Best Boston Foreclosure Flip?
Boston Properties Inc. now owns the two tallest buildings in Boston’s Back Bay.
The real estate firm said it has bought the John Hancock Tower for $930 million after a fierce bidding war over the signature tower. Boston Properties already owns the neighboring Prudential building.
The deal further strengthens the firm’s hold on the Back Bay office market, where it also owns towers at 101 and 111 Huntington Ave. In the battle for the Hancock, Boston Properties beat out former owner Beacon Capital Partners of Boston, Vornado Realty Trust of New York, and Fortis Properties, also of New York, among others.
The Hancock is by far the most valuable building to change hands in Boston this year, where the sales market is coming alive after extremely sluggish activity during the recession.
“The bidding was as fierce as anything I’ve ever handled during my 30 years in this business,” said Robert Griffin, who brokered the sale for Cushman & Wakefield, a real estate services firm.
Boston Properties said it would pay $289.5 million in cash and assuming $640.5 million in debt.
Although the transaction was initially marketed as a partial sale, Boston Properties is buying 100 percent ownership of the tower. The seller, Normandy Real Estate Partners, will retain management responsibilities for the next two years, as it completes renovations of the lobby and construction of an underground parking garage.
A team of Normandy and Five Mile Capital Partners bought the Hancock for $660 milllion at a foreclosure auction in 2009 after prior owner Broadway Partners missed several debt payments. Normandy has attracted several new tenants to the building, including investment powerhouse Bain Capital, which agreed to lease seven floors earlier this year. That lease increased the tower’s occupancy to more than 95 percent, putting Normandy in a better position to sell.
The 62-story Hancock Tower is one of the most notable buildings in Boston. The office building has roughly 1.7 million square feet of rentable space.
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