As if more proof were needed that the lending environment is hammering even top-of-the-line development, project backers in Boston and Philadelphia have acknowledged that the capital markets crisis is forcing them to put some of those cities\u2019 showcase projects on hold. The developers of the $700 million mixed-use redevelopment of the Filene\u2019s department store site in Downtown Boston are calling a time-out on construction because they have been unable to secure the necessary debt. As reported late Thursday by the Boston Business Journal\u2019s Michelle Hillman, the project\u2019s lead developer, John Hynes III, confirmed the delay during a panel discussion at Boston College. The publication has said previously that Hynes was able to assemble all but $50 million of the $400 million in debt necessary to keep building. Lenders were reluctant to fill the financing gap even though 25 percent of the project\u2019s office space and three quarters of the retail space are pre-leased. That might delay completion of one of Boston\u2019s premier projects, formally known as One Franklin Street. Plans call for 150,000 square feet of retail, a 250-key hotel, 500,000 square feet of office space and 125 condominiums. Hynes, who is developing the project with Vornado Realty Trust, could not be reached for comment by deadline. However, Hynes told CPN last spring that Filene\u2019s Basement is expected to occupy the site in March 2009 and the entire project is expected to wrap by March 2011. \u201cIt\u2019s more a factor of the greater capital environment and the type of risk and return that capital needs than a story about Boston,\u201d said Rick Cleveland, director of research for Cushman & Wakefield Inc.\u2019s greater Boston office. He noted that although development capital is hard to come by, lenders are still selectively making financing available for big-ticket transactions in Boston. In a deal that became public last month, Kennedy Associates Real Estate Counsel L.P. paid Verizon Communications Inc. $192 million for 185 Franklin Street, a 22-story, 700,000-square-foot office tower in the city\u2019s Financial District. Cleveland said he expects that the project will eventually go forward because demand will be there in the long run. \u201cBoston is going to be very undersupplied (with office space) when we come out of this thing,\u201d he said. At about 7 percent, vacancy in the city\u2019s Central Business District is the lowest of any CBD in the country. And the credit crisis is stalling a premiere office project in another major East Coast city. Brandywine Realty Trust will bide its time before starting work on Cira Centre South (pictured), a $755 million, 730,000-square-foot project slated to go up in Philadelphia\u2019s University City. Brandywine CEO Gerard Sweeney offered the update yesterday during the company\u2019s third-quarter earnings call. Cira Centre South would be the first office tower to start construction in Philadelphia since 2005, when the 1.3 million-square-foot Comcast Center got under way.<\/p>\n","protected":false},"excerpt":{"rendered":"
As if more proof were needed that the lending environment is hammering even top-of-the-line development, project backers in Boston and Philadelphia have acknowledged that the capital markets crisis is forcing them to put some of those cities\u2019 showcase projects on hold. The developers of the $700 million mixed-use redevelopment of the Filene\u2019s department store site…<\/p>\n","protected":false},"author":1314,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[37301],"tags":[],"class_list":["post-1003888625","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"acf":[],"yoast_head":"\n