The still-empty 40 Thorndike mixed-use building in East Cambridge has been sold for $1 and responsibility for developer Leggat McCall’s remaining mortgage debt of nearly $232 million, Banker & Tradesman reported Friday.
The 20-story, 475,000-square-foot building opened its doors Oct. 8, 2024, and filled the 48 affordable residential units at its base – but never the 420,000 square feet of office and retail space.
Bank OZK, which backed Leggat McCall’s construction with a loan of $300 million in 2021, according to Banker & Tradesman, mentioned in a filing late last year that there were lease negotiations for one-third of the building’s office space. But no announcement has developed, and bank chief executive George Gleeson said in January – while writing off $72 million – that there would be no further investment without one.
Six months later, Brookfield Properties of New York is the owner of 40 Thorndike, according to a Middlesex County deed from July 2 cited by B&T.
The original building, constructed in 1974, was the towering Edward J. Sullivan Courthouse and jail. Designed in the brutalist style, the courthouse was described as “menacing” and “dilapidated” and eventually discovered to be moldy and riddled with asbestos, making renovation costs unappealing to the state. Its Middlesex Superior Court moved to Woburn in 2008; Cambridge District Court moved to Medford in February 2009; and prisoners in the jail at the top of the building moved to the Middlesex House of Corrections in Billerica in June 2014.
Leggat McCall Properties acquired the property for redevelopment in 2012 but faced headwinds from a community movement that wanted the property to be affordable housing instead of an office tower. The company ultimately did not begin construction until 2020.
Architecturally, Leggat sought to give the building a more inviting look and feel, but that didn’t change the bad timing: A combination of changing work trends and an economic downturn has slowed office and lab markets. By recent estimates, there’s between 14 million and 16 million square feet of lab space available in Greater Boston, and office space has become “a four-letter word,” one local development authority said.
East Cambridge has been hard-hit, Banker & Tradesman said, citing a report that there’s a 23.8 percent vacancy rate at midyear amid asking prices that remain a sky-high $80.18 per square foot.
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