Hancock Tower's owner finds itself in a crunch as rents fail to cover debt

It was an eye-popping deal struck at the top of the real estate market: Broadway Partners LLC bought the Hancock Tower in late 2006 for $1.3 billion, betting the iconic skyscraper would command ever-rising rents as companies clamored for office space.

Now, that purchase has boomeranged on the New York real estate investment firm: Two of the Hancock's largest tenants have left, rents for top-shelf office space are falling, and Broadway Partners next month must repay of hundreds of millions in debt it has so far been unable to refinance.

Broadway Partners must now either get an extension on its Hancock loans or raise fresh capital in an environment where investors are running away from high-flying commercial property deals, said Boston real estate executives familiar with the matter.

A spokesman for Broadway Partners declined to comment. But others in the real estate industry said Broadway's predicament is but one example of the challenges facing recent buyers who borrowed heavily to purchase commercial property.