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BOSTON-The Hancock Tower, which has lost half of its value over the last two years, may be a harbinger of things to come, theorizes Newsweek. The 62-story trophy was purchased for $1.3 billion, but now finds itself valued at roughly $700 million, after a series of owners and a loan default.

The advent of opportunity funds and lower interest rates, led to less money down on buildings, taking non-conservative loans in an effort to grab up property while the getting was good. Pointing to a dissatisfaction, in owning a property for a long term with minimal returns, many buyers began flipping properties at inflated prices, much like the housing market. This kind of model cannot go on ad infinitum and eventually the debt comes due.

To read the entire Newsweek article click here.

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