When fast-growing, Boston-based private-equity firm HarbourVest was evaluating its real estate needs as its master lease at the city’s One Financial Center tower was set to expire in June 2025, it decided it wanted to house its Boston-based employees, including those handling back-office functions, under one roof.
After it had hired new employees during the pandemic without many of them ever setting foot in the office or interacting with their colleagues in person, HarbourVest determined its culture was at risk and an office could play a key part in helping to reignite that. It tapped Newmark, which the firm first retained in 2018 and had helped HarbourVest expand its footprint to 129,000 square feet from 105,000 square feet at One Financial Center, to come up with recommendations.
The brokerage firm came up with an initial shortlist of six alternatives before the list was narrowed to four that included new development, redevelopment and existing building options. HarbourVest in the end decided to relocate to 1 Lincoln St. and signed a 16-year, 256,000-square-foot lease across 11 floors that doubled its existing footprint. The deal also involved HarbourVest replacing State Street Corp., which itself is relocating to the city’s new One Congress office tower under construction, as 1 Lincoln’s namesake.
Newmark also helped to arrange for building landlord Fortis Property Group to take back two of 1 Lincoln’s top floors from an existing tenant to include in HarbourVest’s deal.
The landlord has a contractual obligation to invest over $50 million into the building's lobby, amenities and infrastructure. Amenities to be added at the building will include a gym, artisanal food market, beer garden, whiskey bar and an expansive roof deck.
Thanks to the lease, Fortis has landed a $1 billion refinancing of the project. As Boston’s office vacancy rate has topped what CoStar data shows as at least a five-year high of over 10%, the lease stood out as one of the largest signed during the pandemic and won a 2023 CoStar Impact Award for best lease of the year in Boston, as judged by real estate professionals familiar with the market.
About the Project: HarbourVest had over 650 employees in Boston and over 1,000 employees in 12 global offices as of September. The firm will be the anchor tenant at 1 Lincoln, which is two blocks from Boston’s busiest transit hub, South Station. The building also houses other tenants, including WeWork and Warren Buffet’s Berkshire Hathaway Specialty Insurance. The top of the building will feature HarbourVest’s name prominently, replacing State Street. HarbourVest is expected to move into the building in 2025.
What the judges said: “Newmark had to get creative to circumvent the hurdles that popped up during this transaction and deserved to be recognized for that,” said Drew Kirkland, senior associate of Northeast Private Client Group.
They made it happen: David Martel and Gilbert Dailey, Newmark executive managing directors, brokered the lease.