And is still going down. Just in case you were wondering.
Filed under Uncategorized
Tagged as Commercial real estate
Note Five Mile is the firm founded by Gary Holloway and Chip Kruger after they left RBS/Greenwich Capital, also a lender.
Will Hancock Tower Be Handed Off?
The owner of the iconic Boston office building is in trouble with lenders.
Stephen Taub – CFO.com | US
February 10, 2009
The credit crunch and real estate crisis have claimed perhaps the most high profile victim: The John Hancock Tower in Boston. Boston’s signature office building is being auctioned off on March 31, according to the Boston Globe.
The move comes after tower owner Broadway Partners defaulted on debt payments linked to the iconic building and two other properties it purchased in 2006, according to the report. The 60-story Hancock Tower has about 1.7 million square feet of office space and is the tallest building in New England.
SL Green Realty Corp. was reportedly hired by a group of Hancock lenders to handle the auction, according to The Globe. Meanwhile, lenders and Broadway Partners are continuing to negotiate a possible settlement to extend the loans and head off a potential sale. “We continue to own the [Hancock] and are having an open dialogue with our lenders at this difficult financial time,” Jonathon Yormak, a principal at Broadway Partners, told the paper.
Broadway Partners bought the building in December 2006 for a record $1.3 billion, according to the report. It used mostly borrowed money.
However, the Globe reports that the building is now worth closer to $700 million to $900 million, underscoring the damage from the recent boom and bust cycle that has rocked the commercial real estate market, even among the most desirable properties in vibrant cities. “This is happening in every major city where deals were capitalized this way, with lots of short-term, highly leveraged debt,” Bob Clifford, partner at the real estate investment firm Goedecke & Co., told the paper.
Experts, however, concede that there are few viable potential buyers. As a result, the lenders to the deal could wind up owning the building. They include Normandy Real Estate Partners and Five Mile Capital Partners, which the Globe says have previously asserted they own a controlling portion of the building’s debt based on a recent appraisal.
Other lenders on the building include Petra Capital Management, BlackRock Inc., RBS Greenwich Capital, a unit of Royal Bank of Scotland Group, and the John Buck Co.
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