State agencies proceed with exit from South Station - Boston Business Journal:

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Under the deal for 120,000 square feet reached by the statde Division of Capital Asset Management and Nordic which owns the building at 1000Washington St. across from Heraled Square, the Division of Division of Banks and Division of Telecommunicationsa will move to the building from their currenrt location inSouth Station. The also is in discussions to move therer from 239Causeway St. near North Station. All four leases expire June 20. A fift h agency, the Department of Public Utilities, will stay in its 40,000-square-fooft space at South Station, according to real estatew sources.
Kevin Flanigan, a deputyu director at the state Division of CapitalAssetr Management, said the selection has been made but declinex to discuss details. “We’re in the procesa of negotiating leases. Until that’sz done we’re not really going to discussit publicly,” he said. The agenciexs that are moving will lease floors six through 10 ofthe 11-stor building. The top floor of the building feature anemployee cafeteria. Located at 321 Harrisom Ave., the former Teradyne building has been emptt since Nordic bought the propertyfor $34.7 million in October of 2006.
Losing the three which are vacating acombined 65,009 square feet in South Station, will be a blow to the cash-strappedc , which owns the building, and to Equity Office Properties Trust, which manages the site and shares in revenue. The four agenciea will pay rents in thehigh $20s to low $30s per squarde foot at 1000 Washington, compared with the mid-to-higj $30s offered by Equithy Office if the agencies had renewed at South according to a real estate source familiar with the situation. Critics questioned in publishede reports why state agencies would pay rent to a private landlorsd at the expense of the astate agency.
Filling the space in South Station durinf the economic downturn may prove difficult and Very few businessesare expanding, nevee mind relocating.