Rebuilding its fading image

"I like the outside so much better than the inside," said Ursula Hamman, 36, a senior account administrator who works in the sixth-floor offices of State Street Corp.

The recession has only added to the building's troubles, as some of its largest tenants have opted to leave rather than pay higher rents charged by a prior landlord, leaving nearly one-sixth of the tower vacant during the worst real estate downturn in decades.

But the Hancock's new owners, Normandy Real Estate and Five Mile Capital Partners, are vowing to make an array of improvements to return the signature tower to its dominant position in the Boston market. Executives with the firms said they are exploring construction of an underground parking garage, renovations to the cafeteria and lobby, and a series of upgrades to improve air flow and energy efficiency.

"This is possibly the most important building in New England, so we're going to take our time and make sure we do what's right for the building and the city," said Raymond Trevisan, a principal with Normandy, which teamed with Five Mile to buy the Hancock in March. Normandy will have management responsibility for the building.

The partnership paid $660.6 million for the 60-story skyscraper, roughly half of the $1.3 billion plunked down by its last owner, Broadway Partners of New York, which bought it at the top of the market in late 2006. After months of struggling with a high debt load and a deteriorating office market, Broadway defaulted on some of its loans last January, and Normandy/Five Mile bought the building at a foreclosure auction.

The deal got Normandy/Five Mile one of Boston's most storied buildings, but it also left them facing a slew of challenges. During the foreclosure process, the building was unable to attract new tenants because of the uncertainty about its ownership. It is now 15 percent vacant, nearly double its vacancy average of 7.2 percent during the past 10 years, according to Reis Inc., a New York research firm.

Much of the empty space was created by the departure of the advertising firm Hill Holliday, which moved in March 2008 to 53 State St., which offers underground parking, a more expansive lobby, as well as a Cosi and an Au Bon Pain cafe.

Hill Holliday's chief executive, Michael Sheehan, said the staid Hancock no longer felt like the right place for the firm, an instinct that was confirmed when he saw the rents being charged by Broadway, the prior owner.

"They effectively wanted to double our rent," Sheehan said, declining to provide exact figures. "It was clear they paid a certain amount for the building and had to charge high rents. That just wasn't our problem."

Because Normandy/Five Mile purchased the Hancock for half its prior sale price, real estate specialists say it can be more flexible on rents, a crucial factor when trying to persuade companies to relocate in the down economy.

When the Hancock was completed in 1975, it was a monument to new Boston, designed by I.M. Pei himself. But almost immediately the gleaming tower encountered problems, with some of its mirrored glass windows crashing onto Clarendon Street.

Today, the Hancock is sturdy and sleek but showing its age. The parking garage is located half a block down Clarendon, a drawback for executives accustomed to newer buildings with underground garages. It also lacks the fancy food options of more modern towers and only offers employees a subterranean cafe with limited variety.

Despite its shortcomings, tenants say the Hancock still has cache. Its Back Bay location can't be beat, with shopping, fine dining, and the Massachusetts Turnpike at your doorstep. While insurer John Hancock has mostly moved out, the tower is still home to a roster of big-name firms, including Ernst & Young, State Street, Arrowstreet Capital, and Swiss financial giant UBS.

An executive with its newest tenant, Berkshire Partners LLC, said the firm chose the Hancock because it offered enough space, 60,000 square feet, and exudes an image of success. "Everybody is thrilled to death to be here," said Garth Greimann, the firm's chief administrative officer. "We're a money management firm, so the impression we make on visitors is important."

In recent years, the building has undergone a series of ownership changes, from John Hancock Financial Services, to Beacon Capital Partners, and then to Broadway Partners, which purchased it in a highly complex deal that involved 11 other properties across the country.

Trevisan of Normandy said life in the Hancock can only get better because the new owners are committed to the property. They're meeting with tenants and collecting comments on how to improve the building, though Normandy/Five Mile are unlikely to revive Broadway's plan for a fine dining restaurant and have no immediate plans to reopen the public observation deck, which was closed after the Sept. 11 attacks.

"We're not just going to come in here and blow smoke," Trevisan said. "We're real estate people, as opposed to financial engineers, and we view ourselves as the stewards of this asset."

Casey Ross can be reached at cross@globe.com.