is the latest in a series of older office buildings undergoing major renovations to help compete in a market with record-high vacancy where demand has favored newer buildings. The Chiofaro Co. President Don Chiofaro Sr. told Bisnow these new renovations will help the office building attract and retain new tenants in today's changing market.
“We’ve always been in the mix when you think about relocating,” Chiofaro Sr. said. “We expect to be looked at as a choice, we expect that for the future. We know that it is a competitive market, and the way people use space is transitioning.”
The company hasn't secured a loan for the project, but Chiofaro Sr. said it will consider debt options if needed. He said he isn't worried at the moment about securing outside financing for the project.
“We will use what is appropriate at the time,” Chiofaro Sr. said. “We will have the money if we have to put it in. We have it sitting on the sidelines ready to be used. Whether we put some debt on, I don’t know.”
The project comes after the building's largest tenant, investment management firm Eaton Vance, signed a lease in October to relocate to One Post Office Square. Its 340K SF lease at International Place expires in May 2024.
Eaton Vance, which moved to International Place in 2009 from 255 State St., is currently the largest tenant at the complex by roughly 200K SF.
“After [Eaton Vance], it falls off pretty quick. We have two law firms that are roughly 100K SF,” The Chiofaro Co. Vice President Don Chiofaro Jr. said. “The vast majority of tenants in this building are 20K SF.”
Chiofaro Jr. said the firm is in talks with multiple tenants about the space but he is doubtful that one tenant will lease all of the space Eaton Vance is vacating.
“We have definitely talked to tenants about the space,” Chiofaro Jr. said “It’s not going to be a 300K SF tenant that comes in and uses that space. It’s going to be multiple tenants.”
The renovations are broken down between the two office towers, including modernizing both lobbies and bringing in new retail storefronts as well as an 8K SF restaurant that will be built. The project will also include the Fort Hill Plaza, which will be entirely rebuilt as an all-glass complex centered between the two towers.
The buildings will also get a new amenity center, The Aries Club, which will offer 16K SF of exclusive workspace, a members’ lounge, flex spaces, conferencing event space, wellness offerings, a bar and a 3K SF outdoor terrace. Chiofaro worked with Gensler to design the renovations.
“This has been a culmination of three years worth of feedback and significant study and tenant input,” Chiofaro Jr. said. “We know that this is what our occupants want.”
Chiofaro’s renovations come at a time where many office landlords are rethinking their assets as vacancies continue to rise amid economic turmoil and the rise of remote work.
In September, Fortis Property Group and investor David Werner secured $1B in refinancing with MSD Partners to repay existing debt and provide over $200M in upgrades to its 19-year-old One Lincoln Tower. They also secured a new tenant, HarbourVest Partners, with a 250K SF lease on 11 of the building’s 36 floors.
One Post Office Square, the Financial District building that landed the Eaton Vance lease, is undergoing a $300M adaptive reuse project. The development team including Anchor Line Partners transformed the 41-year-old building's exterior from concrete to glass.
Chiofaro Sr. plans to begin work in the coming months on its project. The renovations will be done in phases with the two lobby upgrades happening first, the Fort Hill and IP Commons renovations second, and the build out of the restaurant and The Aries Lounge will come after that.
“I think depending on how many phases we can overlap, it should take about two years,” Chiofaro Jr. said.
Chiofaro Sr. developed International Place in phases between 1987 and 1992 and has owned it since. Chiofaro Sr. said there have been numerous renovations to the building to keep it competitive, including the addition of the Palm Restaurant and a raised tunnel on the second floor for a tenant.
Looking forward, Chiofaro Sr. said he isn't worried about the future of International Place because of its location and these new improvements will keep the officer towers competitive.
“We’ve been through high vacancy rates, high interest rates and we’ve been through five recessions,” Chiofaro Sr. said. “This period of time we are in now is notable and should not be ignored but we are not afraid of it. We see it as a challenge.”
