The Skyscraper That Ate a Billion Dollars

Slate ^ | Sept. 5, 2009 | Daniel Gross

[Lorianne]

Boston's Hancock Tower and the coming commercial real estate crisis. ___ [The Hancock Tower 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.

Scott Lawlor, the entrepreneur who was forced to concede control of the Hancock Tower, could be called a "poster boy for everything that went wrong," as one well-placed real estate expert put it. But the trim, straightforward executive is more like a whipping boy. For the tale of the Hancock Tower isn't a morality play or an example of a bubble-era rise and fall.

[I see my hands]

Boston’s pain in the glass.