Tishman Speyer Lands 106K SF Lease In Downtown Boston Office Tower
Six state agencies are relocating to a 1970s-era downtown Boston tower in the biggest new office lease in the city this year.
Tishman Speyer landed a 10-year, 106K SF lease with the commonwealth of Massachusetts at the 38-story One Federal Street tower, the landlord announced Wednesday.
From two buildings in the South End and Back Bay, the state is relocating the Division of Banks, the Department of Telecommunications and Cable, the Division of Standards, the Division of Licensing, the Division of Insurance and the administrative offices for the Office of Consumer Affairs and Business Regulation.
The agencies are reducing their total square footage by 24K SF with the deal, The Boston Globe reported. They are taking two floors that were previously occupied by data company Iron Mountain, which quietly shifted its headquarters to a smaller space in Portsmouth, New Hampshire, and has many employees working remotely, the Globe reported.
The buildings losing the state agencies are 1000 Washington St., which BioMed Realty acquired in 2021 and filed lab conversion plans for last year, and 501 Boylston St., owned by Nuveen Real Estate and Norges Bank.
Tishman Speyer acquired One Federal Street in 2006 for $514M. It signed Iron Mountain to a 129K SF lease in 2012, but its 11-year term expired last year.
Built in the 1970s, the 1.1M SF tower was once home to Shawmut Bank's headquarters before it was acquired in the 1990s. When Tishman bought it, the building was occupied by Bank of America, State Street Corp., Credit Suisse, Bear Stearns and Fidelity Investments.
The office tower today features retailers Eastern Bank, Potbelly, Luma’s, Josie Green's Marketplace and EverybodyFights, and it has a private event venue on the ninth floor.
“One Federal’s efficient and sustainable design, robust amenities, and premier location create the ideal environment for these Commonwealth agencies to come together,” Tishman Speyer Managing Director Jessica Hughes said in a statement.
Tishman’s Jeffrey Moore and Victoria Robinson represented the landlord in the lease.
The deal represented the city's largest new office lease so far this year, the Globe reported, citing research from Hunneman. There has been at least one larger lease renewal, Converse's 215K SF deal in the 1 Lovejoy Wharf building.
Boston's office market has struggled with low demand and rising vacancy in recent years. The city's vacancy rate at the end of Q2 stood at 17.7%, according to CBRE's latest market report, up from roughly 14% at the same time last year and 11% at the same point in 2022.
Older office buildings like One Federal Street have begun to capture stronger demand in recent quarters as tenants seek affordable rents and some new owners offer discounted rates and concession packages.
