From The Boston Herald
The John Hancock Tower has a new landlord.
Normandy Real Estate Partners, which owns two buildings on Summer Street, and Five Mile Capital Partners combined to make the winning bid for the 60-story Back Bay trophy property.
In a 25-minute auction at the Times Square law offices of Skadden, Arps, Normandy and Five Mile agreed to pay $660.6 million for the Hancock - about half what the iconic tower sold for 27 months ago.
Broadway Partners paid $1.3 billion for the Hancock Tower in late 2006 but lost it to foreclosure after defaulting on loans. Normandy and Five Mile had reportedly been buying up Broadway’s debt to better position themselves for a successful bid today.
The outcome is a major disappointment for Broadway. The I.M. Pei-designed landmark building was the premier tower in the company’s $3.3 billion purchase of 10 properties from Beacon Capital Partners LLC. Three years ago, at the time of purchase, the tower had a vacancy rate of 1 percent and Broadway gambled that rents would continue to rise and that it could easily repay its debt.
But Broadway bought the Clarendon Street landmark at the market’s peak and occupancy and rents at the 1.76 million-square foot building tumbled. The reflective glass tower will have 400,000 square feet of vacant space by year’s end with few lease prospects.
