If you think the commercial real estate market in Boston is reeling, just look south to the Hub’s arch nemesis.

New York, which led the nation with record shattering office tower sales and leases during the boom, is now leading the way downward as well.

During the boom years, Big Apple office towers were selling for $1,000 a square foot, or more in some cases. But now prices have plunged. And I mean really plunged.

The city’s top towers are now worth half that, with the best worth just $425 a square foot, according to one CB Richard Ellis broker quoted in a New York Times story on the meltdown in office tower prices.

Those sky-high sale prices were based on the expectation that the towers themselves would fetch rents of well over $100 a square foot.

Now those days of triple digit rents are fading fast, with New York’s battered banking and financial services sector having dumped 8 million square feet of space on the market.

Ironically, a number of deep-pocketed New York investors paid stunning prices for Boston office towers. Their brilliant game plan was to colonize the Hub with Manhattan-sized rents, to be paid for with $100 a square foot rents at top addresses like the Hancock tower.

Now the Hancock is facing foreclosure, with Broadway Partners tottering under the weight of the $1.3 billion the firm agreed to pay for the tower back in 2006. And instead of $100 a square foot rents, there’s a growing mountain of empty space in the iconic skyscraper.

So much for that New York trend.

It’s no secret the once booming investment sales market is frozen solid. The peak in Boston came in 2006, when the Hancock tower fetched well more than a $1billion.

Now that iconic skyscraper faces foreclosure.

But there are signs of what could be the early stages of a thaw – across the pond in London that is, Jones Lang LaSalle suggests in a new market report.

Commercial property values went through the roof in London during the boom. Then, back in 2007, the city’s overheated office and commercial market was one of the first globally to begin cooling down.

Now values have declined enough that London office properties are starting to look like a relative bargain to investors from Japan, the Middle East and other European countries, Jones Lang LaSalle reports.

The trend is starting to slowly filter over to the U.S., the report suggests, maybe out of a little bit of wishful thinking. There’s clearly no stampede of investors yet eager to snap up distressed office towers, either here in Boston or around the country – at least so far.

Yet help may be on the way.

A number of real estate companies have formed opportunity funds to start buying assets, presumably both in the U.S. and across the world. These funds raised $90 billion in January alone, according to Jones Lang.

OK, is this really the best time to start targeting what has been one of the brightest stars of our state’s battered economy?

That’s the question that popped into my mind after I found a press release in my inbox from IBEW 103, the powerful, Dorchester-based trade union that represents more than 7,500 local electricians.

The headline above the release just about says it all. “Massachusetts Union is Set To Challenge Big Pharma/Biotech “Fat Cats.’’’’

Our IBEW 103 has teamed up with something called the Corporate Campaign based out of New York. The duo intend to target pharmaceutical companies and biotechs over corporate welfare-style subsidies that  critics say drive up the cost of  both drugs and health care as a whole.

The campaign’s website, StopBiotechLooting. org, is replete with some nasty looking fat cats that would probably scare the wits of my five-year-old, also sheds light on which road this particular effort is taking.

So let’s dispense with the idea that this pressure campaign is aimed at saving taxpayer money.

Rather, it’s pretty clear some more down-to-earth motives are driving this union crusade.

If you haven’t guess it already, the union is steamed over the issue of which contractors and workers our local biotech and pharma companies are hiring to build new labs and offices.   After running down a list of some of the bright stars of the new economy, the union notes these alleged “fat cats’’  have not “ensured that their new facilities in Massachusetts are being built or will be built by contractors that hire Massachusetts electricians who earn wages and health benefits consistent with the community.”

That, of course, is just a long-winded way of saying the companies involved have not agreed to hire only union labor to build their new labs and offices.

The last time I checked, empty lab space was on the rise in Cambridge and the once bright biotech star was starting to fade in the tough economy.

These are surely tough times as well for local union hard hats, as the tenor of that press release surely attests.

But it’s hard to see how anyone gains by trying to bring down a key industry upon which the future of the Massachusetts economy depends.

It’s not like Bay State developers did not have enough to worry about, what with a deep downtown and a global credit crunch to contend with.

But while those concerns are very real, what’s really getting local builders worked up now are new environmental regulations by the Patrick Administration that critics say could foist billions in added costs onto the local developers and businesses.

In a bid to head off the new regs before they take effect, NAIOP Massachusetts is mounting a letter writing and phone call campaign in hopes of getting the state Department of Environmental Protection to back off.

David Begelfer, head of Massachusetts NAIOP, which represents the local development industry, said he hopes to generate thousands of phone calls, e-mails and letters to state regulators before the public comment period on the new rules ends March 8.

The new mandate requires building owners and developers to pay for expensive new paving and infrastructure every time they expand a parking lot or build a new one.

The idea is to protect the Charles and other rivers from storm water run-off from nearby surface lots, an admirable goal but potentially costly goal for hospitals, factories, and anyone else with a sizeable parking lot.

Given the huge dollars at stake, Massachusetts NAIOP is now moving ahead with plans to hold a second forum on the issue, the first one having sold out.

The group hopes to convince state regulators to first try out the new regs in a pilot program, instead of launching directly into a state-wide campaign.

“We are hoping to show this is a very serious problem and this might not be the best time to do this,’’ Begelfer said.

Second progm on that the second sold out the first one we are still tlaign

Maybe Boston will land that giant new FBI regional headquarters after all.

The federal agency has been in the real estate market now for almost as long as it is has been chasing Whitey Bulger, looking at sites in Boston and nearby suburbs on which to build a new, $100 million-plus regional headquarters/fortress.

But there are a couple of factors that could make the FBI’s dream home finally become reality.

The first is the flood of hundreds of billions of cash under President Obama’s freshly signed stimulus bill. The FBI has been in the market for a couple years now, but had been hobbled by some pretty tight financial constraints on the amount of money it could shell out for a new home.

I doubt any federal agency is going to go begging for cash now to spend, especially on building projects.

Meanwhile, Hub insiders are making moves that would seem to suggest they are betting the FBI project may be poised to move from the realm of wishful thinking to reality.

Robert Walsh, a long-time friend of Mayor Thomas Menino, and developer Dick Galvin are poised to make a run at a key Hub tract that could give them a fighting chance to build the agency’s long-planned Boston headquarters, B&T’s Paul McMorrow reports.

The pair is angling for a five acre site near Fort Point Channel that the cash strapped U.S. Postal Service just put on the market. Land, apparently, the developers hope will become the next home of the FBI’s new local headquarters.

All eyes right now are on the downtown Boston market, where rents are falling as the number of empty corporate suites swells.

In my B&T column, I write this week of fears the next owners of the Hancock tower, now facing foreclosure, will slash rents to fill up a growing mountain of empty space in the skyscraper.

But getting less attention, but possibly more vital to the Boston area’s economic health, is the lab and office market in Cambridge.

If downtown Boston is the old economy of financial services and law firm jobs, Cambridge is the capital of the new economy of biotech and tech firms, from fledging start-ups to international giants.

But the reports from the headquarters of our economic future are distressing.

In an excellent look at the state of the Cambridge lab market, B&T’s Paul McMorrow looks at how one of the hottest real estate markets in the country now has 1.2 million square feet on the market.

That’s about 17 percent, according to a recent report from commercial real estate firm Meredith & Grew.

Still, it’s not all doom and gloom, at least from the perspective of landlords. Much of the available space is either hopelessly out of date, or in new and costly research complexes.

Yet again, it’s never a good sign when new space goes begging.

Most of BioMed Realty’s 420,000 square foot, newly minted lab complex at 301 Binney now sits empty. And the real estate firm is now preparing to roll out an additional 278,000 square feet later this year at 650 East Kendall St.

When a smart guy like Doug Linde, a long-time Boston Properties executive, is stumped by the current market, then we are all in trouble.

Linde’s comments to analysts in a recent earnings conference call make for some fascinating reading. It’s a brutally honest assessment of the state of the commercial real estate market from a top player at one of the nation’s most prominent tower owners and developers.

It seems pretty clear that Boston Properties, just from its actions, is doing all it can to batten down the hatches amid the economic twister that is ripping through a broad spectrum of industries.
The real estate giant, in case you missed it, just pulled the plug on construction of a nearly $1 billion office tower in New York.

Here’s Linde on how the leasing market all but vanished during the last few tumultuous months of 2009:
“But lest we be accused of being Pollyanas, leasing activity with few exceptions has been largely non-existent in our markets during the fourth quarter and into the New Year. And I would say that in the face of having signed a 356,000 square feet of lease of Biogen and a 195,000 square feet of lease with Hunton and Williams in the fourth quarter in the late November early December.”

In fact, Boston Properties is having a difficult time simply figuring out what is a fair market rent in these changed times, let alone filling up empty office suites with new corporate tenants, Linde tells the analysts.

“With so little current activity, we have a really difficult time still with any certainty (saying) where market rents are today,’’ he tells analysts.

Now if that’s not sobering, I don’t know what is.

Usually when a Hub developer makes a “mistake,’’ it has the beneficial result of adding a few floors to the top of his tower.

I just remember the late Les Marino. The Big Dig construction magnate apparently got a little carried away with the construction of his green glassed Independence Wharf office high-rise. So much, so, in fact that it mysteriously wound up a couple floors higher than was allowed under the permit issued by state regulators.

There was a great outcry from the local activist set over the whole thing, but you can rest assured no one was going to force Marino to tear off the top of the tower.

But in Las Vegas, the developers are apparently not as shrewd as they here in Boston.

MGM Mirage and Dubia World are having top off  at a relatively measly 28 stories what was to have been a 49-story, iconic hotel.
No, they didn’t run out of money trying to make Foster + Partners stylish vision a reality. Rather, the reinforcing steel that goes inside the concrete was incorrectly installed in 15 floors of the tower.

The mistake means that the 200 or so luxury apartments that were to have topped the posh hotel tower off will now get the axe.

Well, on second thought, maybe that’s not so bad given the current real estate market.

But then there’s just the sheer humiliation of it.

A pair of competing hotels, including a 61-story tower designed by Cesar Pelli, will tower over the suddenly much shorter than planned Harmon hotel.

Boston  Properties is putting on ice construction of a nearly $1 billion Big Apple skyscraper.

And that should send chills through the struggling office market across the U.S., especially here in Boston, the real estate giant’s hometown.

Headed by media mogul Mortimer Zuckerman, Boston Properties has suspended construction on the 1 million square foot, Eighth Avenue tower after a law firm that was have been one of the anchor tenant pulled out of the deal.

Zuckerman, in a recent interview with Bloomberg TV, warned the credit crunch is not over that 2009, if anything, could wind up being worse than what many in the industry are already bracing for.

Of course, all eyes here will be watching to see what, if any, impact Boston Properties decision will have on  its Hub building plans.

Boston Properties has insisted it is still moving ahead with Russia Wharf and hopes to close a construction loan for the planned office and residential tower by the harbor in the next several weeks.

In this case, Boston Properties has an anchor tenant lined up for most of the building, Wellington Investments.

But Wellington, like many firms in the financial sector, has had its struggles, having recently announced job cuts.

At the least, Boston Properties decision shows there is no sure bet when it comes to new office development during these troubled economic times.

If the numbers don’t work, Zuckerman and his long-time business partner, Ed Linde, have made it pretty clear they have the guts to walk away.

The last recession unleashed a torrent of sublease space that wreaked havoc in downtown towers and in Rt. 128 office parks alike. In the wake of the the tech market collapse, a raft of companies dumped space directly on the market, bypassing building owners and landlords.

The numbers were not always picked up by commercial real estate firms in their market reviews, often preferring to crunch vacancy numbers by looking at space put directly on the market by tower owners. This might have looked good on paper, but it failed to take into account how bad market conditions had become.

At one point more than 12 million square feet of sublease space was clogging the Boston market in the tough first few years after the 2001 recession. That’s enough for a dozen Prudential towers.

Well sublease space is back, and this time, the commercial real estate industry is taking notice. Jones Lang LaSalle, in its just released fourth-quarter report on the Boston and U.S. office market, devotes a fair amount of ink to the issue,

Sublease space in Boston jumped by half a million square feet during the fourth quarter, the firm reports, bringing the total amount on the market to 4.5 million. Still a far cry from that 12 million square feet of sublease space that flooded the market during the last downturn, but still moving in the wrong direction,

Overall, Jones Lang LaSalle forecasts rising office vacancy rates  across the U.S. right into 2010, when it sees the amount of empty office space peaking at 18 to 20 percent.

And that’s with sublease space included.