BXP pays $30M for a Waltham rezoning option

BXP has spent $30 million on two Waltham office buildings whose acquisition reads as an option on the zoning now around them. Banker & Tradesman, working from county deed records, reports the Boston REIT bought 860 and 870 Winter St. in the Bay Colony office park west of Boston from an affiliate of the Massachusetts Medical Society; the seller was based at 860 Winter St., and 870 had previously housed Raytheon. BXP already holds 16 properties in Waltham and nearly 4 million square feet of suburban Boston offices.

Waltham's city council has approved multifamily rezoning in the area as Massachusetts pushes to turn underused offices into apartments, and BXP has already shown its comfort with that trade on office-park land: last year the company broke ground on a 312-unit apartment complex in a Lexington office park. The Winter Street reporting does not state a conversion plan, so the acquisition is best treated as the purchase of a choice. For $30 million, BXP has two buildings in a submarket whose zoning was just rewritten for a different use; whether the company converts them is a separate decision the deed leaves open.

That choice is scarce in today's office market. Commodity buildings clear when their next legal use sets the price; buildings without one wait on the rent roll. Waltham has handed these buildings a next legal use, and BXP's 16-property position in the same town makes the acquisition more strategy than experiment. The deal also changes the bidder set: with apartments now permissible, residential developers can underwrite these offices as land, and the $30 million price gives that parallel market a comparable.

What remains untested is intent. The reporting does not show BXP filing for multifamily permits on the Winter Street site or otherwise committing to conversion. If and when that filing arrives, it will show whether the $30 million was for the buildings or for the zoning change around them. Until then, the next document out of Waltham is the thing to watch.