In a move sure to be welcomed by space-starved office tenants, John Hancock Financial Services is planning to place 10 floors at its famous Back Bay tower out for lease, according to industry sources. “It’s huge,” says one Boston leasing broker. “They are going to be bringing more than a quarter-million square feet to the market.”
Citing an offering being circulated to brokers, the source says Hancock is peddling 275,000 sf throughout the 60-story tower. Along with low-rise opportunities on the third and fourth floors, Hancock is also marketing space on the 52nd and 60th floors. There is also a sizeable block of contiguous space, running from floors 26 through 30. Floorplates in the tower average just under 27,000 sf.
Hancock officials didn’t return calls to discuss the matter, but the broker notes it is just the latest example of the insurer leasing out excess space at the tower and its adjacent office building on Berkeley Street. Beginning with Investors Bank & Trust in the mid-1990s, Hancock has leased space to several firms in the wake of the company’s ongoing consolidation. Having converted to a public company earlier this year, the former mutual fund insurer is going through additional downsizing. Some observers say the activity may also be a precursor to Hancock selling the tower, although company officials have previously denied they are considering such a strategy.
Trammell Crow has been retained to market the space, which will become available between now and March 2001. Trammell broker John Barry did not return phone calls, but the source says the effort has already yielded one 10,000-sf tenant for the 60th floor. That deal is said to be in the low $60 per sf range, but the source says rates will fluctuate depending on how much space is taken and where it is located.
The opportunity comes at an interesting time for the 9.9 million-sf Back Bay market, with the 1.2% vacancy rate making it among the city’s tightest office sectors. The broker following the situation says he believes it is doubtful the Hancock space will disrupt the supply/demand balance significantly, although there are several new buildings under construction in the Back Bay.
Boston Properties has leased about 75% of its 865,000-sf office tower under construction at the nearby Prudential Center, while MDA Associates is wrapping up leasing at its 575,000-sf office tower at 10 St. James Ave. Perhaps the only new building that will come up against Hancock, according to the broker, is a 375,000-sf property that broke ground this summer. The 131 Dartmouth St. building is slated for completion in mid-2002.