The Hancock Building in the Back Bay, which is the tallest building in Boston (actually the tallest building in New England, but who's counting?), was just sold at a foreclosure auction today for a cool $660.6 million.  Sounds like a lot of money, right?  Ummm, not so much when you compare it to the $1.3 billion the (now previous) owner, Broadway Capital Partners, paid for the building in 2006 in what could be one of the "more stupidest" real estate purchases of all time.  Basically, they overpaid for the Back Bay landmark and tried to raise rents to cover their investment.  Instead all they did was drive their tenants out of the building.  Last I heard, vacancy rates were +-15% for the building, which certainly can't be good for paying off the massive debt they took on.

The Boston Globe reports today that the building was sold to a partnership of Normandy Real Estate Partners and Five Mile Capital Partners which was the only bidder in the auction that lasted a total of 10 minutes.  Not much interest in I.M. Pei's iconic design anymore I guess.  Too bad.

Good price?  At $660M, that breaks down to about $375 per square foot for the 1.76M square foot building.  It's certainly a lot cheaper than most Back Bay condo buyers are paying in the right now!  But with the way many companies are struggling and need to downsize office space and rent, it is by no means a "steal" right now.  It makes a lot more sense than $1.3B though!

photo credit flickr.com (ronindunedin)

What are your thoughts?  Comment below!

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