South Station Air Rights

South Station Air Rights Acquired for $35.35 Million, Receives Financing for $870 Million, Plus a $531M Building Permit is Pulled

Hines has acquired the South Station air rights for $35.35 million with an additional $870 million in project financing from CIFF Investments. Hines has also pulled a building permit for the first phase of the project -- the new high-rise office and residential tower over the commuter rail tracks and platforms. The current bus terminal and parking structure above the rail tracks will also be expanded as part of the project. The permit is valued at  $531,845,387.00.

The South Station Air Rights project will bring three new buildings to Boston's Financial District above the existing South Station transit, office and retail center:

• A 51-story, 677-foot tall, 1,032,000 square foot tower (Phase One) consisting of office, residential and retail space. 175 residential condominiums will be located above 704,000 square feet of office space and 7,000 square feet of ground-floor retail.
• A 17-story, 334-foot tall, 438,000 square foot building (Phase Two) with one of the following four compositions, in addition to 8,000 square feet of ground-floor retail
• A nine-story, 249-foot tall, 511,000 square foot building (Phase Three) consisting of office space and 12,000 square feet of ground-floor retail.

MBTA Expects Construction on South Station Project to Kick Off This Fall

During a recent recording of The Big Dig Podcast, Peter Paravalos, Director of Transit-Oriented Development for the MBTA told BLDUP he expects construction on the first phase of the South Station project to kick off this fall. This first phase includes the expansion of the bus terminal by 106,000 square feet and the expansion of the existing parking garage by 895 spaces. 

The next phases of this much-anticipated development will include a 51-story tower, consisting of office, residential and retail space. This tower will feature 175 condos located above 704,000 square feet of office space and 7,000 square feet of ground-floor retail. Two additional towers are also planned, one a 17-story, 438,000 square foot building and the final phase of the project a nine-story, 511,000 square foot building consisting of office space and 12,000 square feet of ground-floor retail.

Want to hear more on transit-oriented development, check out our most recent episode of The Big Dig.

Ashkenazy acquires South Station office and retail leasehold for $119 million

Ashkenazy Acquisition Corporation, owner of the ground leases of Boston's Faneuil Hall and Washington DC's Union Station, has acquired the 98-year leasehold interest on the 205,165-square-foot office and retail component of Boston's South Station from longtime owner Equity Office Management for $119 million. The sale amounts to approximately $580 per square foot; Citi Real Estate Funding provided $75 million in funding towards Ashkenazy's acquisition. Equity listed the leasehold for sale through Holliday Fenoglio Fowler, L.P. (“HFF”) in April, expecting to fetch around $100 million ($407.81 per square foot).

South Station’s office and retail component 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, including restaurants Au Bon Pain, Auntie Anne’s, Dunkin’ Donuts, McDonald’s, Pret A Manger and Starbucks, and retailers Bank of America, Barbara’s Bookstores, Citizens Bank and CVS/pharmacy. South Station features unparalleled public transportation access and a prime location in the heart of Boston’s Financial District steps to Fort Point and the Seaport District.

South Station is poised for a nearly 2-million-square-foot air rights development, which will be developed by Hines and Gemdale Properties. The development's first phase, a 51-story, 677-foot tall, 1.032-million-square-foot tower featuring 175 condominium residences, 704,000 square feet of office space and 7,000 square feet of ground-floor retail, is expected to break ground by the end of this year.

Ashkenazy acquiring 205,165-square-foot South Station leasehold for nearly $125 million

Ashkenazy Acquisition Corporation, who owns and operates Faneuil Hall, will acquire the 205,165-square-foot office and retail component of South Station, a central Boston transit hub poised for a nearly 2-million-square-foot air rights development, for nearly $125 million ($609.27 per square foot). Seller Equity Office Management listed the 98-year leasehold interest on South Station for sale through Holliday Fenoglio Fowler, L.P. (“HFF”) in April, expecting to fetch around $100 million ($407.81 per square foot). Ashkenazy and Equity’s deal will require approval from the Massachusetts Department of Transportation (MassDOT), owner of South Station, to move forward.

South Station’s office and retail component 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 asset benefits from unparalleled public transportation access and a prime location in the heart of Boston’s Financial District steps to Fort Point and the Seaport District. The first phase of the 1.981-million-square-foot South Station Air Rights development, a 51-story, 677-foot tall, 1.032-million-square-foot tower featuring 175 condominium residences, 704,000 square feet of office space and 7,000 square feet of ground-floor retail, is expected to break ground by the end of this year.

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.

South Station Air Rights receives City zoning approval, awaits State approval to start construction

The Boston Planning & Development Agency (BPDA)'s Zoning Commission approved the nearly 2 million square foot South Station Air Rights development last Wednesday, the final city approval required to start construction. Financing has been secured for construction of the project's first phase, a 677-foot tall mixed-use tower facing Dewey Square. Per developer Hines' agreement with the Massachusetts Department of Transportation (MassDOT), Hines must now receive State of Massachusetts approval for the project and start construction of the first phase by April 30th. Otherwise, Hines could lose its' right to build the project.

South Station Air Rights development approved, groundbreaking expected Q2 2017

Modifications to the approved South Station Air Rights development in the Financial District were approved at Thursday (December 15th)’s Boston Planning & Development Agency (BPDA) Board Meeting. The revised project’s first phase, a 51-story mixed-use office, residential and retail tower, is expected to break ground in the second quarter of 2017 pending final approvals from the Commonwealth of Massachusetts.

South Station Air Rights changes proposed, construction could start 2017

Developers Hines and Gemdale Properties today submitted a Notice of Project Change (NPC) to the Boston Redevelopment Authority (BRA) proposing modifications to the South Station Air Rights project; the following is a link to the NPC. Major changes include up to 589,000 additional square feet of residential space and the associated addition of 140 parking spaces. Three buildings would still be constructed across three phases, including the main 677-foot tall Phase 1 tower atop the historic South Station terminal. Construction of the Phase 1 tower could start in 2017 and would take four years.

As previously proposed, the entire project would contain hotel, office, residential and retail space. Total project square feet have increased to 1,981,000 from previously proposed 1,765,000. Residential space has increased significantly to up to 751,000 square feet containing 435-550 condominium or rental units from previously proposed 162,000 square feet containing 127 units. Market conditions would determine whether condominiums or rentals are built and whether some of the space changes to hotel rooms; the project could contain up to 430,000 square feet of hotel space containing 360 rooms. Retail space has also increased to 35,000 square feet from previously proposed 26,000. Office space has decreased by 154,000 square feet to 1,203,000 from 1,357,000.

The Phase 1 tower, previously proposed to only contain office and retail space, would now also include residential units on upper floors. The previous proposal called for a 920,000 square foot tower including 912,000 square feet of office space and 8,000 square feet of retail. The Phase 1 tower would now contain a total of 1,032,000 square feet including 175 residential units across 321,000 square feet, 704,000 square feet of office space and 7,000 square feet of retail. The 677-foot Phase 1 tower's proposed height has not changed; however, owing to the addition of residential space, two floors have been added to the Phase 1 tower, which would now rise a total of 51 stories.

Phases 2 and 3 would be constructed atop the existing South Station parking garage. Phase 2 would construct a 17-story, 334-foot tall, 438,000 square foot building that could contain hotel space, residential space or both depending upon market conditions. The all-hotel building could contain 360 rooms; the all-residential building could contain 260 condominiums or 375 rental units. All Phase 2 proposals call for 8,000 square feet of ground-floor retail. The previous proposal called for 127 residential units, 200 hotel rooms and 8,000 square feet of retail in the Phase 2 building. Height has increased slightly to 334 feet from 308.

Phase 3 would construct a nine-story, 249-foot tall office building as previously proposed. Square footage has increased slightly to 511,000 square feet (including 12,000 square feet of retail) from previously proposed 455,000 square feet (including 10,000 square feet of retail).

As part of the project, the South Station bus terminal would be expanded by 106,000 square feet, up from previously proposed 70,000. The parking garage would be expanded by 895 spaces, up from previously proposed 755 to accommodate the additional residential space.

The following is the latest rendering of the Phase 1 tower:

South Station Air Rights moves forward as China's Gemdale Properties joins project team

At last night's board meeting, the Boston Redevelopment Authority approved the addition of major real estate developer and investor Gemdale Properties of China to the South Station Air Rights project team. Per The Boston Globe, the proposed project plan could soon be modified to include more housing and less office space. Tim Logan reports that the development team is "actively working on the project" and aims to obtain all necessary permits and start construction as soon as possible.

Update: The Boston Globe now reports that revised South Station Air Rights plans could include 175 condominiums on upper floors, up from proposed 155. The tower could rise 51 stories, up from proposed 49. The tower could contain 530 parking spaces, down from proposed 755.

More information about the South Station Air Rights proposal is posted below.

South Station Air Rights work could start early 2017

The South Station Air Rights project page on developer Hines' website has been updated with new details, including an anticipated construction commencement date of early 2017. A commencement date was not listed on Hines’ previous website, which was live as recently as last month. The previous website claimed that "market demand will dictate the timing of construction commencement" for the project.

The South Station Air Rights project description on Hines' website has changed as follows:

• 49-story office tower square footage has decreased from 980,000 square feet to 970,000
  
• In addition to 155 residential condominium units, 200 hotel rooms are now planned for the residential building
  
• Square footage of a second office building has increased from 500,000 square feet to 520,000 square feet
  
• Planned parking spaces have increased from 713 to 755

The new details are in line with a project amendment approved by the Boston Redevelopment Authority in June 2014. With the amendment's approval, the project's land disposition agreement was extended through June 30th, 2016.

Hines' new website has been live since late February 2016. A higher resolution project architectural rendering, posted above, was also posted on Hines' new website as part of the update. The following is a link to an archive of the South Station Air Rights page on Hines' previous website. Additional information about the South Station Air Rights project is posted below.