Shorenstein Planning $20M+ Renovation of Center Plaza

BOSTON—Shorenstein Properties, LLC is hoping to start by year's-end on a $20-million to $25-million renovation, upgrade and repositioning of the Center Plaza office complex in Downtown Boston.

The 717,128-square-foot office property is currently 82% leased. The renovation program is being undertaken in anticipation of its major tenant—the FBI—relocating operations to a new building in Chelsea by 2017. The agency is the complex's largest tenant leasing 160,000 square feet in One Center Plaza.

Kevin Kuzemchak, senior vice president of asset management of Shorenstein Properties, tells Globest.com that the firm intends to begin the capital improvement project at the property by the end of this year.

“The plan is a rather comprehensive renovation and repositioning,” he says. In light of the fact that the building is 40 years old, he says it was time to make a significant investment. Among the planned improvements will focus on the Center Plaza's six lobbies (three on the Cambridge Street side of the complex and three ore on the Pemberton Square side).

“We are going to make improvements to them (lobbies) and give them more a sense of place,” Kuzemchak says. “How we are going to do that is by bringing up the glass lines of the lobby so that they are much more noticeable from the street.”

Center Plaza is a mixed-use complex totaling 717,128 square feet in downtown Boston. Built between 1965 and 1969, the property is comprised of three interconnected buildings—One, Two, and Three Center Plaza—that are arranged in a crescent shape along Cambridge Street between Somerset and Beacon streets across from Boston City Hall and adjacent to the Government Center MBTA station.

Another significant component of the renovation at Center Plaza will be improvements to the 900-foot long retail arcade that currently suffers from poor lighting and no landscaping. “We are going to make some really big improvements to the retail arcade by adding significant landscaping, new lighting and kind of a new street scape so it becomes much more attractive," he says. The capital program will basically improve all significant aspects of the building, including rooftop upgrades, Kuzemchak adds. The renovation of the building is to be completed about the time that the FBI is scheduled to vacate the property in 2017.

Kuzemchak says that a leasing campaign will be waged during the renovation with the goal of landing a new tenant or tenants that will fill the agency's space upon its exit from the building. He says that building's prime downtown location, combined with the completion of the building upgrades, will help make the building more competitive and attract some businesses in the city's high-growth sectors such as the high-tech and creative industries. Currently, in addition to the FBI, a majority of the complex's tenants are state and city government agencies and local and regional law firms.

Shorenstein acquired the building in 2013 for $307 million from Blackstone. Earlier this month Shorenstein signed a lease with the Institute of Applied Network Security, a leading provider of in-depth security insights and decision support, for 9,602 square feet at Center Plaza. IANS will be relocating to its new Center Plaza space from 15 Court Square in Boston.

While he would not identify the tenants, Kuzemchak says that the company is in negotiations with a number of prospective tenants at Center Plaza, including a “fitness concept” that could lease 18,000 square feet of space on the street level of the building and a number of office prospects, whose requirements range in size from 10,000 to more than 55,000 square feet.