South Station post office relocation takes step forward with proposed Massport land acquisition in Seaport

The relocation of the 14-acre post office distribution facility at South Station, and South Station’s proposed expansion and air rights development, took a step forward last week with Massport’s signing of a Letter of Intent to acquire a 4-acre parcel at 525 E Street in the Seaport District. The parcel is owned by the U.S. Army Corps of Engineers and is located adjacent to 12 acres Massport owns. Massport would in turn offer the combined 16 acres to the U.S. Postal Service as a new home for the 14-acre South Station facility.

The relocation of the facility would enable the planned expansion of South Station by seven tracks and four platforms, which would also present new air-rights development opportunities. Hines and Gemdale Properties will construct an approved nearly 2 million square foot air rights development above the existing South Station; the government-imposed deadline for the developers to break ground was recently extended to December 31st, 2017 from April 30th, 2017.

The long-term leasehold on South Station itself, a 205,165-square-foot office and retail property, was recently listed for sale by current owner Equity Office Management through HFF. South Station’s sale price is expected to exceed $100 million ($407.81 per square foot); the new owner would assume a 98-year interest in the property from the State of Massachusetts, who owns the property. South Station features 117,000 square feet of fully-leased office space across four stories, and 59,000 square feet of ground-floor restaurant and retail space with multiple tenants. The property is coveted due to its’ central location and unrivaled access to public transit.

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