Weekend Interview: Synergy's David Greaney On Why He Keeps Buying Downtown Office Buildings

This series goes deep with some of the most compelling figures in commercial real estate: the deal-makers, the game-changers, the city-shapers and the larger-than-life personalities who keep CRE interesting.

When David Greaney came to the U.S. in 1995 from Ireland, he was only supposed to stay for a year while he worked for Harvard Management Co. Twenty-nine years later, he is one of the largest commercial property owners in Boston. 

Over the last year, Greaney has thrust himself into the spotlight as one of the most active investors in office properties as nearly everyone else is running away from the sector. 

His firm, Synergy, in March paid $78M to acquire a 21-story downtown Boston office tower, the largest property to sell in the city since 2019. The deal came after Synergy bought two other downtown Boston office properties in March and September, as well as an apartment building with retail in January. 

The three office properties sold at substantial discounts to their prior sale prices. 

Greaney told Bisnow in an interview this month that he plans to keep those buildings offices, rather than pursuing conversions to residential or other uses, because he believes in the city's office market and expects a recovery. 

"If you're going to be buying these assets, you've really got to have conviction about the asset class, the market, and you've got to have conviction that you're buying at the right price," Greaney said.

He appears to be one of the only investors with such conviction. Those four deals represent the only buildings of more than 100K SF to sell in all of downtown Boston since interest rates began rising in 2022, the Boston Business Journal reported. They made Greaney the owner of the 11th-most property in the city, with the top 10 all being national or global investment firms, according to the BBJ. 

This isn't the first time Greaney has gone on a buying spree when properties were cheap. He was also one of the most active investors in Boston commercial real estate during the Great Recession. 

Greaney founded Synergy in 2003 and started doing deals with backing from Irish investors, although he said lately he has raised most of his money from U.S. institutions, family offices and foreign corporations. 

He has maintained strong ties with the Irish community, being part of several Irish American organizations and foundations. He is also known for throwing extravagant St. Patrick's Day parties at his pub, Bostonia Public House near Faneuil Hall. 

He spoke to Bisnow about how he emerged as such a big player in Boston's commercial real estate market, why he has been scooping up properties while others sit on the sidelines, and his plans for all of the buildings he has bought. 

This interview has been edited for length and clarity.

Bisnow: You came to Boston in the '90s. How did you get your start in Boston real estate, and how did you become more familiar with the city coming from Ireland?

Greaney: Second question first. When I finished my bachelor's degree in Dublin, I came over to Boston for what was supposed to be a year. I got a job at Harvard Management Co., which is part of Harvard that manages its endowment. I worked there for about just over a year, so I really liked the city. I decided to stay in the city, and I took the job at PricewaterhouseCoopers and stayed there for three-plus years. And then really had an interest in getting involved in business and real estate, and I met a small real estate owner and operator who was also from Ireland. In 2001, I joined him and helped him grow his business for a couple years and then set Synergy up in December of '03.

Bisnow: After getting the job with that other smaller Irish commercial real estate owner-developer, what did you learn working there? And why did you decide to venture off and start your own company after that?

Greaney: I was attracted to real estate in general because it's so tangible. There were constant challenges and problems that had to be solved, and you had to deal with lots of different people. I really enjoyed the business. When it came to breaking off by myself, I just had always had a sense that I wanted to run my own business. But I was certainly appreciative of the time I spent with the Mayo Group. It was just time for me to go. It was time for me to start my own thing, so that's what I did.

Bisnow: After the Great Financial Crisis, that's when you really started to amp up your real estate investments. During that time, what lessons did you learn that informed you about how to look at the market today?

Greaney: From '03 to '08, we've got a little bit of a portfolio, but you're right, post-GFC is when we really kind of ramped up and went on a bit of a buying spree, from 2010 right through to 2013 or '14. When people ask me about real estate, my quick answer is that real estate's not a complicated business. There's just lots of ways to mess it up.

We try to just keep things simple. We try to buy it at a good price, try to provide a good product, keep our buildings filled, keep our expenses under control. Control the controllable. Real estate value and demand metrics are impacted by so many things outside of our control, whether it's interest rates or it's inflation or it's employment numbers, whatever the case may be. We just tried to keep it simple and buy stuff that we think is well located, assets that we think that we can add value to, whether that's addressing deferred maintenance or improving the rent roll or running the building more efficiently. That's really what we do. It's not complicated. We stay close to our assets, pretty much everything we own is less than an hour from downtown Boston, and the majority of our assets are in downtown Boston, so that has worked for us.

Bisnow: Looking at the properties that you were able to buy in that time frame after the GFC, how have those projects changed, and how are they doing since you acquired them?

Greaney: I think in simple terms, we've been successful in the past at fixing broken buildings. When I say broken, that could be in terms of the capital stack, it could be in terms of the rent roll, it could be in terms of the physical condition of the building and the operational efficiencies. We just put our team together to address those various components.

If a building is entirely empty, clearly there's a leasing strategy that needs to be deployed. There needs to be capital invested. If it's a building that has fallen into disrepair, there's also some significant capital that's needed to reposition that asset. When Synergy takes a building out of this market, the brokerage and the business community know that we'll do a good job and that it will be a good product, and I think that helps overall with people's willingness to go in and lease the space. Again, provided that it's in a good location where it's close to transport and amenities.

We've got a good finger on the pulse as to what the business community wants, and by working with our broker partners and working with the business community and the great team that we have, we've been successful at keeping our buildings occupied. Clearly, the current market conditions have affected all the properties, from the very best properties in the market all the way down. It's tough out there right now. It's tough to attract tenants. But we're getting our disproportionate share. We're out there every day doing leases and getting deals done, and that gives us some more fortitude to get out there and acquire more assets and execute our business plan.

Bisnow: Do you feel confident that the same thing can happen now with the office buildings that you've been acquiring in the last nine months?

Greaney: We don't have a crystal ball, right? I think this crisis has disproportionately affected the office asset class because of the whole work-from-home concept, remote work, hybrid work. We think that the pendulum has swung too far. As I speak to the 600 employers that are inside our portfolio, there's an overwhelming desire to have people be in office for purposes of knowledge transfer, efficiency, productivity, training, retention and culture.

I'm pretty confident that — while I think it will never go back to five days a week for everybody, similar to what it was pre-pandemic, because there's certain jobs and certain tasks that can't be performed remotely — the vast majority of positions and the vast majority of tasks would need to be done in a collaborative physical environment. We believe in that long-term. It could take some time for that to shake out, but what I hear from employers and even employees now is that there is a desire to be present and to be in the office. We think that equilibrium will be found and the new norm will exist, but office isn't going anywhere. Commercial offices and the need for physical workplaces are not in any significant jeopardy, from our perspective.

Bisnow: I also wanted to touch on your Irish roots. I've talked to people and they all mentioned things like your famous St. Paddy's Day party at the Bostonia Public House or the strong ties back home. How have your Irish roots influenced your real estate and business decisions here in Boston?

Greaney: What's important to our business is information and relationships, right? From our perspective, information and relationships drive value. We're very focused on getting that information in terms of who's in the market, what deals are getting done. Just information and data, and it's becoming even more important day by day. The other big part of it is relationships. And I think as a young guy coming from Ireland to Boston, which is obviously a city that has very strong ties back to Ireland and has a significant amount of Irish American folks living and working in the city, I was fortunate.

I had a lot of great mentors and a lot of folks who were willing to open doors and take me in. Some of it was just purely because I was from Ireland. So that certainly worked to my advantage, but I'm not sure that I would have gotten the kind of access and support in another city as much as I got here in Boston. I think that's probably the biggest, biggest benefit of being a young Irish guy coming over here, starting a life and creating a business. It's just really the support of the Irish American community.

Bisnow: I've heard some of your investors come from Ireland. I'm curious, how much capital do you raise from there? And what general sentiment do people back in Ireland have to buying office buildings here in the States?

Greaney: I think in the early part of our career and our business, some of my relationships were still deepest back in Ireland. So for the first period of our acquisitions, we had a lot of money coming from Ireland, but from GFC on, for the last 15 years or so, our equity is predominantly the U.S. institutional, foreign corporate, family offices. So Irish equity is not really featured in the last 15 years but certainly was a big factor in the beginning. We do still have some Irish investors, but certainly nowhere close to what we had when we started in '03 to '04.

Bisnow: I think my first introduction to you was back in 2022 at our Boston State of the Office Market event. You talked a lot about Class-B office space and how bullish you were. What gave you the confidence at a time when everyone else was running away from the office sector?

Greaney: Bullish is probably too strong a word, but we certainly have conviction. We have conviction about the asset class. When I talk about office, I'm talking about all asset classes, although predominantly we've been in the Class-B sector. We have Class-A assets as well, downtown, suburban assets. But let's just talk about offices as a whole.

We really slowed down on acquisition of office in 2017 and 2018. We really found pricing had gotten high, and we didn't transact downtown office or later downtown office deals with the exception of one deal in the Seaport, a Class-A building that we bought with KKR. We didn't buy anything else downtown for six years, until we bought One Liberty Square back in September. We showed some good discipline in that period of time from 2018 to 2023.

From our perspective, if you've got to buy office, which is a capital-intensive asset, you need to have it on the right basis. We really saw pricing fall off a cliff there in mid-2023, and then we started to say, "OK, now things are starting to pencil out and other things are starting to make sense." Since the middle of '23 and in the last 12 months or so, we've been quite active.

We've been active because one, we have conviction in the space. We believe in office. Two, we believe in Boston as a market, and three, we really liked the price. Without all three of those components, you wouldn't see us being the most active buyer in the market, because it's difficult right now. It's very difficult to get out and underwrite these deals. Capital formation is difficult, debt specifically is difficult. If you're going to be buying these assets, you've really got to have conviction about the asset class, the market, and you've got to have conviction that you're buying at the right price.

Bisnow: You've acquired several big office buildings: 101 Arch St., 179 Lincoln St., One Liberty Square. Why did you move forward with these deals? What attracted you to these assets?

Greaney: I think first and foremost, the physical asset is fantastic. They're all assets that are very well maintained by institutional ownership and all have great location in terms of being right in downtown Boston, right in the path of progress, close to transportation, close to amenities. We like the price. We believe that we bought the last four assets that we acquired in the last nine months at a good price. I guess time will tell if there is a good price, but through our underwriting and where we see the world going over the next three to five years, we felt that the pricing was good and it was time to buy these assets.

Bisnow: How competitive were these acquisitions? Were you bidding against multiple investors?

Greaney: I mean, people always ask you, how did you amass this portfolio? How did you end up winning that process? How do you end up getting those bids? Generally, it's because we pay the most money. That's how it goes.

I mean, obviously having a great reputation as being a good buyer who knows what they're doing and who puts an educated bid in and does their due diligence and doesn't mess people around, people would like to transact with us. But generally, you've got to pay the most money if you want to buy, right? There's plenty of qualified buyers out there. It's not a case where you get to steal buildings. Boston is still a competitive market, even in difficult times. You have to be prepared to step up as a qualified buyer, and they gave what the market demands.

Bisnow: How many other people are going after these deals like you are right now in the market?

Greaney: The pool is growing. It's difficult to actually close these deals. And capital formation is difficult. Equity is on the sidelines, debt is on the sidelines. Investment committees are trying to shed their office, not add to them. People are dealing with problems, and it's kind of hard to say, "Hey, you want to buy an office building?" when you're still trying to fix the problems of the office buildings you bought over the last five, six years. It's a point in time where the buyer pool is thinner than usual. But every day, it's getting busier and more and more people are looking. It's going to get more competitive.

Bisnow: Are you planning on keeping these properties as office buildings? What are the plans for these buildings?

Greaney: We bought three office buildings: One Liberty Square, 179 Lincoln and 101 Arch. They will all stay office. We believe in the asset class. One India was a mixed-use building, which was apartments and restaurants. That's going to continue to be residential and restaurants.

We are certainly open to looking at assets from an office-residential conversion. In fact, I think it's great policy. If you have an empty office building and you can make the numbers work, getting more residents in downtown Boston is a great policy. It supports businesses and supports retail. It's more of a 24/7 environment. However, it's challenging. I've looked at it a number of times, and I know the city has been working hard in trying to find the solution, but from the deals we've looked at, we haven't been able to find a deal yet that will pencil.

Bisnow: Are there any examples of successful projects or deals that you look at as inspiration as you're moving through and looking for deals?

Greaney: You've just got to be careful. It's a very tricky, risky time out there right now. I'm an auditor or CPA by training. I certainly have a healthy appreciation for risk. While it might appear that we're super aggressive and we're out there buying stuff when other people are not, we do it with due diligence and a lot of digging. We've said no a lot of times, and a lot of deals we pass on.

Not every office deal you buy today is going to work out. You really need to make sure that you have the right team and you have the right capital structure in order to be successful. Because office assets are extremely capital-intensive. They require a lot of work, and you need able to secure tenants. It's extremely competitive out there right now. There's questions about the fundamentals, if office is really ever going to come back. Interest rates are at 20-year highs, construction costs have gone through the roof. This is a really tricky time to be in this space and a very risky business. We tread with caution. When we're ready to make a move, we'll make it and we'll go after it, but that's only after we've done a significant amount of underwriting and due diligence and are confident that we can get the asset and execute the business plan. It's as tough as I've seen in my career.

But we do have conviction. We have conviction over the medium term and the long term, but we think in the short term it is fraught with risks. We hope to get paid for tabling the risks, but they're measured risks, calculated risks. Not all office buildings are the same, not all tenant profiles are the same, not all locations are the same. You have to be very thoughtful about it, and we care and we invest a lot of our own money, but we represent over a billion dollars of other people's money. We take that responsibility very seriously, and we would not deploy capital in a risky market in a risky act without doing the due diligence. We're going to be in a position where we make the money, not lose it.

Bisnow: Let's talk about what you're doing in Worcester for a minute. You opened an event space recently at 446 Main St., and you acquired that building 2019 or 2020.

Greaney: We bought it in the fall of 2019, and it was empty. We had a business plan that was delayed for a couple of years because of the pandemic. But we're well on our way here where we've got some great leases signed up and we've got our leases that have been currently negotiated. We've got a brand-new event space on the top floor, and we put a daycare on the fourth floor, and it's open and doing really well. We've signed up a new restaurant on the ground floor. I was very happy with the building and very happy with our investment in Worcester. It's all starting to come together now, albeit a couple years later than we would have liked it to because of the pandemic, but I really enjoy Worcester and I really enjoy having our assets out there. It's good community. It's good business community, good people to do business with. Then we also have the office-to-resi conversion at One and Two Chestnut, which we're hoping to get started next year. Just working on putting that capital stack together. I like the assets. We're happy to be in Worcester.

Bisnow: I know you are in talks to recieve state funding. Where does that stand?

Greaney: We actually haven't had the award yet. We did get city [tax increment financing], which helps with real estate taxes for 30 years, 15 years, and we have applied for a [Housing Development Incentive Program], which is for gateway cities' modular housing. We have not heard back if you should get that or not. We're hopeful and confident that we will, but that award has not been made yet.

Bisnow: How is Worcester's office market different from Boston? Do you have the same conviction in this market as in Boston?

Greaney: It's the second-largest city in New England after Boston. I think that the assets that we have are right downtown, they're close to the restaurants. We've got associated parking right there. You've got the [Triple-A Worcester Red Sox] ballpark, you've got Hanover theater, you've got the DCU Center right there. You've got 11 schools in the neighborhood. So the things that drive us in the path of progress and wisdom, and Worcester is certainly the path of progress, growth there over the years, in terms of the schools, the employers, extra housing units, the ballclub. The fundamentals are the same. I think, buy good assets in great locations and then just work hard to keep them.

Bisnow: Are you still looking for new properties to grab up now? What types of deals are you attracted to?

Greaney: We can't get too specific, but I think that we have a business plan. If you look at what we've bought over the last year, that can be indicative of the type of stuff that we'd like to buy going forward. We're going to stick to our knitting. I think we're really good owner-operators of Greater Boston-located assets, to the extent that we can find good assets in good locations at the right prices, then we're going to be very interested.

Bisnow: What's your bold prediction for this year or the rest of this year?

Greaney [speaking before the NBA Finals started]: I think Celtics in seven, and I think that I'm done having kids. I had a seventh child, so I'm definitely done having kids. So there's my bold predictions. No more kids for the Greaney family.

Bisnow: What is your weekend routine or your favorite weekend activity?

Greaney: On the sidelines, support my kids. A lot of kids, a lot of sports. So that's pretty much my weekend. My kids play soccer, basketball, football, lacrosse, gymnastics. I like sports overall, I'm a big sports fan, so it's great to see the kids having fun and competing.