BGO, Synergy Land $375M Loan Extension for Boston Asset
BGO and Synergy Investments have secured a $375 million four-year extension on their loan for Center Plaza, a 741,200-square-foot office property in downtown Boston.
The two firms acquired the asset featuring three interconnected buildings from Shorenstein Properties in 2017 for $365 million. They didn’t disclose the source of the new financing but in February 2021 Commercial Observer reported KKR provided the partners with a $375 million loan to refinance the property.
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Built between 1965 and 1972 and renovated in 2020, Center Plaza has nearly 900 feet of frontage along Cambridge Street and a 575-space parking garage. Each of the nine-story buildings, which have a distinctive curved design, comprises about 252,000 square feet of office space and 25,666 square feet of retail. Amenities feature communal outdoor and lobby spaces, a fitness center and several restaurants including The Dubliner and Caveau.
Leasing up
The LEED Gold-certified property is currently 90 percent leased, significantly surpassing the city’s average rate. In the second quarter, the average leased rate reached 79.5 percent in the downtown Boston submarket, according to the Newmark brokers in charge of leasing at Center Plaza. In the past 12 months, Synergy signed eight lease agreements totaling 136,000 square feet, including 117,000 square feet of renewals and 18,000 square feet of new deals.
Located at 1, 2 and 3 Center Plaza, the office complex is adjacent to the newly renovated Boston City Hall and across from Government Center Station. The John F. Kennedy Federal Building and Suffolk University are also nearby.
Strong office market
Boston’s office sector had a strong showing in the first five months of this year, according to CommercialEdge information. The market led the nation for pipeline size and ranked second and third for completions and sales, respectively. The metro also posted the lowest vacancy rate among top U.S. markets, with about 12.1 percent as of May.
The office pipeline totaled more than 13.6 million square feet representing 5.4 percent of stock, more than four times the national average of 1.2 percent. During the same month, only 83.8 million square feet of office space were under construction across the U.S.
Boston’s vacancy rate as of May clocked in at 12.1 percent, well below the 17.8 percent national average. Even though this marked a 180-basis-point increase year-over-year, the metro had the lowest vacancy rate among gateway markets.
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