Synergy acquires Bulfinch Triangle building for one-third of its assessed value
A Boston investment firm has added to its streak of acquiring deeply discounted assets as it continues to wager on the city’s office market rebound.
Synergy Investments has purchased a property in Boston’s Bulfinch District for a price equal to roughly one-third of its assessed value. The firm paid $22.5 million for the partially occupied building at 101 Merrimac St., highlighting Synergy’s confidence in the market’s accelerating recovery.
The 163,500-square-foot property was last assessed at $64 million, local records show. That figure falls below the $75 million valuation used when seller H.N. Gorin — the building’s original developer — sold a 50% interest to Artemis Real Estate Partners roughly ten years ago.
The acquisition, which includes the attached parking garage, reflects the headwinds Boston’s office sector has faced as it works to stabilize post-pandemic. It also signals growing investor appetite to capitalize on the market’s improving trajectory.
Synergy has been among the most active buyers in the region, purchasing discounted buildings and repositioning them through upgrades and refreshed strategies.
“This acquisition expands our value-add portfolio and positions us to fully realize the building’s potential through thoughtful upgrades and proactive asset management,” said Matthew Godoff, Synergy’s head of investments.
Upgraded bet
Synergy’s broader “buy-and-improve” approach mirrors strategies used by investors nationwide who are looking to get ahead of an anticipated office-sector rebound.
High financing costs, economic uncertainty, and lingering post-pandemic caution have slowed new office development across the United States. As a result, the national construction pipeline has dropped to its lowest level since 2011, with only 57 million square feet underway, according to CoStar analysis—a 65% decline from peak activity.
This slowdown comes at a moment when tenant demand for high-quality office space has surged to levels not seen in more than five years. While leasing has not fully returned to pre-2020 levels, the 12 million square feet of deals signed in the third quarter marks the strongest activity since 2019. National vacancy, hovering around 14%, appears to have plateaued, CoStar research shows.
Investors in markets such as San Francisco, New York, Atlanta, and Washington, D.C. have taken advantage of falling valuations to purchase distressed properties, invest in renovations, and reintroduce them to the market with upgraded amenities. Boston has followed suit.
Boston’s office sector was hit hard in the early pandemic years, with tenants returning large volumes of space and withdrawing from leases. Combined with flat leasing demand, an influx of new construction, and prominent move-outs, the city’s vacancy rate climbed to a record 15%, more than double pre-2020 levels.
As many investors pulled back, Synergy continued expanding its local portfolio. The firm purchased the 99 High St. tower this spring for $227 million, where it is adding a full floor of amenities and has already secured 80,000 square feet of new leases.
Synergy also acquired the downtown property at 101 Arch St. for $78 million, a significant discount from the $122 million price roughly two decades earlier. It has since revamped the lobby and is preparing to unveil a new fitness and wellness center.
Source: Original reporting by Katie Burke, CoStar News.
