Boston's John Hancock Tower Scheduled For Foreclosure
bostonherald.com
Hancock owner likely eyeing bankruptcy to keep tower
By Thomas Grillo
Wednesday, March 11, 2009
The John Hancock tower is scheduled for a foreclosure auction later this month, but there’s speculation that its owner will file for bankruptcy to keep creditors at bay.
“They’re seriously talking about it,” a source familiar with the situation told the Herald. “If a lender threatened to take your house and you had the ability to delay it and force the bank to do a workout, why not try it?”
The Hancock building is scheduled to be sold to the highest bidder on March 31. The unloading of the 60-story iconic glass tower came about after its owner, Broadway Partners, defaulted on some debt payments on the building it bought in 2006 for $1.3 billion.
At the time, Broadway gambled that rents in the city’s premier office tower would exceed $100 per square foot. But the slowing economy and falling rents made it impossible for the New York-based firm to earn enough income to meet its debt payments, and wary lenders were unwilling to refinance the massive mortgage.
Today, real estate experts say the tower is worth an estimated $800 million.
Harold Murphy - a bankruptcy attorney at Hanify & King who handled Chapter 11 proceedings for Donald Chiofaro, owner of International Place - said Broadway Partners has several options up until the auction.
“They could make a deal, file for bankruptcy or sue in state or federal court alleging the lender did something wrong,” he said.
In 2004, Chiofaro was in danger of losing International Place to Tishman Speyer Properties, a New York-based developer. But the scrappy developer filed for bankruptcy and convinced Prudential Real Estate Investors to refinance the project.
Tishman Speyer profited from the deal and Chiofaro’s ownership was reduced, but the former Harvard linebacker retained his position at the 1.8-million-square-foot complex.
A spokesman for Broadway Partners yesterday refused to speculate on the company’s plans.
“We continue to negotiate with lenders, and hopefully something positive will take place before the auction,” said Steven Solomon. |
