Tall & Urban News

One Lincoln Street, a 503-foot (153-meter) office tower that has long been a defining feature of Boston’s skyline, is up for auction this week due to unpaid debt. Fortis Property Group, which refinanced the 36-story building for 1 billion USD in 2022, has struggled to fill the space, with the property remaining about half vacant even after securing HarbourVest as a major tenant. The auction is expected to result in a sale at a significantly lower price than its previous valuation.

Boston's office market has faced challenges since the pandemic, with demand for office space declining and the vacancy rate reaching 21.1 percent, according to real estate firm Newmark. Rising interest rates have further complicated refinancing efforts, leaving many landlords in financial distress. Industry analysts estimate that downtown office buildings could sell for 40 to 60 percent below their pre-pandemic values.

The decline in commercial property values has major implications for Boston’s finances, as property taxes account for 71.1 percent of the city's 4.6 billion USD budget. In response, city officials have considered raising commercial tax rates to offset potential revenue losses.

Despite the downturn, some investors see an opportunity in the market reset. Norges Bank, for example, recently acquired office properties in Boston at significant discounts. Additionally, some landlords are shifting away from traditional office use, with plans to convert properties into hotels or lab spaces to attract tenants.

One Lincoln currently owes more than 15 million USD in property taxes for the fiscal year, underscoring the broader financial strain on Boston’s commercial real estate sector as it undergoes a major transformation.

Learn more at Boston Globe

Update: One Lincoln Street was sold at auction on 21 March 2025 for US$400 million to its lender.