Boston's tallest skyscraper and one of the city's most recognizable landmarks is being sold to real estate tycoon and newspaper publisher Mortimer Zuckerman's company for $930 million, the firm said Monday.
Boston Properties agreed to acquire the iconic John Hancock Tower and Garage from a partnership between Normandy Real Estate Partners and Five Mile Capital Partners.
The company is paying $289.5 million in cash and is assuming $640.5 million in debt in the deal. The transaction is expected to close in the fourth quarter.
The Normandy-Five Mile Capital partnership bought the 62-story office tower in a foreclosure auction in March 2009 for about $660 million, including $20 million in cash and $640 million in debt.
A previous owner, Broadway Partners, had defaulted on loans used to buy the building in late 2006 after the real estate market turned sour and property owners couldn't refinance short-term debt.
Broadway Partners, based in New York, had bought the building as part of a $3.3 billion deal for a package of buildings in four cities, which also included the Citigroup Center in Los Angeles, the Bank One Tower in Denver and 2445 M Street in Washington. Broadway Partners didn't specify how much it paid for each of the buildings.
The 790-foot blue glass Hancock Tower was designed by the architectural firm Pei Cobb Freed & Partners and was completed in 1976. The tower, near Boston's Copley Square, earned notoriety in its early days for its massive windows, which sometimes popped out and fell to the streets below, forcing police to cordon off the area.
Stronger glass had to replace the entire facade but plywood was used to plug the holes during the replacement, and the building was dubbed the "Plywood Ranch" and "Plywood Tower."
A popular tourist destination, the 60th-floor John Hancock Tower Observatory, was closed following the attacks on Sept. 11 and has yet to reopen.
The building has been sold a number of times. Ben Thypin, a senior marketing analyst at Real Capital Analytics, said the building was appraised at around $1 billion in late 2006.
Boston Properties, the real estate investment trust headed by Zuckerman, also owns the Times Square Tower and Citigroup Inc.'s headquarters in New York. Boston Properties was part of a group of investors that bought the General Motors Building in New York City in 2008. It has a majority stake in the building and maintains the property.
Zuckerman is also the publisher of the New York Daily News, and Chairman and Editor-in-Chief of U.S. News & World Report.
Shares of Boston Properties fell 38 cents to $83.26 in afternoon trading Monday.
This program aired on October 4, 2010. The audio for this program is not available.