The second phase of the South Station air rights development will likely include space for life sciences and multi-family housing, rather than a planned hotel.
As it marked a major milestone in the construction of the 678-foot-tall office and condo tower slated for completion in 2025, developer Hines plans to propose modifications for the next phase of the landmark rights project. flights to New England’s busiest transit hub.
David Perry, senior general manager of Hines’ Boston office, said the developer hopes to begin construction of the second phase before the completion of the first tower, which now rises behind the station headquarters and whose completion is expected in 2025.
Uncertainties over future demand for the hotel development prompted the Houston-based developer to consider a shift in future phases of the project, Perry said after a groundbreaking ceremony marking a milestone in the construction of the first tower.
Currently, the second phase, which will be built east of the office and condominium tower, is approved for a 473,000 square foot hotel and condo building.
Governor Charlie Baker and Boston Mayor Michelle Wu attended Tuesday morning’s ceremony acknowledging progress on the long-envisaged transit-oriented development.
Hines began work on the site in 2020 after rreceiving $870 million in construction funding for the project, envisioned since the 1970s. The 678-foot-tall tower includes 768,000 square feet of office space and 347,000 square feet of residential condo space.
Discussions about building above the commuter railroad tracks behind the station headquarters began after the City of Boston acquired the property in the 1970s.
“In the 30 or 40 years that this project has been around, part of the reason it hasn’t been done is that it’s extremely difficult and comes with all kinds of financial risk, d ‘operation, construction, etc.,’ Boulanger said. ‘There was frankly a lot of doubt as to whether anyone would be willing to take the risk associated with building this.’
John Fish, CEO of Suffolk Construction, called the project the most complex his company had worked on in 40 years.
State transportation officials spent about three years developing plans to keep the commuter rail, subway and bus terminal operating during construction, Baker said.
The office portion of the tower, occupying floors 12 to 34, is marketed by Cushman & Wakefield and is 100% available. Perry said the developers are willing to accept single-story rental proposals, or about 29,000 square feet.
Vacancies and sublease offers increased in 2020 as businesses emptied downtown Boston offices at the onset of the COVID-19 pandemic.
Boston’s office availability rate reached 15.6% in the second quarter of 2022, according to research by Colliers. There are 3.6 million square feet of new construction underway, including the 1 million square foot One Congress tower, which is fully leased.
MP Boston has signed three tenants in its Winthrop Center skyscraper at 115 Federal St., which contains more than 800,000 square feet of office space.
Developers of two other downtown Boston office towers are updating them with new amenities such as outdoor patios to fill major existing vacancies.
Fortis Property Group refinanced its One Lincoln office tower this month and announced a $200 million capital improvement program for new anchor tenant HarbourVest and future tenants.
One Post Office Square is add a new facaderooftop terraces, a new restaurant and retail space and automated parking.