John Hancock Tower going up for sale

[BostonSkyGuy]

John Hancock Tower for sale
The iconic building being sold as part of an investment portfolio
By Thomas C. Palmer, Globe Staff | September 6, 2006

The iconic John Hancock Tower in the Back Bay, designed by I.M. Pei and perhaps Boston's most widely known building, is going up for sale, just a few years after Boston-based Beacon Capital Partners LLC bought the complex for $910 million.

Capital Partners, a rapidly expanding private real estate investment fund, confirmed today that the company is selling the Hancock and nine other buildings in Boston, Washington, D.C., Los Angeles, and Denver that are part of an investment portfolio.

The buildings will hit a commercial real estate market that remains robust for top-quality properties that are well-leased, as the Hancock Tower is.

The Boston buildings for sale include 501 Boylston St. --like the Hancock, a former insurance company's headquarters -- which the company purchased in 2002 and redeveloped.

The buildings being sold now are the remaining holdings in Beacon Capital Strategic Partners II, a fund that opened in December 2001 and raised $740 million from investors. Beacon Capital has developed two additional funds since Fund II, the last one generating about $2 billion for investment.

Beacon Capital will still have several buildings in Boston and the Boston area, though none with the prominence of the Hancock, part of a complex with almost 3 million square feet of space. Those include One Beacon Street and 200 State Street.

The Hancock complex, on Clarendon and Berkeley streets in the Back Bay, include the tower, two other office buildings, and a 2,000-car parking garage.

The mirrored, 60-floor Hancock Tower, built in the 1970s, was initially plagued by windows that fell out. But after that and other mechanical problems were resolved the building took its place at the top among Boston's office towers, literally and figuratively.

It is the tallest building in Boston, and some argue its most handsome, reflecting historic Trinity Church at Copley Square on its angled north side.

Beacon Capital is engaging the financial firms Eastdil and Morgan Stanley to market the portfolio. Beacon is not expected to set an asking price on the buildings.


http://www.boston.com/business/artic...6/johnhancock/

[Ron Newman]

I would hate to see a new owner rename this landmark. Please don't.

[castevens]

McDonald's Tower isn't appealing to you?

[statler]

Originally Posted by castevens

McDonald's Tower isn't appealing to you?

Please...if there is one thing Boston needs, it would be its very own Trump Tower.

Complete with signage!

[bbfen]

Boston Tower Is Among 10 Buildings in Big Sale

By TERRY PRISTIN
Published: October 14, 2006

Broadway Partners, a highflying New York real estate fund that bought its first office building six years ago, spending $4.8 million for a former school building in Hartsdale, N.Y., has agreed to buy 10 prime office buildings across the nation from Beacon Capital Partners of Boston in a multibillion-dollar deal.

Neither Scott J. Lawlor, the chief executive of Broadway Partners, nor Alan M. Leventhal, the chief executive of Beacon Capital, would comment on the transaction, which has not closed.

But a real estate specialist confirmed that the companies had recently entered into a sales contract.

Broadway is paying $3.43 billion for the Beacon portfolio, which includes the 60-story John Hancock Tower in Boston, according to The Slatin Report, an online real estate newsletter that first reported the transaction.

From the NYTimes: http://tinyurl.com/uc6pn

[statler]

Hancock Tower gets sold
Beacon Capital cuts deal with N.Y. firm

By Thomas C. Palmer Jr., Globe Staff | October 14, 2006

Broadway Real Estate Partners LLC of New York has agreed to buy the iconic Hancock Tower in Boston's Back Bay along with a huge portfolio of other properties from Beacon Capital Partners LLC of Boston, two real estate executives briefed on the deal said yesterday.

No price was disclosed, but the Hancock complex of buildings, purchased in 2003 for almost a billion dollars, was expected to bring $1.3 billion or more, real estate executives said last month when Beacon Capital put the multicity portfolio of properties up for sale.

The executives asked not to be identified because the sale has not closed, and they are not authorized to talk about it.

The buildings being sold include not only the glass tower on Clarendon Street, Boston's tallest building, but also 501 Boylston St., which Beacon Capital bought in 2002 and redeveloped.

All the properties being sold are part of what had remained unsold of Beacon Capital's second investment fund, which opened in December 2001 and garnered $740 million to be leveraged and invested in real estate . The deal is expected to close within a couple of weeks.

Beacon Capital is led by Alan Leventhal, its chairman and chief executive. No one at Beacon Capital would comment yesterday.

The portfolio under agreement includes 10 Universal City in California, 2445 M St. in Washington, D.C., and 1125 17th St. in Denver.

Broadway Real Estate Partners is, like Beacon Capital, a private real estate firm that invests in first-class commercial properties in selected cities. Broadway says on its website that since 2000 it has purchased more than 7 million square feet of space worth more than $2.2 billion. No one from Broadway could be reached for comment.

The company owns 10 Post Office Square in Boston and Prospect Hill Office Park in Waltham, as well as Aon Center in Los Angeles; Pickwick Plaza in Greenwich, Conn.; and 660 Madison Ave. in New York.

Since Beacon Capital's second fund closed, it has developed two larger funds, the last one of about $2 billion for investment. The company has expanded to Europe, buying buildings in London and Paris.

Beacon Capital's objective is to hold its purchases for a few years, increase their value by leasing and making improvements, and produce returns of 18-20 percent ; their record has been even better than that.

As of late 2005, the fund that is now being sold had already returned all of the investors' capital and then some, with half the properties it bought with the fund yet to be sold.

Executives at Cushman & Wakefield of Massachusetts Inc., which assisted in the sale , said last month that it is virtually fully leased. Tenants include the advertising firm Hill Holliday, insurance firm Marsh & McLennan Cos., consultant Charles River Associates Inc., and Investors Bank and Trust Co.

Beacon Capital bought the 60-floor Hancock tower, two buildings nearby, and a 2,000-car parking garage from John Hancock Financial Services Inc. in March 2003 for $910 million. Hancock is now part of Toronto-based Manulife Financial Corp.

Beacon Capital still has several properties in the Boston area, including One Beacon St. and 200 State St. It has put a development project in the Fort Point Channel area of South Boston, Channel Center, up for sale.

Thomas C. Palmer Jr. can be reached at tpalmer@globe.com.

Link

[Ron Newman]

So who now owns the 'old Hancock building', the one with the weather beacon and John Hancock Hall?

[bbfen]

Originally Posted by Ron Newman

So who now owns the 'old Hancock building', the one with the weather beacon and John Hancock Hall?

The Times article also noted that, "the Beacon portfolio includes two nearby buildings, 200 Berkeley Street and 197 Clarendon Street, and a fourth Boston building, 501 Boylston Street."

Isn't the old Hancock at 200 Berkeley?

I think the really interesting part is that 501 Boylston/New England Life/The Nwbry is also part of the package. Or do I have my location wrong?

EDIT: spelling

[kz1000ps]

Tower Sale-Price Boom May Push Rent Sky High but will it SOAR?

By Scott Van Voorhis
Boston Herald Business Reporter
Tuesday, November 28, 2006 - Updated: 05:00 AM EST

There’s a dark side to the sudden frenzy that is seeing marquee Boston skyscrapers fetch record sales prices: rising rents.

Downtown tower owners may be breaking out the champagne as the Hancock and other top high-rises fetch prices approaching $1 billion.

But companies who rent office space in Financial District towers may soon find themselves paying the price, downtown real estate executives warn.

After shelling out huge sums for downtown towers, the new owners are likely to turn to rent increases to help pay off their big investments.

“You have a lot of very savvy institutional owners who have paid a lot of money,” said Joseph Sciolla of Cresa Partners, which advises companies on real estate decisions. “They are going to make sure they push rents as far as they possibly can.”

Said David Martel, head of downtown leasing at Cushman & Wakefield, “The trend is not good for tenants right now.”

In a move that could set the stage for a big rent run-up, a New York company is closing in on a blockbuster deal that values the Hancock tower and related buildings at roughly $1.4 billion.

That’s up from the more than $900 million paid just a few years ago by the outgoing owners, Boston-based Beacon Capital Partners.

An aggressive Wall Street buyout firm, in turn, has unveiled a $36 billion deal to buy Equity Office Properties, which owns a nationwide real estate portfolio that includes Boston’s largest single block of office towers.

The big changes will put more upward pressure on Hub office rents, which rose 12 percent over the last year, reports Richards Barry Joyce & Partners. Rents for suites in the top floors of downtown towers are already headed toward the $60 a square foot mark.

“Rents are coming back,” said Rich Herlihy, executive vice president at Richards Barry, adding new owners “are going to be looking for every opportunity they can to push rents up.”

[kz1000ps]

Hub commercial real estate sales to hit $10B record


Boston Business Journal - December 8, 2006
by Michelle Hillman - Journal staff

Investors will have spent more than $10 billion buying commercial real estate in Boston by the end of the year, putting the city on the map as a target of global investment while jumping 40 percent from last year's record level.

So far this year there have been at least $8.2 billion in deals closed -- and that doesn't including the pending sale of the John Hancock Tower and State Street Financial Center for nearly $3 billion.

"Boston certainly is going to break that $10 billion threshold, and that's a record," said Dan Fasulo director of research at the New York City commercial real estate research firm Real Capital Analytics LLC.

Boston's next highest grossing year for investment sales was last year, when the market closed $7.3 billion worth of deals, according to Real Capital Analytics.

"Boston has been one of those markets that's on the radar," said Fasulo. "This wave of capital, they're looking for the top assets nationwide."

Investors have found plenty of assets to buy in Boston this year as long as they're willing to pay record prices and accept lower returns. Realizing investors were willing to go to lengths not seen before in Boston, owners, anticipating barrels of cash being wheeled up to their doorsteps, readied buildings for sale.

Properties sold a just few years ago made appearances back on the market. Two of the repeats awaiting final sale are the trophy John Hancock complex -- the 1.1 million-square-foot tower and 501 Boylston St. -- which is expected to sell to Broadway Real Estate Partners LLC of New York City for between $1.7 and $1.9 billion, and the State Street Financial Center, which is being sold for $880 million to Fortis Property Group of Brooklyn New York.

The plethora of nine-figure deals -- and a couple of rare 10-figure deals -- are the latest indicators that Boston's real estate market has arrived as pension funds, real estate trusts, private investors and wealthy individuals look for places to invest.

According to Real Capital Analytics, Boston is outpacing all but six U.S. markets in total volume of sales closed by dollar value, including San Francisco, Seattle, Houston and Washington D.C. Cities leading the pack are: New York, with $28.7 billion in sales; Los Angeles with $12.7 billion; Chicago with $12.2 billion; Atlanta with $9.4 billion; Dallas with $9.1 billion and Phoenix with $8.5 billion.

Nearly half of the high-priced and high-profile sales have been primarily brokered by Cushman & Wakefield of Massachusetts Inc. "We may do $5 billion," said Robert E. Griffin Jr. of Cushman & Wakefield. "We've already done $4.6 billion."

Among the sales Cushman & Wakefield brokered were:

* The Center for Life Science in Boston's Longwood Medical and Academic Area for $700 million.
* Technology Square at MIT in Cambridge for $600 million.
* 4 & 5 Cambridge Center in Cambridge for $180 million.
* 265 Franklin St. in downtown Boston for $170 million.

Coming off the firm's most successful year in history, Griffin, president of the New England area for Cushman & Wakefield, said he doesn't expect next year to be any different, barring a major catastrophe or natural disaster.

"I think there's been a secular shift," said Griffin. "Real estate is a much more accepted asset class. It's going to trade much more liberally than it has in the past. It's going to continue as long as we're in this low interest rate environment."

Office properties, in particular, are in demand because real estate investors are making bets on the recovering market as supply of office space tightens and few new projects get off the ground. The positive market fundamentals combined with an enormous amount of capital have made for an intensely aggressive bidding environment, said Griffin, who added buyers are "putting real money at risk, and lots of it."

"I'm overwhelmed with the volume of activity," said Griffin. "Certainly none of us could have expected the shift that has taken place in the market with just how sought-after these assets have become."

Real estate is now the apple of investors' eyes, given the fact that it is now producing annual returns in the mid-teens, said Michael Smith, a managing director at Jones Lang LaSalle Inc.

Smith said he expected his firm would close $1 billion worth of commercial sales this year as investors continue to prize real estate as an investment and look to diversify their portfolios.

Five years ago, he estimated, executives in charge of managing investment funds allocated about 4 percent of funds to real estate -- now the allocation is closer to 10 percent of the fund.

"I don't think we're in a bubble," said Smith. "In its simplest form, the asset class has gained acceptance. Because of its acceptance as an asset class, everyone's giving real estate as an allocation" in their investment portfolios.

Investors are making buys based on rental growth predicted for the region. The Boston office of Property & Portfolio Research Inc. is forecasting rents will grow 5.9 percent annually for the next five years.

"They're definitely betting on increasing cash flows," said Stephen White, a real estate economist at Property & Portfolio Research Inc.


Michelle Hillman can be reached at mhillman@bizjournals.com.
© 2006 American City Business Journals, Inc. and its licensors. All rights reserved.