A Tale of Two Towers

You may not have heard of The John Hancock Mutual Life Insurance Company—but you probably know their real estate. By Aaron Lovell.

In 2003, John Hancock Financial Services was acquired by Canada-based Manulife Financial. By then, the company, founded in 1847 as The John Hancock Mutual Life Insurance Company, had changed the skylines of two large US cities with their landmark, eponymous buildings: the John Hancock Center in Chicago and the John Hancock Tower in Boston.

But like many large corporations with property-heavy balance sheets, the company began to shed its real estate assets in the late 1990s, a process that continued after its 2000 public offering.

Both of the famous buildings were acquired by private equity real estate firms: the Chicago building was sold to Shorenstein Properties in 1998, while the Boston building was acquired by Beacon Capital Partners in 2002. And, in a bizarre twist, both could be up on the block again in the near future.  

The John Hancock Center, an iconic building located on Chicago’s Michigan Avenue, could be put up for sale, according to its current owner, San Francisco-based Shorenstein. The property company has reportedly received offers to turn part of the 100-story mixed-use building into a hotel.

Some have noted that, while there are vacancies in the building’s office space, the Hancock stills sees strong revenues from retail rents, as well as parking and antennae usage. Because of this, Crain’s Chicago Business reported that the sale price could be as high as $350 million (€276 million).

Shorenstein paid $220 million for the building in 1998, when the insurance company began divesting its real estate assets. Built in 1970, the Hancock has 888,500 square feet of office space, 152,900 square feet of retail shops, a 23,900 square-foot observation deck, 34,300 square feet of broadcasting facilities, parking for 716 cars and 49 floors of condominiums.

After its late-1990s selling spree, the insurance company held onto around 50 properties, including its headquarters, the John Hancock Tower in Boston.

The company went public in 2000 and, in 2003, sold its headquarters for $910 million to Boston-based Beacon, who beat out national players like Tishman Speyer and Sam Zell’s Equity Office. The insurance company leased back the 20 percent of the complex it occupied.  

This week, Beacon announced it is now looking to sell the building as part of a 10-building portfolio that includes additional real estate in Boston, as well as property in Washington, D.C., Los Angeles and Denver.

Completed in 1976, the I.M. Pei-designed tower is the tallest in New England at 60 stories. Located on Clarendon Street in the Back Bay section of Boston, the tower includes two additional office buildings and a 2,000-car parking deck. Together the complex has more than 3 million square feet of space and could reportedly bring in as much as $1.3 billion.