Real Estate
The City of Boston lost its bid for the $19 million building, saying it hoped to convert it into housing.
A five-story office building at 99 Bedford St. in downtown Boston sold at auction Wednesday for $19 million — below its assessed value and more than $30 million less than it fetched in 2019 — underscoring the continued slump in the city’s office market.
The winning bidder was Bradley Hall, on behalf of Chevron Partners LLC, a real estate development company in Boston, and Capital Hall Partners, a real estate development and investment firm headquartered in Santa Monica, California, with offices in Boston.
The development firms behind the 99 Bedford Manager LLC took on the debt of the building, as recorded in land records on Sept. 3, from Boston Private Bank & Trust Company.
Asked after the auction why the firms decided to keep the building, Hall said, “We like the building,” and added that they plan to renovate it and keep it as offices.
The auction, held by Paul E. Saperstein Co. Auctioneers, was held on Wednesday morning outside the front door of 99 Bedford St.
A group of around 30 people gathered to take part, or at least observe, as the auction took place.
There were three bidders, including the lenders (who ultimately repurchased the building), and the City of Boston.
In the crowd was Sheila Dillion, the chief of housing for the Mayor’s Office, and Kenzi Bok, the administrator at the Boston Housing Authority.
The city was the runner-up — it backed out when the bidding reached $18.75 million.
After the auction, Bok said the city is “very interested in anywhere there’s an office for residential opportunity.”
Bok continued, “The mayor’s very committed to a vibrant, active downtown.”
The city has approved 11 office-to-apartment projects so far as part of its initiative to revitalize downtown by replacing outdated offices with homes.
Asked if the city would have bought this building to create that, Bok nodded. Further clarification on the city’s plans to buy office buildings and convert them to housing did not immediately come.
The Bedford Street building is located steps away from South Station and dates back to 1899. The building has five tenants and a renovated lobby.
According to the Boston Assessor’s Department, the building was last assessed at $22.4 million, down from $27.8 million two years ago.
Mass Land Records show that the building’s mortgage, which initially had a principal of $31 million, was scheduled for foreclosure. The former owners, Credit Suisse Asset Management, purchased the property in November 2019 for just over $50 million.
The auction came as other office buildings downtown have lost value.
In April, Synergy acquired a 32-story tower at 99 High St. for 17% less than the previous owner paid two decades ago. The company also acquired 101 Arch St. for 36% less than the building’s prior purchase price, 1 Liberty Square for 17% less, and 179 Lincoln St. for 40% less.
A Downtown Crossing building at 399 Washington St. also recently sold for one-fifth of its pre-pandemic price.
It appears that the auctioning of office buildings isn’t over yet. On Nov. 18, Paul E. Saperstein Co. Auctioneers will be holding another auction for two abutting properties at 145-55 & 169 Washington St. in the North End.
Bids for the three-story office buildings will begin at 11 a.m.
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