News
Sweet, not Sweetheart
June 10, 2010
| All eyes have been on the Hancock since it became the region?s tallest tower in 1976. Fitting 1.8M SF gracefully into historic Copley Square was a marvel. Having its windows pop out, shattering on the street was outlandish. Recouping, it became a premier Back Bay address that last year fell to foreclosure, and then last month landed the year's hottest lease deal. |
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| We snapped Normandy Real Estate Partner?s Mark Roopenian contemplating the 208k SF lease, plus expansion option, that his team engineered with Bain Capital. It took them a year to lure the private equity firm away from nearby 111 Huntington. Mark says a major attraction was the 360-degree views. ?This is what we sell.? That and the promise of Normandy?s $50M renovation, started last month, which he says will keep the Tower ?a cut above.? Before approaching Bain, Normandy surveyed brokers and tenants about improvements, then put together a renovation plan. Of course, Normandy romanced Bain. But did they offer a sweetheart deal as rumor has it? ?Absolutely not,? Mark says. ?It was a market deal.? |
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| Michael Loughlin, the tower?s GM, checks on upgrades due for completion in December. He's in the lobby, which is getting new lighting, finishes, and a caf. All the building's operating systems will be modernized and parking installed underground. The original design by Henry Cobb of Pei Cobb Freed managed to slide the glass curtain wall rhomboid into Copley Square, where it looks like a knife blade. After the window popping problem was solved, John Hancock occupied it for decades. In 2000, the insurer opened the doors to outside tenants. Mark says it was quickly filled by top-tier firms like Ernst & Young and Highfield Capital. |
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| Normandy?s Claire Minerly, Mark, Abby Callahan, and Jack Glancy help run the Tower that's now 3% vacant compared to 20% when Normandy bought it last year for about $650M. Starting in 2008, Normandy began to purchase debt on the property, which Broadway Partners paid $1.3B for in ?07. In early '09, when the mezz piece came due, Mark says, "with values falling fast, financing was non-existent." Normandy and Five Mile Capital picked up this iconic New England asset for a song. (Some songs cost more than others—Rush Limbaugh hired Elton John last week for a rumored $1 million.) Since ?05, the NJ-based private equity firm has acquired and developed about 5M SF of offices and hotels in the metro area. Now, Mark says the Hancock is a ?defining asset? for Normandy, a chance to succeed by delivering a handsome return to investors. |
