It’s the perfect storm for landlords. There’s a down economy. Companies are forgoing relocations to save money, and in the past few years several new rental buildings have popped up creating a market flush with vacant apartments.
For most of its 34-year life, the Hancock Tower, which looms above its brick neighbors in Boston's Back Bay, has been the sort of place where money comes to be managed and protected. Its tenants include Ernst & Young and the investment firm Highfields Capital. The I. M. Pei–designed sliver of glass doesn't seem like a place where several hundred million dollars can vanish in a few months.
But that's exactly what happened at the 62-story building, now under its fourth owner in six years. In January, an aggressive young wheeler-dealer defaulted on a portion of the building's $1.3 billion mortgage just 24 months after buying it. In March, two firms that had purchased chunks of the tower's second mortgage for pennies on the dollar assumed control, essentially rendering up to $400 million of debt worthless. The Hancock's market value is now about $700 million—half what it appraised for less than two years ago.
That is the intriguing, if somewhat depressing, idea floated by Yale economist and housing guru Robert Shiller in an interview posted on the Yahoo! Finance website.
Speculative overbuilding in markets like Phoenix and Miami helped inflate the last housing bubble, the one we are all trying to dig out from.
But Shiller notes singled out Boston as one of the markets that has performed relatively well during the downturn. And he raises the question whether the Hub might become ground zero for a new housing bubble.
He noted the volatility of the Boston market in recent years as something that, apparently, makes it vulnerable to bubble housing economics
There were 582 foreclosure deeds recorded in May, a 58.6 percent decrease from 1,405 during the same month in 2008, and a 24.3 percent drop from April.
So far this year, the number of foreclosure deeds statewide has gone down 26.3 percent to 4,110, compared with 5,576 during the same period last year, Warren Group said.
Timothy M. Warren Jr., Warren Group’s chief executive, called the new data “encouraging.’’ Foreclosure deeds in May were at the lowest level since April 2007, he said.
Live Nation, the largest producer of live concerts in the world, has announced that they have reached an agreement to sell three Boston venues - The Boston Opera House, the Orpheum Theatre, and the Paradise Rock Club - for a combined price of $22.5 million. The name of the buyer has not been identified.
The deal is expected to close in the third quarter and includes an earn-out close at the Orpheum Theatre for the next five years. The California-based company described the three properties as "non-core real estate holdings" and stated they will use the funds to pay off debt. Live Nation will continue to promote non-theatrical shows at the three venues.
The Opera House, which was reopened after extensive renovation in 2004, has hosted mostly theater and stage productions and a handful of concerts over the past few years. The Orpheum Theatre's use has been reduced considerably since the opening of the brand new House of Blues on Lansdowne Street, which is also owned by Live Nation. The surprising party of today's news is the sale of the famed Paradise Rock Club, which was just purchased by Live Nation last year.
