Davis Companies has shied away from buying office buildings for nearly a decade. Not anymore.
First came an equity investment in a midtown Manhattan office building in October. Now, Davis has bought three office buildings and a parking lot in Boston, the developer’s hometown.
Davis completed the purchase of four properties on Farnsworth and Congress streets in Fort Point last week for $56 million from TIAA subsidiary Nuveen. Davis says 94 percent of the portfolio’s 150,000 square feet of office and ground-floor retail space is leased. (The largest tenant is JSI Research & Training, at 44 Farnsworth.)
Davis sees two factors that make it an attractive time to dive back into the office market: rising leasing activity, and office building values that are still relatively low following the pandemic-prompted shift to remote work.
The last time Davis bought an office building in Boston was in 2017, when it purchased 88 Black Falcon on the waterfront — though that was seen as a redevelopment play.
President Stephen Davis said his firm focused on investing in other types of commercial real estate starting around 2015, such as hotels, labs, and apartments. (More recently, Davis inked a big deal to redevelop an oil tank farm in Everett.)
But lately, the firm has been on the hunt for office deals, in three strong local markets in particular: Fort Point, Back Bay, and Kendall Square. Davis said he’s excited to get back to the firm’s roots as an office investor.
“We are starting to really see material improvements in the office business,” Davis said. “There’s adequate momentum and stability in the market here.”
This is an installment of our weekly Bold Types column about the movers and shakers on Boston’s business scene.
Jon Chesto can be reached at jon.chesto@globe.com. Follow him @jonchesto.