Downtown Boston office vacancies create opening for nonprofits
Add Axios as your preferred source to
see more of our stories on Google.
Photo: David L. Ryan/The Boston Globe via Getty Images
Boston-area nonprofits are capitalizing on office vacancies downtown.
Why it matters: Office vacancies and, in some cases, steeply discounted building sales have created an opening for nonprofits to buy or lease in a pricey real estate market.
Catch up quick: The market conditions created the perfect opportunity for BreakTime, a nonprofit that helps young adults achieve stable housing and economic mobility.
- The organization bought a six-floor building from Eastern Bank in late 2024 for $6.3 million, less than one-fourth of its 2015 price.
- Bridge Over Troubled Waters, a nonprofit serving at-risk youth, bought 25 West St. in October for $4.4 million, above its assessed value but just over half of the asking price.
State of play: More nonprofits have moved downtown this year.
- Embrace Boston bought the buildings at 33-41 West St. this summer for $9.5 million.
- That's more than twice what the buildings sold for in 2023, but just over half of what they sold for in 2016, per property records.
Yes, and: Two nonprofits — the Boston Society for Architecture and Lawyers for Civil Rights — are renting space downtown, not far from planning and design firms Sasaki and Utile.
- The latter will support BizGrow Central, LCR's program supporting entrepreneurs from historically marginalized communities.
What they're saying: Iván Espinoza-Madrigal, LCR's executive director, declined to discuss the terms of the lease, citing a confidentiality clause, but said market conditions didn't hurt.
- "I strongly believe that this intervention is possible because of more affordability and availability of space in the downtown core that would have been difficult to achieve before the pandemic," he said.
The big picture: Downtown's vacancy rate is hovering just above 25%.
- That's lower than the last couple of years but still above what it was during the 2008 recession, even as developers pursue office-to-residential conversions, said Jeff Myers, research director at Colliers.
- Boston's job market, which lags behind the national employment rate, has complicated downtown's recovery, per Colliers' Q2 office market report.
Follow the money: Those savings may have also trickled down to commercial tenants.
- Downtown asking rents are down by 19% since the start of the pandemic, Myers said.
Yes, but: The influx of nonprofits may make the neighborhood more racially and economically diverse, nonprofit leaders say.
- "We want BizGrow Central to help activate Downtown Crossing to create more opportunities for people to come downtown and stay downtown and help support small businesses," Espinoza-Madrigal said.
What we're watching: Mike Nichols, president of the Downtown Boston Alliance, says commercial real estate prices are rebounding and opportunities for discounted buildings may vanish.
- Myers said that's unlikely, noting there's still millions of square feet available downtown.
- Still, Nichols added, he sees opportunities for creative organizations to come in and help build a vibrant downtown. "We welcome it."