This is a once in a generation event.

I mean, who would have ever thought the Hancock tower would sell for half price – at a foreclosure auction as well.

But that’s just what happened today, when lender Normandy Real Estate Partners and Five Mile Capital walked away from a foreclosure auction in New York with a deed to the tower for $661 million.

That’s just about half the $1.3 billion that New York-based Broadway Partners shelled out for the iconic tower back in 2006.

Now the big test comes as Normandy takes control of the tower, which has sizeable and growing amount of empty office space.

Other downtown office tower owners are surely watching nervously and hoping the Hancock’s new owners won’t slash rents in a bid to fill up all that empty space.

I wrote about that in a recent B&T column.

Meanwhile, Normandy and Five Mile have their work cut out for them amid one of the worst downturns in generations.

If they can hang on, this might prove to be the deal of the century five or ten years from now.

But getting there will be the real test.

If you think the residential market bust has wreaked havoc on the economy, just wait until you see the commercial real estate version.

That seems to be the gist of billionaire investor George Soros’ rather scary warning that commercial real estate values, from office towers to suburban office parks, will plunge 30 percent in value. If you thought the banking system was having problems now, just see how they deal with this lump of coal.

“Commercial real estate has not yet fallen in value,” Soros is quoted as saying in a Bloomberg story. “It is inevitable, it is written, everybody knows it, there are already some transactions which reflect and anticipate it, so we know, they will drop at least 30 percent.”

It’s an observation that we can already see playing out in the Boston market, with the Hancock tower poised to hit the block in a foreclosure auction next week.

The only good thing is the commercial property bust is now in its early stages, while the housing market shows signs it may be finally nearing the bottom.

At the least, maybe we can get a short breather between the two.

The $700 million redevelopment of the Filene’s complex is clearly a huge mess.

The project, which was to have renovated the turn-of-the-century department story and put up a skyscraper up next to it, has stalled, leaving a bombed out block in the heart of already struggling Downtown Crossing.

Given the problems, it’s natural that everyone is going to take a look at what went wrong.

The Globe takes a crack at it in Thursday’s edition, building a case that City Hall rushed through key approvals and left some paperwork unfinished to get the project into construction.

That may be so, but it also makes you wonder. The would-be developers, a partnership between local tower builder John Hynes and retail development giant Vornado, first submitted their plans to City Hall back in the fall of 2006.  But it took a whole year to get even preliminary approval, with work not starting until months later.

In the meantime, the business world and credit markets steadily deteriorated.

If this was a rush job, I can just imagine what happens when city officials decide they really need to slow a developer down.

If anything, this highlights the problems more than one developer has faced trying to slog through Boston’s at-times cumbersome development review process.

It can take years for a major development project to get all its approvals – or in the case of an alleged rush-job like Filene’s, more than a year. And as the developer cools his heels, the economic sands can easily shift under his feet.

It’s happened before. The billionaire Pritzker family had hoped to start building a new neighborhood on Fan Pier back in 2000, only to get caught in a morass of city and state red tape. The project finally won all its approvals in mid 2001, but by then the economy had turned and it was too late.

The result was a lost decade for Fan Pier.

Let’s not hope we have to wait another ten years to see work start again on the Filene’s project.

Developers are great copy cats. One guy builds a new luxury condo project, does well, and suddenly he has ten

competitors following in his wake.

It is a behavior pattern that has its limitations, of course, especially if you are the tenth guy to build in a

particular market.

But I don’t expect, even with this downturn, for developers to start changing their stripes.

With the market for new condos in cinders and the demand for new office towers all but nonexistent, the question now

is what area will the next big surge come in?

My money, right now anyway, is rental housing. The collapse of the home and condo markets has created a whole bunch of

new renters, whether they like it or not.

And there are already signs that developers are picking up on this trend.

Developer Richard Galvin wants to spare a couple of Fort Point warehouses and convert them into apartments and artist studios.

studios.

The previous owner, Beacon Capital Partners, had proposed luxury condos.

Expect to see many more such shifts form condos to rentals over the next few years.

Now here’s the way to spur development during the downturn.

While other states and cities roll out tax breaks to spur new development, Waltham’s mayor has different ideas on what’s needed in this economy.

Want to build a new office building along Rt. 128? Well Waltham Mayor Jeannette McCarthy wants you to pay up. And pay big as well.

McCarthy’s proposal calls for developers to shell out 6 percent of the development cost of their projects as a kind of toll for the use of city roads, sewers and water. Given it doesn’t take much these days to get to $100 million when you are building a new office complex, that could mean a bill of as much as $6 million for some developers.

A portion of that, or about $1 million on a $100 million project, would go to compensate city departments for the time spent reviewing a proposal.

Mayor Thomas M.  Menino recently unveiled a plan to prevent firms from fleeting downtown Boston for the suburbs.

But with help from such measures as Waltham’s new development tax, the Hub need not lose much sleep.

I guess office condos aren’t selling any better than residential ones.

It seemed like a good idea at the time. With office rents soaring downtown, small law firms and the like could take control of their destiny and buy their own office condos.

Goodbye rapacious landlord, hello office ownership.

But it didn’t turn out like that for Florida-based Bayview Financial, the developer who bought and renovated 185 Devonshire St. with hopes of making a goldmine.

After buying the building in 2005 near the peak of the boom, Bayview wound up only selling about a quarter of the office units in the building.

Now there’s new owner, Boston-based Suffolk Devonshire, and a new plan.

Price cuts up to 50 percent and 10-percent down financing, which, in today’s tough lending market, represents a significant break.

Or, if you don’t want to buy now, you can always lease.

The developer is offering free rent through the end of the year.

Who says there aren’t killer opportunities during downturns, even one as bad as this one is shaping up to be?

These are the times that fortunes are made, when bargain hunters who managed to stockpile cash will swoop in to buy at deep discounts office buildings others foolishly overpaid for during the boom.

The vast ocean of foreclosed homes across the country looks like it is finally getting some company, with the number of distressed office buildings soaring across the country.

The number of office buildings that are 40 percent leased or less soared by 8.6 percent over the past year, according to a new report by the CoStar Group.

There are now nearly 20,000 distressed office buildings in the nation’s 50 largest office markets.

Boston is no exception, seeing a 2.7 percent increase in troubled office properties over the past year. Currently 4.7 percent of the Hub’s office market has fallen into the distressed category, the report finds.

Those numbers are likely to rise here in the Hub – just watch as the Hancock foreclosure drama plays out.

In the meantime, there are probably even better buying opportunities in hard-hit Sunbelt cities, where the number of distressed office buildings is now topping 10 percent.

Mayor Thomas M. Menino typically rolls out his latest big idea at the annual Boston Municipal Finance Bureau luncheon.

But with the economy crashing down all around us, 1,000 foot towers and other headline grabbers were not on the menu this year.

In a sign of the times, the mayor talked about a very different type of plan, a defensive effort to halt companies from fleeing Boston for lower cost suburban offices.

Sounds great. In fact, it would have been better three years ago, as companies first began eyeing the exits from the downtown market as rents soared.

Better late than never, I guess.

But city officials better work on their game plan. The idea, as outlined by the mayor, is to meet with every single company whose lease is expiring.

A good start, but city officials better have compelling message to deliver as well.

I mean, if the message is we love you and want you to stay, if I run a company and rent space downtown, and I am looking at the choice between cutting employees or moving to cheaper space in Woburn, that just won’t cut it.

But the comments of one BRA official make me wonder whether it’s just this feel-good message that City Hall thinks will do the trick.

“One of the reasons companies say they leave is often that no one asked them to stay,” Brenda McKenzie, the economic development director of the Boston Redevelopment Authority, is quoted as saying in a B&T story on the event. “We’re going to ask them to stay.”

Well, good luck with that.

Developers can certainly be a colorful bunch. As a long-time business writer, I can say getting a chance to follow the Donald Trumps of the world makes the field a fun one to write about.

But couldn’t disgraced former New York Elliott Spitzer have picked a different field to make his comeback in?

Colorful is one thing, but sleazy is quite another.

I doubt you missed the news, but to recap, Spitzer is looking to make a comeback, not in politics, but rather as an investor in commercial real estate.

He starts on third base in this case, helping out with the purchase by his father’s firm of a $180 million office building in Washington, D.C. Of course, it also has to be just a few blocks from the now infamous Mayflower Hotel where Spitzer’s call-girl dalliances finally succeeded in wrecking his once-promising political career.

Let’s hope Boston is not the next city Spitzer’s comeback tour. Still, the fact that he former governor’s first conquest in commercial real estate comes at the expense of Broadway Partners is not a good sign in that regard.
The beleaguered New York firm has sold a number of properties in the Hub.

Of course, there may be any number of tempting targets in downtown Boston beyond Broadway’s portfolio for Spitzer and his dad to look at.

Stay tuned.

What are these guys thinking?

That was my first reaction when I read of Ted Raymond’s $2.2 billion twin tower proposal near Government Center and Don Chiofaro’s equally ambitious plan to build this own pair of highrises next to the new Greenway.

Both plans would dynamite ugly, monolothic parking garages. But both are hopelessly ambitious at a time you can’t get a loan to build a Rt. 128 office building, let along some new, multibillion-dollar development in downtown Boston.

It’s funny how as the economy goes from bad to worse, the proposals for new projects become ever grander.

Yet there may be a method behind all this seeming madness.

Neither project is gonig to get built in the next year or two. In fact, we are probably looking at years here.

But if you want to extract concessions from harried, cash-strapped city officials, what better time to push the limits when it comes to plans for a new skyrise complex.

In fact, it is well-developed, time-tested strategy, according to one local real estate executive I chatted with recently.

When times are flush and the docket of the Boston Redevelopment Authority is brimming with new proposals, city officials tend to feel like there’s an embarrasment of riches. If you won’t play by our rules, well fine, there’s another developer with big plans ready to take your place.

But when the chips are down, well that’s the time to really push and get all you can get, apparently.