Hancock owner defaults on loan

[bbfen]

You say that as if it can't be rebuilt.

I say it as someone who recognizes that it 1) would cost money to restore 2) would be a loss to operate 3) would decrease the RSF the current building owner purchased.

It was an informal agreement from the start, and the city didn't bother get it in writing. Does that blow? Sure, but it's a slippery slope, expecting current ownership to atone for the (perceived) sin of the past owners.



Finally, I think most of us have been around long enough look past City Hall's blustering and realize that if anyone down there really cared about this, an observation deck would have already been rebuilt and opened to the public.

Ron, perhaps you should start a letter-writing campaign to the Mayor so he'll wrap it into his re-election bid.

 

[FrankG]

How much of the building is occupied right now? I thought there was currently an oversupply of commercial/office real estate in the city?

 

[bbfen]

How much of the building is occupied right now? I thought there was currently an oversupply of commercial/office real estate in the city?

There's not an oversupply of real estate above 50-storeys in the city, put it that way.

 

[Ron Newman]

they want to justify higher rents

But why would this be in the city's interest? Lower rents are better for the businesses who pay them. Maybe the city as a whole is better served by an A- building than an A building at this location.

 

[vanshnookenraggen]

But why would this be in the city's interest? Lower rents are better for the businesses who pay them. Maybe the city as a whole is better served by an A- building than an A building at this location.

First off, developers/building owners have no reason to think of anything but their bottom line. Secondly, expanding parking and refurbishing this building IS in the city's interest as it can better compete with other cities around the world (or in downtown) who offer the same amenities and deals. Class A is Class A and if you don't have it you are losing out. The city only cares about getting enough taxes and if it needs Class A (with everything that comes with it) then it will make sure developers and building owners can easily build it.

 

[Ron Newman]

But my question is whether the benefit to the developer of charging higher rents is counterbalanced by the alternative benefit to the city of having lower rents for local business people.

 

[Beton Brut]

Ron, real estate leasing isn't really part of my background in procurement or strategic sourcing, but I would guess that small local companies (employing < 250) would likely not be candidates to lease in a Class A space in the downtown core of any city. Their needs could be fulfilled by either Class B or C space, or in Class A space in a suburban office park.

The loss of the observation deck is an object lesson in something I tell my colleagues all the time: if it isn't in writing it may as well not exist. I agree in spirit with people's desires to see the observation deck restored -- part of the "magic" of tall buildings is being able to go up in them, to gaze down on our world as if with new eyes.

 

[Ron Newman]

True, but if new Class A buildings go up elsewhere downtown, leaving this one to decline to A- or B+, is that necessarily a bad thing?

 

[Beton Brut]

This specific building needs to remain "top shelf," even if we build smarter, greener, and taller elsewhere in Boston. With its iconic status as one of the most beautiful curtainwall skyscrapers, (truly the best [and last] in class before the insipid rise of PoMo), the ownership of the Hancock Tower would be foolhardy to allow its luster to fade. Let some of the D- towers downtown (One Beacon, One Post Office Square) slide a bit as you suggest.

 

[pelhamhall]

The city gets taxes on this building. If it's now only "worth" about $700M, then the owners should get a tax abatement. It used to be worth over $1B.

The city should be doing whatever it possibly can to increase the value of commercial real estate. When a developer says "My building would be worth more if I could install larger windows" the BRA should say "what can we do to help?" instead, Menino's BRA says "what's in it for us?" and then checks the developer's record to see how much $$$ they've donated to Boss Menino's war chest.

The new Hancock Tower owners can squeeze in about 200 cars in their current basement, with no problem or issue to others... this probably adds millions of dollars to the property's value. So the question should be "what we do to help them in this endeavor to increase Boston's revenues?"

That's the only question worth asking, not, "how can we screw them out of their most valuable floor?"

 

[tobyjug]

Yesterday, I happened to be speaking with a gentleman who has appraised this building in the past. It wouldn't surprise me if its current fair market value is south of $500 million.

 

[pelhamhall]

Fair market value and city assessed value are rarely the same. Just ask Don Chiafaro, forever banned from building in this city because he pointed this out.

 

[bosma]

Assessment as of January 1, 2008, statutory lien date.
FY2009 Building value:
$599,337,500.00 FY2009 Land Value: $61,096,000.00 FY2009 Total Value: $660,433,500.00 FY2009 Total Assessed Value: $660,433,500.00
FY2009 Tax Rates (per thousand): - Residential: $10.63 - Commercial: $27.11
FY2009 Gross Tax:
$17,904,352.19 - Residential Exemption : $0.00 - Personal Exemption : $0.00 FY2009 Net Tax*: $17,904,352.19

Fiscal Year Property Type Assessed Value * 2009 Commercial 660,433,500 2008 Commercial 602,128,000 2007 Commercial 514,586,500 2006 Commercial 439,054,500 2005 Commercial 417,944,000 2004 Commercial 404,957,000 2003 Commercial 461,570,500 2002 Commercial 486,661,484 2001 Commercial 447,113,004 2000 Commercial 337,000,500 1999 Commercial 258,078,000 1998 Commercial 240,553,500 1997 Commercial 223,191,000 1996 Commercial 204,878,000 1995 Commercial 203,655,500 1994 Commercial 192,299,000 1993 Commercial 192,299,000

 

[tobyjug]

Fair market value and city assessed value are rarely the same. Just ask Don Chiafaro, forever banned from building in this city because he pointed this out.

This is very true. Assessed value is usually calculated by the shotgun like "mass appraisal" systems, whereas you won't get a reasonably accurate measure without a fee appraisal.

Either way, sales information is less reliable as a guide these days because because so many sales are not arms length.