Boston ad agency DigitasLBi is departing its longtime home at 33 Arch St. in downtown Boston to become the anchor office tenant at Congress Square, a block of century-old financial offices that developer Related Beal is converting into a mixed-use development.
Digitas recently leased 200,000 square feet at Congress Square’s 40 Water St., the former original branch of Shawmut National Bank. It’s been shopping for office space for more than two years, with its 200,000-square-foot lease at 33 Arch St. set to expire in 2017. Related Beal is renovating 40 Water St. to make way for open-format offices topped with a 6-story glass addition and tree-lined roof deck overlooking Post Office Square.
TIAA-CREF, the owner of 33 Arch St., recently placed Digitas’ space there on the market, according to a real estate source. Digitas was a pioneer at that location as well, signing the first office lease when the 33-story tower was completed in 2004.
The lengthy lease negotiation prompted another 33 Arch St. another tenant, IT specialists TEKsystems, to look elsewhere for expansion. TEKsystems recently leased 15,000 square feet at Tishman Speyer’s One Federal St.
“It shows how interconnected tenants and decisions are within the market,” said Aaron Jodka, director of research for Colliers International in Boston. “While Digitas was going back and forth, TEKsystems had to make a decision and couldn’t want for someone else to make up their mind, so it forced them to relocate.”
A Digitas spokeswoman did not respond to a request for comment. JLL, the office leasing agent for Congress Square, declined to comment.
The Congress Square offices also will include space for SapientNitro, which, like Digitas, is owned by Publicis Groupe, the Boston Business Journal reported in June. SapientNitro’s offices are located at 131 Dartmouth St. in Back Bay.
Digitas’ lease is the largest in downtown Boston since Putnam Investments’ committed to 250,000 square feet at 100 Federal St. in January, in a planned 2018 relocation from its 240,000-square-foot headquarters at One Post Office Square.
Congress Square is a 458,300-square-foot mixed-use project approved in 2015 by the Boston Redevelopment Authority. Five buildings are being converted into offices, a 190-room hotel, luxury housing and ground-floor shops and restaurants.
40 Water St. will include a rooftop addition increasing the floor area from 315,500 to 388,000 square feet. The remainder of the project includes a 190-room hotel, upper-floor residential units and ground-floor retail and restaurant space.
Related Beal acquired the portfolio in 2013 for $87 million, and Fidelity Investments vacated the buildings last year.
Rather than try to find tenants to fill the conventional office space, Related Beal hired Boston-based architects Arrowstreet to design a mixed-use redevelopment.
From the outset, the strategy was to attract creative economy tenants, Arrowstreet Principal Scott Pollack told Banker & Tradesman last year. A new elevator core will be built in a former light well, enabling the existing floor plates to be redesigned with open formats and expansive sightlines.
Related Beal sold the 13-15 and 19 Congress St. buildings in August to Everett-based Thibeault Development for $14.55 million.
