CBRE/Lynch Murphy Walsh Advisors has been selected as the leasing agent for the 62-story John Hancock Tower (pictured), as well as 200 Berkeley St. and 197 Clarendon St. in Boston.
Talk about hitting the ground running. Still in its infancy, Boston’s newest commercial real estate brokerage outfit has already nailed a landmark leasing contract in the Hub’s Back Bay, with CBRE/Lynch Murphy Walsh Advisors being retained to market the John Hancock Tower and other office properties purchased earlier this year by Beacon Capital Partners. Totaling just under 3 million square feet, the package includes the 62-story glass tower, plus 200 Berkeley St. and 197 Clarendon St.
“That’s a great assignment for them,” said one Boston broker familiar with the selection. “I’m sure they are extremely excited about it.”
The naming of CBRE/Lynch Murphy Walsh Advisors comes at the expense of Trammell Crow Co., which for several years had handled the Back Bay assets for the previous owners, John Hancock Financial Services. Meanwhile, Trammell Crow is also rumored to be in jeopardy of losing its grip on leasing 33 Arch St., a new office tower under construction in downtown Boston. One potential replacement, according to sources, may be CB Richard Ellis/Whittier Partners, which reportedly is also discussing a move of its headquarters to 33 Arch St.
CBRE/Lynch Murphy Walsh Advisors is a new group spawned by the national merger of CB Richard Ellis with Insignia/ESG, a union now entering its final stages. While most of Insignia/ESG’s Boston office is moving over to directly join CB’s local arm, five key principals have taken a different route and formed a special entity that will have a separate office and service its own clients, but still be affiliated with CB/Whittier. The quintet includes Stephen Murphy, Gregory Lucas, Thomas Walsh, Timothy Halloran and Stephen Lynch.
Calls to CBRE/Lynch Murphy Walsh Advisors and Trammell Crow Co. officials were not returned by Banker & Tradesman’s press dealine, while Beacon Capital Partners declined comment. Some sources claimed the arms-length affiliation with CBRE/Lynch Murphy Walsh Advisors helped mollify Beacon’s supposed concern that CB/Whittier already represented too much of the leasing pie in the Back Bay. Now Boston’s biggest full-service real estate services firm, CB/Whittier already is listing agent for Hancock competitors Copley Place and 131 Dartmouth St.
Arch Rivals
While he did not respond to the Hancock developments, CB/Whittier Co-Managing Partner Andrew Hoar downplayed reports that his firm may be moving to 33 Arch St. and/or picking up the leasing job for the 600,000-square-foot property. “There are no such agreements either for the leasing of the building, or for us to relocate to the building and lease space at this time,” Hoar said, adding, “this is clearly a rumor that is inaccurate at this time.”
Hoar acknowledged hearing such rumors, relaying one theory that the firm would be taking an estimated 35,000 square feet at 33 Arch St. The company has been headquartered at Boston’s Federal Reserve Building (600 Atlantic Ave.) since 1997, occupying the 22nd floor. It also has space at 155 Federal St.
Although some reports initially suggested the merger with Insignia/ESG would result in substantial layoffs at CB/Whittier, that has not proven to be the case. One source said more space is needed at the headquarters, explaining that CB/Whittier is looking at a bifurcated setup in the near term, with some offices likely to be run out of Insignia/ESG’s home at 111 Huntington Ave. in Boston’s Prudential Center complex.
Efforts to contact Congress Group Ventures principal Dean Stratouly regarding 33 Arch St. were unsuccessful. The local developer is building the office tower in partnership with Lend Lease Real Estate Investments. In any event, one source insisted that Congress Group and CB/Whittier are in active negotiations on both issues, estimating there is a “90 percent chance” CB/Whittier will ultimately take up occupancy in the tower and assume the leasing position.
“I don’t think it is [a done deal], but I think it is a serious option being looked at,” said the source, who requested anonymity. It does appear there would be time remaining on CB/Whittier’s lease at 600 Atlantic Ave., however, with that pact said to have been a 10-year agreement. The 33 Arch St. tower is slated to open next spring.
Although 33 Arch St. has struggled to find an anchor tenant, most observers spoken with blame dour market conditions for the lack of progress rather than problems attributable to Trammell Crow’s approach. The firm has dedicated some of its top brokers to the project, including principals Robert M. DeLaney and Charles S. “Chuck” O’Connor, and has an elaborate information center overlooking the site of the 31-story tower.
Since breaking ground in June 2001, the developers of 33 Arch St. have seen a glut of sublease space surging into Boston, while landlords in existing buildings have moved aggressively to keep in-house tenants from relocating, as in the case of Goulston & Storrs remaining at its longtime home at 400 Atlantic Ave. That has made it difficult for 33 Arch St. to compete on pricing, a quandary compounded by a lack of large anchor tenants in the Boston market at present. Three potential targets, accounting giant PricewaterhouseCoopers, Lexington Insurance and the Nixon Peabody law firm have all secured long-term deals in the Hub’s Financial District, leaving a dearth of six-figure requirements in the city midway through 2003.
