Boston Office Vacancy Lets Nonprofits Buy Downtown Buildings

Nonprofits are buying downtown Boston buildings at steep discounts

For most of Boston's history, a nonprofit that wanted to own a building in the Financial District or Downtown Crossing had little chance of affording one. The post-pandemic office slump has changed that, at least for a certain kind of building. Several mission-driven groups have bought or leased downtown property in the past two years at prices that would have been out of reach before 2020. Their deals show how the commercial real estate market is repricing older, smaller office stock.

The first notable deal was BreakTime, a nonprofit that helps young adults reach stable housing and work. In December 2024 it bought a six-story former Eastern Bank building on Franklin Street for $6.3 million, less than a quarter of what the property sold for in 2015.12 BreakTime plans to put its own services on three floors and lease other space to a Boston Health Care for the Homeless clinic, so that a young person could shower, do laundry, attend job training and see a doctor in one building.2 Other nonprofit leaders reportedly started asking BreakTime how it pulled off the purchase and whether they could do the same.2

Some of them did. Bridge Over Troubled Waters, which serves at-risk youth, bought 25 West St. for $4.4 million. That was above the assessed value but only a little more than half the asking price.1 This summer, Embrace Boston paid $9.5 million for 33-41 West St. The price was more than double what the buildings fetched in 2023 but only about half their 2016 price.1 Leasing has followed too. The Boston Society for Architecture and Lawyers for Civil Rights (LCR) have both rented downtown space, and LCR will use its space for BizGrow Central, a program for entrepreneurs from historically marginalized communities.1 Iván Espinoza-Madrigal, LCR's executive director, said the project depended on cheaper, more available downtown space that would have been hard to find before the pandemic.1

The vacancy numbers depend on who's counting

All of this rests on the fact that a lot of downtown space is empty, but the figures vary widely depending on the source. Colliers research director Jeff Myers puts downtown vacancy just above 25%. That is down from the past couple of years but still higher than during the 2008 recession, and Myers says downtown asking rents have fallen 19% since the pandemic began.1 JLL reported total Boston vacancy of 23.6% in the second quarter of 2026, after two straight quarters of positive absorption, the first such run since 2019.12 Colliers' own regional report put the availability rate at 23.7%, the lowest since 2024.13

Other firms report lower numbers. Cushman & Wakefield put Greater Boston vacancy at 19.0% in the second quarter. It also found that downtown alone lost 230,000 square feet of net occupancy as more tenants moved out than moved in.18 Lincoln Property Company reported downtown vacancy of 15.8% in the first quarter, but 22.0% of downtown space was available, and the Financial District stood at 25.2%.17 Newmark said first-quarter vacancy in the central business district hit a new high, as tenants gave back space when leases expired and the new South Station Tower was delivered.19

The gaps come mostly from different definitions and survey areas, but they all show the same split. Top-tier buildings are filling up. JLL put availability in that segment at 8.6%, with new leases averaging more than ten years.12 CBRE data shows Class B and C downtown buildings at 28.2% availability, compared with 23.8% for Class A. The higher class absorbed about 1 million square feet in the first half of the year while the lower classes lost ground.26 Cushman found Class A rents up modestly over the year while Class B rents fell 4%.18 Some brokers argue that Boston doesn't have too much office space so much as too many old buildings that should come down, with obsolete pre-1990 stock dragging up the citywide average.14

Taken together, the nonprofit purchases look like the bottom of that split. These are mostly small, older properties in Downtown Crossing, the kind of space corporate tenants have left for newer towers. Nonprofits are buying the inventory the office market has given up on.

Lenders are taking losses

At the large-tower level, the same repricing is happening through foreclosures. Wells Fargo has scheduled an October 20 auction of 100 Summer St., a 32-story Financial District tower that Rockpoint bought for $806 million in October 2019 with a $470 million loan from the bank.2128 The building is 72% leased, and this year's assessment values it at $425 million.2426 The auction is expected to be the largest for a Boston office building in a decade.22

The obvious comparison is One Lincoln. That 36-story tower sold at a March 2025 foreclosure auction for $400 million, about half of the $763 million mortgage placed on it in 2022. The lender was the only bidder and took the building back.2123 Smaller properties have also sold for much less than their earlier prices. A local investor bought 18 Tremont St. for $30 million, compared with the $103 million Jamestown paid in 2019.27 99 Bedford St. sold at auction for $19 million, about 63% below its 2019 price.23

Lenders are still willing to finance buildings where the owner has a credible plan. Synergy bought 101 Arch St. for $78 million in 2024, spent $20 million on upgrades, signed more than 220,000 square feet of leases and then refinanced for $92 million.2526 The common thread is that lenders will back renovated buildings that are attracting tenants, while debt on buildings bought at pre-pandemic prices is being written down through auctions and credit bids.

These losses also give nonprofits their opening. Once lenders and owners accept prices far below their earlier basis, buildings can sell to buyers who were shut out before. The nonprofit deals are at the small end of the same price reset that 100 Summer St. is going through at the large end.

Office REITs are focused on the top tier

The experience of BXP, the large office real estate investment trust based in Boston, shows the healthier part of the market. The REIT signed 1.3 million square feet of leases in the second quarter, 86% of it in Boston, New York and Northern Virginia, including a 120,000-square-foot renewal at 200 Clarendon St.49 BXP President Doug Linde named the Back Bay as one of the submarkets where low availability has pushed net effective rents above both six-month and year-earlier levels.49 Cushman likewise found Back Bay Class A space was the tightest part of downtown, at 13.8% vacancy.18 BXP's biggest recent Massachusetts deal was in the suburbs: a 320,000-square-foot lease with Boston Dynamics at Reservoir Place in Waltham.48

Even so, the REIT's office occupancy slipped 110 basis points from the prior quarter to 87.1%.49 Owners of top-tier space are doing fine, but their results don't show a broad recovery. The older downtown buildings with large vacancies, the ones nonprofits are buying, have mostly not been where institutional investors have put their money.

Housing conversions compete for the same buildings

Nonprofits are not the only buyers interested in this older stock. Boston's office-to-residential conversion program, launched in October 2023, offers a 75% property tax abatement for up to 29 years, along with faster permitting.31 Recent reports put it at 29 buildings and about 1,730 planned units, with six projects under construction.40 The largest proposal is Synergy's plan for about 255 apartments at 294 Washington St. in Downtown Crossing.34 Applications are open through December 31, 2026, and projects must start construction by the end of 2027.31

Conversions have practical limits. Boston has fewer narrow, prewar buildings than New York or Chicago, and deep floors make it hard to bring natural light into apartments.32 Buildings that can't work as housing may find their best buyer is a nonprofit that needs offices, clinic space or program rooms rather than apartments.

Who benefits, and who pays

Nonprofit leaders say the arrivals could make downtown more racially and economically diverse and bring more people to the area's streets and small businesses.1 Last year Mayor Michelle Wu also asked artists, landlords and developers to propose new uses for downtown space, such as recording studios, performance venues and galleries.2

The city's budget is the main concern. Commercial property taxes make up more than a third of Boston's tax revenue, the highest share among major U.S. cities, according to the Boston Policy Institute. Wu drew about $70 million from emergency reserves to close last fiscal year's gap.21 Charitable organizations usually qualify for property tax exemptions. As a result, each building that moves from a commercial owner to a nonprofit may help the neighborhood while shrinking a tax base that falling assessments are already eroding. That fiscal question hasn't featured much in coverage of these deals so far.

Outlook

The nonprofit buying is likely to continue for a while, but only in a narrow part of the market. The top tier is tightening, and analysts are already describing landlord-favorable conditions in premium buildings.1220 The older stock, though, will probably stay cheap while lenders keep resolving loans written at pre-pandemic values, and how 100 Summer St. sells will show how far those values have fallen. Some observers note that sellers who accept discounts now could miss a later recovery.6 For organizations like BreakTime that buy and plan to stay for decades, getting in at the bottom of the repricing matters more than predicting when it ends.