Commercial Real Estate – Sold! Boston’s John Hancock Tower Sells at Auction for Half of 2006 Purchase Price

The landmark John Hancock Tower in Boston, New England’s tallest building was sold at a foreclosure auction yesterday for a debt assumption package totaling $660mm. The buyer was a newly formed partnership between Normandy Real Estate and Five Mile Capital. Five Mile Capital, by the way, was the holder of $20mm in mezzanine debt on the building.

 

It only took 36 months for Broadway partners to lose the trophy property that they paid $1.3b for just 36 months ago.

Their investors are not thrilled… Broadway defaulted on the mezzanine piece in January and fostered no delusions about securing a refi or attracting equity partners.

 

Broadway Partners also lost the office tower at 10 Universal Plaza in LA. Normandy and Five Mile were able to pick-off that one for a mere $304mm

 

Broadway massively leveraged up their investor’s capital in-order to buy over $14b in commercial real estate properties beginning in 2002. Those buildings will now be returned to their rightful owners at reasonable prices and with sensible debt structures. Unfortunately, much damage has already been done, not just by Broadway but many commercial real estate private equity players around the world.

———————————————————————————–

MasterPlan Capital; Commercial Mortgage Lenders

Commercial Mortgage Default: Bought for $1.3b John Hancock Building in Boston Expected to Fetch $700mm or Less at Foreclosure Auction

The John Hancock Building will be sold at auction today after the owner, Broadway Partners, defaulted on its mortgage debt.

 

Broadway just bought the building in ’06 for $1.3b but can’t secure a refi so the lender, acting very quickly, is dumping the behemoth on the Boston commercial real estate market.

 

They might get $700mm for it, they might get less. In-any-case this is a sign of incredible stress in the commercial real estate industry.

 

You can read more at boston.com.  

UPDATE: The tower sold for a ~$660mm to a partnership between Normandy Real Estate & 5 Mile Capital. Details in The Wall Street Journal.

——————————————————————————————–

You can apply for a commercial mortgage loan online at MasterPlan Capital.