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A Compendium of Property & Capital News
Jul 1
A Compendium of Property & Capital News

Sources: Amazon to Lease 150,000-SF+ at 253 Summer St. in Hub from Synergy

June 28, 2017 - By Joe Clements
253 Summer St.; Boston MA

BOSTON—Amazon.com Inc. has apparently found its Hub home down by the sea, with market watchers telling Real Reporter the Internet giant has committed to lease more than 150,000 sf at 253 Summer St. overlooking Fort Point Channel at the gateway to Boston’s transformational Seaport District.

The one-time warehouse with a distinctive yellow brick facade is owned by Synergy Investments, the prolific Boston group founded by David Greaney scoring yet another major victory on the office leasing front. “It is huge for the landlord,” maintains one market watcher tracking the negotiations, among those insisting Amazon has settled on 253 Summer St. A letter of intent has been signed, according to multiple sources, including the observer spoken to who says the pact will fill all the remaining space in Synergy’s building.

“I know it is done,” the observer spoken to maintains regarding a letter of intent launching formal talks, and the industry professional opines the process is so far advanced, an actual lease may have been tendered already. “If it hasn’t, they must be a whisker away,” says the source, a status that remains unconfirmed officially. Calls to Synergy and their exclusive leasing agents at CBRE/NE were not returned by press deadline. JLL is said to be advising Amazon on its highly publicized requirement that follows up on the company signing a temporary lease at a WeWork operation.

Details regarding terms of the permanent agreement remain sketchy regarding whether there are any fit out allowances and tenant occupancy date. One source maintains the rental rate will primarily be in $50’s, its rate escalating a bit annually from the high $40’s to low $50’s at the outset, the base rate unclear as to what level it begins. The length of the deal term could be as much as 10 years, sources convey, but that also has not been officially acknowledged, and there may be expansion rights for the rest of 253 Summer St. as space becomes available, one broker spoken to relays. The asset that Synergy acquired in December 2010 for $40.0 million totals 175,500 sf.

For decades a fringe Class B office market dominated by the cluster of former warehouses developed in the late 19th and early 20th centuries, Fort Point Channel and the larger Seaport District have rapidly emerged as one of the most dynamic neighborhoods in the country fueled by billions of dollars in private and public construction poured into the area this millennium. A perch on the edge of Fort Point Channel gives 253 Summer St. tenants unobstructed views across the waterway to South Station, that major transportation center a three-minute walk across the Summer Street bridge. In the opposite direction within a five-minute stroll is the Boston Convention & Exhibition Center.

“Everybody wants to be there,” says one CRE veteran, a notion already underscored in General Electric famously building its new world headquarters right next door to Amazon’s supposed destination. An Amazon lease would further validate that assessment.

David Greaney