A gutsy move by Boston Properties
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.