More Office-to-Hotel Conversions Planned for Downtown Boston

Amid the ongoing struggles of the Boston commercial real estate market, developers have been proposing ideas to reimagine vacant office buildings for residential and hospitality use.

On Tuesday, Feb. 10, the Boston Globe reported that a developer backed by the family office of a French financier recently suggested converting a six-story office on Boston's waterfront into an upscale boutique hotel. This move is the latest in a series of similar proposals to revitalize vacant downtown spaces.

Hospitality industry experts point to hotels as attractive investments due to pricing flexibility, strong exit markets, and robust demand. Major events such as the FIFA World Cup-related activity, Tall Ships, and the U.S. 250th anniversary celebrations this summer underscore the demand for lodging in the city.

According to the Globe, of the top 25 hotel markets in the country, Greater Boston last year secured the third-highest daily room rates and revenue per available room. In contrast, the office market has struggled to recover post-pandemic. Vacancy rates in Boston are the highest they've been in a quarter-century.

“The Boston market has consistently been one of the top markets in the country, both before and after the pandemic,” said Sebastian J. Colella, managing principal of hospitality consulting firm Pinnacle Advisory Group in Boston. “With those dynamics ... I could see that prompting the owner of an office building reconsidering the highest and best use,” he stated to the Globe. 

JAJ Investment Group is one of several firms leading the way to convert the six-story former Goulston & Storrs building at 400 Atlantic Ave. into a 113-room upscale boutique hotel. When completed late next year, it will feature a harbor-facing deck and a 7,000-square-foot restaurant. The project's developers aim to connect the Harbor and the adjacent Greenway to “reverse the building's historically private nature,” they said in city filings.

Other redevelopment efforts include converting 110 Canal St. near North Station into an 82-room hotel. In the Hamilton Place area, at 7-9 Hamilton Place, developers have secured a $25 million building permit to construct an approved 12-story hotel near the Park Street T station. This project is expected to include a rooftop deck overlooking Boston Common.