B
oston's One Lincoln office tower, a 36-story, 1.1 million-square-foot building in the heart of downtown, was sold to an affiliate of merchant bank BDT & MSD Partners for $400 million at a foreclosure auction last week.
The sale marks a significant decline in value from its previous refinancing price of $1 billion just three years ago. The tower's former owner, Fortis Property Group, had refinanced the asset in 2020, but the building's value has plummeted due to shifting work patterns and decreased demand for office space following the COVID-19 pandemic.
The auction was notable for its lack of competitive bidding, with only one bid submitted by BDT & MSD Partners. The sale highlights the challenges facing the commercial real estate sector in Boston, where the downtown office market is still adjusting to remote work and other economic pressures.
BDT & MSD Partners will now determine the next steps for One Lincoln, which was once a hub for major financial institutions but has yet to see a resurgence of demand that could drive a recovery in its value. The sale serves as another indication of the shifting dynamics of the Boston real estate market, signaling potential long-term changes in how office spaces will be utilized and valued in the coming years.
The building's significant devaluation raises questions about its future use and potential redevelopment opportunities. As the commercial office market continues to evolve in the post-pandemic world, large-scale office spaces like One Lincoln remain uncertain.
