Broadway Real Estate Partners
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December 29, 2006
N.Y. FIRM BUYS HANCOCK TOWER (BOSTON GLOBE)
By Thomas C. Palmer Jr.
Globe Staff


A New York real estate firm yesterday bought the iconic John Hancock tower in the Back Bay and other properties across the country for about $3.3 billion from Beacon Capital Partners LLC of Boston.

A real estate executive briefed on yesterday’s deal said the Hancock portion of the deal brought about $1.3 billion, the price real estate executives had forecast when Beacon Capital Partners sin October it would sell the property to Broadway Real Estate Partners LLC. The executive briefed on the deal asked not to be identified because he was not authorized to speak.

In 2003, Beacon Capital, led by chairman Alan Leventhal, bought the Hancock complex that includes the 60-story tower for about $910 million. The property also includes the nearby Brown and Berkeley buildings and a 2,000-car parking garage, giving Beacon a return of more than 40 percent on its investment.

Yesterday’s transaction also including 501 Boylston St., which Beacon Capital purchased in 2002 and redeveloped with new retail space. Officials from Beacon Capital, a privately held real estate investment firm, declined to comment.

The real estate executive briefed on the transaction said Broadway yesterday closed on 501 Boylston and sold it the same day. Broadway paid Beacon Capital about $300 million and “flipped” the building for about $380 million; he said. The executive did not say who the new owner is.

Also yesterday, Dow Jones Newswires reported that John Hancock Financial Service, a subsidiary of Manulife Financial Corp., had bought the Brown and Berkeley buildings for $454 million.

In a statement, Scott Lawlor, founder and chief executive of Broadway, called the portfolio “a significant group of marquee properties in highly desirable markets.”

The buildings were the remaining assets of Beacon Capital’s second investment fund, which opened in December 2001 and raised $740 million in capital.

“I know a lot of the investors, and they’re all thrilled,” said Rob Griffin, president of Cushman & Wakefield of Massachusetts Inc., a real estate firm that helped market the Hancock properties.

Griffin recalled that some in the industry thought Beacon Capital had overpaid when it bought the Hancock complex. But, “Now, because vacancy is starting to slip to 5 percent and below, rents are starting to rise at a much faster rate, so I think there’s still room for these properties to grow some more,” he said.

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Thomas C. Palmer Jr. can be reached at tpalmer@globe.com. This report contains material from Dow Jones Newswires.