BXP Delays Launch of Back Bay Office Project Indefinitely

BXP does not expect to move forward with construction on its proposed 171 Dartmouth St. in Boston’s Back Bay over the next year, president Douglas Linde said on an earnings call Wednesday. Linde cited construction costs relative to current rent levels.

His comments came in response to a question on whether Bain Capital, which recently expanded its lease at BXP’s 200 Clarendon St., had considered becoming an anchor at the 27-story, 660,000-square-foot 171 Dartmouth. “A new building construction in Boston today probably costs somewhere in the neighborhood of $1,400 to $1,600 a square foot, depending on whether or not you want to include a value for land,” said Linde.

He added that this would entail charging a rent “materially higher than the rents that are achievable in existing both under-construction and recently delivered new buildings in the Financial District and the level of rents that we can currently command in the Back Bay. And so, I think the timing for that new development in Boston doesn’t really pencil relative to where existing rents are.”

The Boston Business Journal reported that the REIT has approvals to build the office tower adjacent to the MBTA Bay Bay Station, as part of a larger air-rights project that also includes one of Boston’s biggest approved-but-unbuilt residential developments.