BOSTON — The One Lincoln office tower, one of Boston’s largest and most prominent office buildings, was taken back by a lending group with a $400 million bid at a foreclosure auction held last week.
The auction, reported by the Boston Business Journal, saw an affiliate of the merchant bank BDT & MSD Partners place the sole bid for the 1.1 million-square-foot, 36-story tower located in the heart of downtown Boston.
Previously known as the State Street Financial Center, One Lincoln underwent a significant transformation in 2023 when State Street Corp. moved its headquarters to a newly constructed building in Government Center. Despite this change, the building remains a key asset in the city’s office market.
The outcome of the auction highlights the dramatic devaluation of the property over the last few years. Just three years ago, the building’s former owner, New York-based Fortis Property Group, refinanced the asset for $1 billion. This sharp decline in value—plummeting from a $1 billion refinancing to a $400 million foreclosure sale—underscores the ongoing struggles within the commercial real estate market, particularly in the wake of shifting work patterns and the ongoing impact of the COVID-19 pandemic on office space demand.
Around 50 individuals, including investors, legal representatives, and real estate professionals, gathered on a blustery spring day at Kingston and Bedford streets, just outside one of the building’s entrances, to witness the auction. The proceedings were marked by an unusual level of silence, with attendees standing solemnly as auctioneer Samantha Saperstein hastily played a recorded legal notice at 1.5x speed to expedite the formal reading of the lengthy technical property descriptions. The weather added an extra layer of chill to an already tense and uncertain event.
The fact that there was only one bid—a far cry from the competitive bidding wars that often characterize high-profile auctions—further reflects the challenges the commercial real estate sector is currently facing. The building’s significant devaluation and the lack of competitive offers raise questions about the future of downtown Boston’s office market, which is still adjusting to the lingering effects of remote work and other economic pressures.
BDT & MSD Partners, the firm that acquired the property, is now tasked with determining the next steps for One Lincoln. The building, which was once a hub for major financial institutions, has yet to see the resurgence of demand that could drive a recovery in its value. As the commercial office market continues to evolve in the post-pandemic world, the future of large-scale office spaces like One Lincoln remains uncertain.
This foreclosure auction serves as yet another indication of the shifting dynamics of the Boston real estate market, signaling potential long-term changes in how office spaces will be utilized, leased, and valued in the coming years.
To read the original BBJ article, please click here.
