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John Hancock office tower foreclosure
By BostonLogic on Mon, 01/26/2009 - 9:26am
Thoughts: I'm not surprised to hear about this happening. Just like people investing at the top of the residential market, some investors are bound to be burnt. What I still don't understand is why some companies still pay the $60-100/sq. ft. to be in a building in the middle of a city. If your company has no need to be near a city, why pay those prices? I think after this downturn you will see a lot more office construction outside of cities.
follow more of the breaking developments here.
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Comments
office construction outside of cities?
Maybe we will see it and maybe we won't! When things are more centralized it's easier for people to use public transport to get to work, which can be a convenience (if the T isn't packed) and a cost savings for some employees (cheaper car insurance, using less gasoline). Plus, it's easier for the car challenged to get to work (try getting to work out on the 128 tech belt without a car). Also, if less people are driving it results in less pollution from cars, less maintenance needed for roads. And I think these things are overlooked cost savings for our society as a whole. And if the price of gas goes up again, governments may encourage more centralization to help reduce dependency on unstable foreign energy sources.
What I think we'll see more and more of, especially amongst knowledge workers, is more people having to work from home; thus saving companies office costs.
Working From Home
Hi Mick,
Thanks for that comment. I am a real estate broker in downtown Boston and was just speaking with a client of mine about the work from home trend that has been taking effect. I think it is a fantastic idea for many of these companies renting expensive office space. In my field of real estate brokerage, most of my agents work primarily from home allowing me to put 30-50 agents in a space with 10-12 desks. Saves money and the environment. Great point!
Best,
Nick Warren
www.WarrenRE.com
grammar check, STAT
"$700 mezzanine loan"?
It's not the only grammatical error in that post; there are several.
Suburban v. Urban
For a firm in the Hancock Tower, they get a few things in the deal:
1) a trophy location with a stunning view
2) central access to their client base
3) access to a wider pool of talent
4) access to other centralized service providers (like temp agencies, printers, etc.)
Most of the companies located in the Hancock tower do so for these reasons. There's a certain visibility you get from locating in a regional hub. And a breathtaking view is pretty good currency with clients.
Also, the closer towns around Boston aren't that much cheaper. Waltham can rent for as much as $40 a square foot at last check. The further out you go, the cheaper it gets, and the harder it is to find the best.
In return you have then limited yourself to workers who own cars and want to live in the suburbs (you'll find most urban dwellers can't be bothered to reverse-commute). That cuts the talent pool significantly. Personally, there's no amount you can pay me to work or live in suburbia. I've tried it and I decided that being caught in traffic all the time really depleated my quality of life. Not everyone has a white picket fence and car as part of their American dream, no matter what the Republicans try to tell you.