Another downtown office tower, at 99 High Street, just sold at a deep discount - The Boston Globe (2025)

In what has widely been viewed as a bellwether transaction for the beleaguered downtown office market, Boston real estate firm Synergy has closed on its long-anticipated acquisition of the 32-story tower at 99 High St. on Thursday for $227 million.

Synergy is assuming the mortgage from MetLife Real Estate Lending LLC, according to Suffolk County property records. It’s acquiring the 730,000-square-foot tower for 17 percent less than the $273 million the building’s prior owner, Nuveen — the real estate arm of teachers’ retirement behemoth TIAA — paid two decades ago, and for $100 million less than the tower’s assessed value of $327.7 million.

“This is one of the best buildings on the market that’s not new construction,” said Synergy CEO Dave Greaney in an interview.

99 High fronts the Rose Fitzgerald Kennedy Greenway, with its upper floors boasting views of both the Greenway, the Boston Harbor and Fort Point Channel. The tower is the second downtown office tower to sell since the pandemic and is widely considered key indicator for downtown office values. It is 78 percent occupied with tenants including Mercer, Marsh McLennan, AIG, and Karuna Therapeutics.

Synergy won the bid to acquire the tower back in November, but the complicated transaction just closed this week. A $227 million deal equates to about $311 per square foot, $63 less than TIAA paid in April 2005 for the property.

“That new per-square-foot (rate) in the low $300s is turning out to be the new normal as of late, especially for a building sale of this size,” said Dion Sorrentino, the associate director of market analytics with real estate data firm CoStar Group in Boston. “It’s well located. It’s near transit. It’s downtown. It has a decent tenant base in it. This is what we’d expect to trade in a normal market.”

As more office buildings come on the market this year, their values are being closely watched, in no small part due to the implications for Boston’s property tax base and $4.8 billion city budget. More than two-thirds of city revenue comes from property taxes, much of it on large commercial buildings. If their value falls, so too could revenue needed to pay for city services.

Synergy has been among the few buyers of downtown commercial office space since the COVID-19 pandemic upended office markets. Since late 2023, Synergy has acquired 101 Arch St. — for 36 percent less than the building’s prior purchase price — 1 Liberty Square (17 percent less), and 179 Lincoln St. (40 percent less). The pricing for the 99 High St. could be echoed in the forthcoming sale of the joint towers at 75-101 Federal St., Sorrentino said.

Greaney said it’s never been more difficult to secure debt financing to buy an office building, but that some equity investors who have shied away from the sector in recent years have started to reconsider it as “an acceptable asset class” now that prices have fallen.

“They feel that the basis has fallen to a point where it makes sense and justifies the risk, and that the fundamentals are looking like they may improve,” Greaney said. “Institutional equity will always have a place in quality office assets in gateway cities.”

For its part, Nuveen invested at least $24 million in upgrades to 99 High St. in the past decade, including a 2019 lobby renovation designed by architecture firm SGA. A leasing brochure from brokerage CBRE, dated to last May, touts the tower’s monthly tenant appreciation events and a building app, “16 new high-speed, high-efficiency elevators” and “below market electric costs.”

At 32 stories, 99 High St. is the tallest building Synergy’s ever acquired, Greaney said. But he’s got his eye on others.

“I think anybody who has an office building that’s a good size, good asset, good location‚ we should be talking to them, if we’re not talking to them already,” he said. “I don’t think you’re going to see an avalanche of deals coming, but I do know of a half-dozen deals that are going to come on the market this year.”

Catherine Carlock can be reached at catherine.carlock@globe.com. Follow her @bycathcarlock.