Massachusetts Hands Out $15.3M to Turn Empty Offices Into 856 Apartments

Massachusetts officials handed out $15.3 million this week to help five developers convert underused commercial buildings, including a shuttered Westford hotel and a 1903 Boston office tower, into a combined 856 apartments. Lt. Gov. Kim Driscoll announced the awards in person at 219 Littleton Road in Westford, the site of the single largest project in the round by unit count.

The funding comes through the state's Commercial Conversion Tax Credit Initiative, which finances the transformation of commercial properties into residential ones, according to Bisnow. Massachusetts Gov. Maura Healey said the awards will “put underused properties back to work, create 856 new apartments and help bring more residents, customers and energy to downtowns and commercial districts across the state,” per the same outlet. The five projects span Boston, Dedham, Springfield, Westford and Worcester, and developers there have struggled for years to line up financing for office-to-residential conversions without public subsidy.

Westford's Former Hotel Becomes the Round's Biggest Project

Redgate received $3 million toward its 300-unit conversion of the former Westford Regency Inn & Conference Center at 219 Littleton Road, the largest project in the round by unit count. The developer is redeveloping the site under Westford's MBTA Communities Multi-Family Overlay District, zoning the town created to comply with state housing mandates, and plans to preserve the property's historic 18th-century Drew House as a community amenity space, according to WestfordCAT. Statewide figures reported by CommonWealth Beacon put 270 of Westford's 300 apartments at market rate.

Boston's Old South Building Anchors a Downtown Conversion Wave

In downtown Boston, Synergy received $4 million toward a 255-unit conversion at 294 Washington Street, per Bisnow's reporting, with CommonWealth Beacon's figures counting 204 of those units as market rate. The building is an 11-story, 230,000-square-foot Class-B office tower built in 1903 as the Old South Building and sits adjacent to the historic Old South Meeting House, according to Multi-Housing News. City assessing records reviewed by Universal Hub show the property's assessed value dropped from $82.2 million in 2023 to $52.8 million this year, a decline illustrating the broader collapse in commercial office valuations pushing landlords toward residential conversions.

Boston's own Office-to-Residential Conversion Program complements the state credits with a 75 percent property tax abatement for 29 years, a mechanism that has drawn 21 applications and 1,264 proposed housing units across 26 buildings since it launched in late 2023, Banker & Tradesman reported. Bisnow's figures show developers have proposed 29 conversions in Boston since the program began, with eight projects already under construction and other city-approved projects totaling more than 1,100 units yet to break ground.

Suburban and Gateway City Projects Round Out the Awards

Nordblom Co. received $3 million for its Dedham project near Legacy Place, which will demolish two obsolete commercial buildings at 110 Stergis Way on a 3.8-acre site to build 154 rental apartments. The development, formally named Vantage, is expected to deliver in spring 2028 and will offer direct pedestrian access to Whole Foods and the surrounding 600,000-square-foot retail center, according to Nordblom Company.

McCaffery Interests received $3 million for converting four historic buildings in downtown Springfield into 99 apartments, a project Hoodline previously reported is part of a $68 million redevelopment including 113-115 State St. In Worcester, the Menkiti Group received $2.3 million to convert the historic Clark Block building at 401-405 Main Street, which housed Shack's Clothes for nearly 50 years, into 48 apartments as part of a $27 million project, the Worcester Business Journal reported. Five of those Worcester units will be set aside for households earning up to 60% of area median income.

A Second Round Builds on February's Initial Awards

This is the second round of Commercial Conversion Tax Credit awards under the Affordable Homes Act, the $5.16 billion law Healey signed in 2024 to address the state's housing shortage, which the Executive Office of Housing and Livable Communities administers. The Healey administration's first round, awarded in February and covered by Hoodline at the time, provided nearly $8.4 million to support 339 homes across five sites in Boston, Fitchburg, New Bedford, Pittsfield and Worcester.

Taken together, the two rounds reflect a deliberate state strategy: use tax credits as bridge capital that lets developers close financing gaps during a period of high interest rates and depressed office values. Boston developers in particular have struggled with financing office-to-residential conversion projects, per Bisnow, and government funding has proven necessary to move many of these conversions forward at all. Whether that funding ultimately delivers affordability at scale in suburban and Gateway City markets, rather than just market-rate supply, remains an open question as these five projects move from paper to construction.