JLL Arranges $44M Construction Loan for Office-to-Residential Conversion at 31 Milk Street in Boston
JLL Capital Markets has arranged $44 million in senior construction financing for The Residences at 31 Milk, an adaptive reuse project that will convert a 1921-vintage, 11-story office building in Boston's Financial District into 110 rental apartments, the firm announced Sept. 29, 2026.
JLL represented the borrowers, Dinosaur Capital Partners and Mugar Enterprises, Inc., in securing the three-year loan. An affiliate of The Davis Companies, acting as the first deal in its integrated credit platform, and S. USA Insurance Company co-originated the $44 million financing. The capital stack also includes federal and state historic tax credit financing and subordinate financing from MassHousing.
Deal Structure and Financing
The senior construction loan is structured with a three-year term. Beyond the senior debt, the project draws on multiple public and private capital sources: federal and state historic tax credits help offset the cost of rehabilitating the century-old building, while MassHousing provides subordinate financing. Dinosaur Capital Partners acquired the building in 2025 for $9.55 million prior to securing the construction loan.
JLL Capital Markets' Debt Advisory team was led by Managing Director Anthony Cutone, Director Madeline Joyce, and Associates Michael Schwarze and Joe Marinaro.
"Securing financing for office-to-residential conversions in today's market requires exceptional collaboration and creative structuring," said Cutone. "This project represents a true benchmark for adaptive reuse in Boston — bringing together lenders, public agencies and private stakeholders with a shared commitment to getting this transformational project across the finish line. 31 Milk Street's building dimensions, floor plates, window lines and interior layout uniquely coalesced into an opportunity for the adaptive reuse of the property as residential. Collectively, the combination of modern amenities, historic charm and prime location will serve as a key differentiator for the Residences, effectively establishing a new benchmark for boutique rental apartments in the heart of Boston."
Property and Conversion Details
The Residences at 31 Milk involves the conversion and restoration of the approximately 95,000-square-foot Beaux Arts office building at 31 Milk Street, which also has frontage on Hawley and Arch streets. The building was constructed in 1921 and rises 11 stories. Upon completion, expected in 2027, the project will deliver 88 market-rate apartments and 22 income-restricted units in studio, one-bedroom and two-bedroom layouts.
Planned amenities include a club room with lounge seating, fireplace, televisions and a kitchen; an open fitness area for cardio and weights along with separate yoga rooms; a conference room; private work-from-home rooms; secure bicycle parking; and a pet-washing station.
The property is located within walking distance of Faneuil Hall Marketplace, Boston Common, Downtown Crossing, the North End, the Rose Fitzgerald Kennedy Greenway and the Seaport District. It is also transit-oriented, with MBTA service at the State Street Blue and Orange Line station and the Park Street Green and Red Line station, as well as commuter rail access at South Station and North Station.
The project has been approved under Boston's Office-to-Residential Conversion Program, which offers incentives including a potential 29-year residential tax abatement covering 75% of the applicable tax burden, as-of-right downtown zoning and a streamlined permitting process. The 22 income-restricted units represent 20% of the total residential program, aligning the project with city affordability policy while retaining a majority market-rate revenue base.
Sponsors and Lenders
Dinosaur Capital Partners has been developing real estate and managing properties in the Boston area since 2010. The firm focuses on sustainable, mixed-income multifamily housing. It is led by co-founders Mark Dufton and Scott Oran, each of whom brings more than 35 years of experience in the real estate market.
Mugar Enterprises, Inc. is a privately held, family firm with more than 50 years of real estate development, operating and investment experience. Its commercial real estate portfolio spans shopping centers, entertainment venues, parking garages, hotels and biotech lab space.
The Davis Companies, through an affiliate, originated the senior construction debt as the first transaction in its integrated credit platform. S. USA Insurance Company co-originated the financing alongside The Davis Companies. MassHousing provided the subordinate layer of the capital stack.
Market Context
The 31 Milk Street financing comes as Boston's office-to-residential conversion program has attracted applications representing approximately 1.55 million square feet of office space and 1,853 proposed residential units. Many of those proposals have stalled, as high construction costs, complicated building layouts, historic-preservation requirements and difficult lending conditions have made it difficult to close financing. A funded construction loan represents a more advanced milestone than planning or permitting approval alone.
Greater Boston's multifamily market has shown demand outpacing new supply in recent periods, with year-to-date absorption of approximately 5,100 units compared with roughly 2,500 deliveries in one 2026 market report, and average asking rents of approximately $3,013 per month. The metropolitan development pipeline stood at roughly 14,523 units under construction, though high construction and financing costs have constrained new project starts. Those conditions support the rationale for adaptive reuse, where an existing building's structure can provide a cost basis that is difficult to replicate through ground-up development.
Construction on The Residences at 31 Milk began in early 2026. The existing USPS post office at the ground floor is expected to remain open during construction.
About JLL Capital Markets
JLL Capital Markets is a global provider of capital solutions for real estate investors and occupiers, offering investment sales and advisory, debt advisory, mergers and acquisitions, loan sales, equity and fund placement, net lease, derivative advisory and energy and infrastructure advisory services. The group has more than 3,000 specialists worldwide with offices in nearly 50 countries. JLL reported annual revenue of $26.1 billion and operates in more than 80 countries with a global workforce of more than 112,000 as of June 30, 2026.
Sources: JLL Newsroom, Sept. 29, 2026