Months after losing its sole occupant, a Boston office building is getting a new lease on life after it was purchased by a European investment firm with a global portfolio of high-end hotels.
JAJ Investment Group, a Luxembourg-based firm that serves as the family office of French financial executive Jacques Chahine, paid a discounted price of $30 million to acquire the vacant building along the city's waterfront at 400 Atlantic Ave., a spokesperson confirmed. The deal with the seller, an affiliate of global investment bank UBS Group, closed earlier this month and kicks off what could be a complete overhaul of the building.
While the ultimate use is still uncertain, JAJ Head of U.S. Investment Agathe Chahine said the firm's transformation plan for the late 1800s-era property is "not going to be average."
“We’re going to do something stunning,” Chahine said in a statement. “The location is amazing, [and] we have to do something that’s as nice as the location.”
The deal is another sign of the widespread valuation reset that has been playing out across many of the nation's largest office markets, attracting a cohort of smaller, privately held investors more willing to make a risky bet while pricing resettles.
In Boston, one of many cities struggling to find its post-pandemic footing, sales volume has downshifted significantly over the past year as a result of fewer transactions and lower price tags. Investors collectively spent about $2.9 billion last year, according to CoStar data, roughly 80% below the record peak reported in 2021 and the lowest amount reported since 2010.
Door to opportunity
The sale adds a bit more stability to the nearly 100,000-square-foot building after months of turbulence.
After decades of leasing the entirety of the property, Goulston & Storrs — one of Boston's largest law firms — earlier this year ditched its longtime Atlantic Avenue home to relocate to the Morgan Stanley-owned skyscraper at One Post Office Square. What's more, the $25 million mortgage for the property matured last month, classifying it as a nonperforming loan and putting the property in danger of foreclosure.
Months of marketing and several failed deals later, JAJ is preparing to put its touch on the soon-to-be-overhauled property — even if it isn't likely it will remain an office building.
The firm is "exploring a couple of options, [but] it’s unlikely that we do an office building," Chahine said. "At some point we’ll look at it, but I don’t think that’s the right way to go.”
Credit Suisse, which UBS acquired last year, paid $50 million for the Atlantic Avenue property in 2014, according to CoStar data. A representative for UBS did not immediately respond to CoStar News' requests for comment.
JAJ's no-debt acquisition marks the European firm's debut in the Boston commercial real estate market, adding to a global portfolio of office and hotel properties as well as holdings in the private equity and financial markets. The firm has a stake in the development of the 147-room Thompson Hotel that is nearing completion in Miami Beach.
It also owns the luxury Palácio Ludovice hotel in Lisbon, Portugal, a 300-year-old palace that was converted into a boutique tourist destination, as well as an apartment-hotel property in Paris that was previously an office building.