Kendall Capital Acquires 38K SF Boston Office Building at a 74% Discount

Acting through 33 West LLC, Kendall Capital has purchased a Class-B office building at 33-41 West St. for $4.1 million from Bay Management Corp., a Dedham firm, according to public records. This acquisition represented a substantial 74% discount from the $16 million price that Bay Management paid for the property in 2016, as initially reported by Banker & Tradesman.

The company’s point of view: Mai Luo, the President at Kendall Capital, informed the press that the property had been listed on the auction site Ten-X. She acknowledged that although the price was lower than anticipated, it could be a reflection of the current market reality as more transactions occur.

Luo commented, “It’s reasonable because if we look back and say, ‘Oh, my gosh, it’s 75% off,’ people often forget the value goes up and down, and maybe this is the new normal.”

The building’s occupancy: Currently, the 8-story office building is 50% occupied, with tenants such as Escape the Room Boston, Musicians Playground, and MassVOTE. Bay Management had acquired the property in 2016 for $16 million, more than doubling the $7.2 million price paid by the previous owner in 2008. It features 38 K square feet.

The market has seen some trouble: In the past year, finding similar sale prices in the market has been challenging due to rising interest rates and uncertainty surrounding the office sector, which has resulted in a slowdown in the capital markets. In late August, JLL reported brokering the first downtown Boston office sale since early 2022.

Despite the current market's unpredictability, Luo mentioned that Kendall Capital is actively seeking other opportunities within Greater Boston's office market, explaining that “although it is challenging right now and probably for years, I’m optimistic about the long-term future”.