During a recent earnings call, BXP President Douglas Linde stated that the projected construction costs for the new office tower significantly exceed the potential rental incomes, leading to a hiatus in construction plans. With current costs per square foot estimated between $1,400 and $1,600, achieving a sustainable financial return seems unfeasible under the current market conditions, as higher rents would be necessary but are not aligned with market realities.
Linde emphasized that any financial viability for the 171 Dartmouth St. project hinges upon achieving rents that are 'materially higher' than those obtainable in existing properties within the area. Despite having city approval for the 27-story office building, the combination of high construction costs and challenging rental expectations underscores the project’s uncertain future.
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