I take a look at the battered office market in my “Commericial Interests” column in this week’s B&T.

Looking at the grim numbers, I’m placing my money on a vacancy rate in downtown Boston that is well north of 20 percent before commercial real estate hits bottom.

Right now, it’s already over 13 percent in top-shelf towers in the Financial District and the Back Bay, and the unemployment numbers just keep on rising.

And if I had any doubts, this item on Colliers International’s first quarter numbers backs up my pessimistic hunch.

The office vacancy rate across the country is now reaching 15 percent.

Sublease space, dumped directly on the market by companies cutting payrolls, jumped by another 7.5 million square feet.

Overall, it was the worst quarter for the office market since the aftermath of the 9/11 terror attacks, Colliers notes.

That’s tough stuff.

Ah, the wonder of election year politics.

Mayor Thomas M. Menino is now backing the $400 million Ruggles Place plan, which would attempt to revive a now barren stretch of potentially valuable commercial land in Roxbury with a project that features an arts center.

Sure, there appears to be more to this proposal that I first gathered, including plans by the Whittier Street Health Center to build its own facility with federal stimulus money.

But there remain some serious issues with its viability that are now being conveniently glossed over.

I actually pointed out some of these flaws in a column for B&T last year after the Boston Redevelopment Authority, belatedly in my view, pulled the developer’s designation.

While I think the arts are great, the development team behind the project, after more than a year and a blown deadline, had been unable to produce a plan on how it would actually finance its worthy ambitions.

That decision generated a lot of political heat for both the Boston Redevelopment Authority, and more key here, the mayor, who now faces some real competition in the budding mayoral race.

The mayor is predictably winning applause from some local activists for his decision to finally back the project.

No matter there was at least one other competing plan that featured a veteran local developer and the backing of former Lakers’ great Earvin “Magic” Johnson’s investment fund.

The project is clearly a crowd pleaser. But the backers need to demonstrate how, amidst the worst downturn since the Great Depression, they are going to raise millions for an arts center.

The competition for such dollars is beyond fierce right now, with a number of proposals for museums and arts centers on or near downtown’s new Greenway also begging for dollars right now.

The future of the Hub’s skyline now appears set for the next decade or so.

Boston Properties announcement that it has lined up a $215 million construction loan for Russia Wharf is more than just as big coup for the real estate giant.

It also likely one of the last big office projects to push forward for the next few years, if not longer.

Given the battered state of the real estate market, BP’s new Russia Wharf tower is likely more than enough to satisfy any office expansion needs in downtown Boston for some time to come.

Fan Pier developer Joe Fallon’s success in nailing down its own anchor tenant is likely to soak up whatever demand remains after that.

Kudos to the hard-working development teams behind both projects, which are just as few blocks from each other on the city’s waterfront.

But, unfortunately, the success of Russia Wharf and Fan Pier is likely to take wind out of the sails of other proposed towers, including a long-planned skyscraper over South Station and John Hynes embattled plan to redevelop the Filene’s complex.

Boston Properties decision to push ahead in Boston comes after the real estate company pulled the plug on an even bigger tower in New York after its lead tenant walked.

Wellington Management will fill most of the office space in Boston Properties new Russia Wharf tower, with a deal to lease 450,000 square feet.

The troubling trend of commercial properties going belly up appears to be picking up speed.

The last few days have brought news of more towers hitting the foreclosure block, one here in Boston, the other in New York.

In Boston, 441 Stuart Street is expected to fetch $30 million when it hits the auction block on April 28. A pair of investor groups had bought the building for more than $37 million back in 2004 in hopes of converting it into condos.

Meanwhile, down in New York, real estate investor Harry Macklowe is having to give the bank the keys to the Financial Time high-rise, the U.S. headquarters for the British financial daily. Macklowe spent nearly $500 million to buy the building, only to default on his payments back in January.

In a case of monumental bad timing, Macklowe followed up this deal with a $7 billion tower shopping spree in New York back in 2007, just before the commercial real estate investment market began to shut down. He ended up having to return the properties to Blackstone Group.

This fresh spate of tower troubles comes on the heels of the blockbuster sale of the Hancock tower at a foreclosure auction late last month.

It looks like that Hancock auction was just the starting gun when it comes to this trend.

Sam Zell, the billionaire office market tycoon who went on to buy the Chicago Tribune, is far from perfect. (He even admits to making a big “mistake’’ now in buying the prestigious but troubled newspaper.) And I don’t know if he really is a genius.

But he’s one sharp guy and when he says something, it’s worth paying attention to.

Zell right now is down on commercial real estate, telling Bloomberg TV, in an interview, that office tower values are down 30 percent and that a big change in ownership – I guess we are talking foreclosures and forced sales – are on the way.
“It’s more likely the banks will either foreclose or come up with some kind of restructurings that will ultimately allow the properties to trade,” said told Bloomberg.

By contrast, Zell sees the housing market bottoming out an even reaching some sort of “equilibrium’’ by this summer.

We’ll see.

But Zell is also known to tell it as it is. I remember covering a speech he made to local executives at a downtown hotel a few years ago. It was amid the initial explosion of concern over US jobs being outsourced to India. Most business execs, even if they thought the trend could prove profitable for their firms, would have trod fairly carefully around such a hot-button topic.

Not Zell. He stood up and argued that the trend was a good one for business, even if it was costing some jobs. Not PC but very much Sam Zell.

Top Boston Properties execs raked in some big dough last year.

Edward Linde, chief executive and co-founder of the Hub-based real estate investment trust, took home $8.9 million last year, a 42 percent jump from 2007.

Linde’s pay came primarily from stock awards, with his salary growing just 4 percent, to $950,000.  His cash bonus actually dropped 6 percent, though to a none too shabby $1.9 million.

Meanwhile, media mogul and Boston Properties chairman Mortimer Zuckerman did even better, cashing in $18.7 million in stock options. That’s not including salary and bonus of $3.15 million and nearly $128,000 for a car and driver.

While it’s fashionable to take shots at executive pay, these guys have weathered more than a few market storms before and always seem to come out on top.

Even as other developers battle to keep their projects alive, Boston Properties appears to be sitting in the driver’s seat once again, with an anchor tenant – Wellington Management – locked in for its planned Russia Wharf tower.

Development in Boston can be a cutthroat business, to say the least.

All one needs to do is look at today’s Globe story, in which Fan Pier developer Joe Fallon is luring the anchor tenant away from the crippled Filene’s redevelopment.

The loss of law firm Fish & Richardson throws another major obstacle at Hub tower developer John Hynes as he struggles to get work started again on the $700 million Filene’s plan. Plans to renovate the historic store and build a new tower next door have stalled amid the financing crunch, leaving a bombed-out shell in the heart of the Downtown Crossing shopping district.

The coup couldn’t have come at a better time for Fallon. His previous Fan Pier anchor tenant, a Cambridge biotech, has had to rethink its plans and this economy isn’t generating lots of extra demand for office space right now.
But this should also be a déjà vu moment for Hynes as well. Nearly a decade ago, he pulled the rug out from under fellow tower developer Don Chiofaro in just about the same way.

Chiofaro thought he had State Street lined up to go into a new, waterfront office complex he had been planning.
But financing for new office projects was getting tougher to come by, and Chiofaro was stuck in development limbo.
Sounds familiar, huh?
Then in swooped Hynes, a veteran developer himself and a grandson of one of Boston’s best regarded mayors. Hynes cut a deal with State Street to build the financial giant a new tower near South Station, the one you can see today on the skyline with the big sign on top.
The deal made Hynes one of the hottest commodities on the office development scene in Boston, a reputation the surely helped him land the Filene’s deal, as well as a major development site overlooking South Boston’s waterfront.

Anyway, the mountain Hynes was climbing with the struggling Filene’s project just got a whole lot higher.

B&T’s Paul McMorrow’s excellent look a the Hancock tower debacle got me thinking.

McMorrow points out that the skycraper probably sold for closer to $800 million, and not the $660 million, or half price, that has been widely reported.

It certainly makes New York-based Broadway Partners, who bought the tower for $1.3 billion in 2006, look slightly less foolish, slightly being the operative word.

But it got me thinking back to the incredible real estate play made by Hub real estate mogul Alan Leventhal and his Beacon Capital Partners.

Leventhal, whose family has been a major force in Boston development, bought the Hancock tower for $910 million back in 2003.

Having covered it, I remember some industry execs even then questioning whether Leventhal and Beacon had stretched too far.

But all those doubters suddenly looked pretty foolish when Leventhal sold it to Broadway Partners for $1.3 billion in 2006.

At the time, it seemed the sky was the limit for tower values. Of course, we know now tower prices, like a lot of things over the past few years, were inflated. A year or so later, the market began to turn and the appetite for such crazy deals began to fade.

That’s all hindsight, though. All I can say is Leventhal has a pretty darn good sense of timing.

The office market is going from bad to worse.

And rising vacancy rates – and the prospect for more high-profile towers like the Hancock hitting the foreclosure block – has the federal government cooking up yet another bailout scheme.

Companies across the country dumped 25 million square feet of office space on the marketing during the first quarter, according to a recent Reis Inc. study detailed in the Wall Street Journal.

That pushed the nationwide vacancy rate past 15 percent – it could be up near 20 percent by year end, the firm projects. Rents also fell 2 percent, down to $24.16, with a growing pool of sublease space going for 10 or 15 percent below current market rates.

All of which has put commercial landlords under increasing pressure – while also raising the specter of a bust in office and retail properties that could rival what’s happened in the battered residential market.

Policy makers in Washington are watching this all, and, what else, planning for another bailout.

The Fed is hinting it may provide up to $1 trillion in credit to help refinance office towers, malls and other commercial properties in danger of default, the Christian Science Monitor recently reported.
Now how’s that for a bailout?

Just call it the the Harvard University anti-stimulus plan.

Just as the federal government ramps up to pump hundreds of millions into local road, school and other infrastructrue projects, Harvard is battening down the hatches.

The university plans to slash in half a four-year, $4 billion capital spending plan, Bloomberg reports.

That’s a whopping $500 million a year that won’t be spent on local buidling projects, mainly on Harvard’s ambitious plans to turn a rough-hewn section of Allston into a massive new campus centered around gleaming science and research complex.

That’s a lot of money that won’t get spent locally, enough to build a sizeable office tower or condo high-rise downtown each year through 2013.

Harvard is now relocating its Stem Cell Institute and other departments that were to have started making the move over to Allston to other buildings in Boston and Cambridge.

And it’s more tough news for the local development industry, with everyone from construction companies and architects to local trade unions likely to feel the pain of Harvard’s spending cuts.

It comes atop a dramatic slowdown in other development activity, with everything from new office towers in downtown Boston to suburban condo projects on hold.