November 27, 2012
Deal Watch Today

Hartford's Metro Center for bid at $80 a sq. ft.

HBJ Photo/Greg Bordonaro
HBJ Photo/Greg Bordonaro
Downtown Hartford's Metro Center is on the sales block.

Hartford's foreclosed Metro Center office building is officially on the sales block, months after the Class A downtown tower re-signed anchor tenant Lincoln Financial Group to a long-term lease.

The 12-story, 293,639-square-foot building erected in 1986 on downtown's northern fringe, is currently owned by CWCapital.

The building was put up for sale within the last two weeks, according to the broker marketing the property. CWCapital took control of the property last year after the building's previous owner, Northland Investment Corp., lost Metro Center to foreclosure.

While no firm asking price has been set, the owners will be looking for bids close to the $23.5 million, or $80 per square foot range, said Thomas Dobrowski, the managing director of New York's Rockwood Real Estate Advisors, which was recently hired to handle the sale of the building.

Cushman & Wakefield broker Joel Grieco is also involved with the sale of the property.

Dobrowski said the building is currently 83 percent leased to two tenants: Lincoln Financial Group, which last July renewed its lease on 60 percent of the building for an extra five years; and the Connecticut Business & Industry Association, which occupies about 40,000 square feet.

The rest -- about 50,000 square feet on the top two floors – is empty.

About 60 investors have shown interest in the property, Dobrowski said.

Metro Center was previously owned by Northland Investment Corp. before Massachusetts developer Larry Gottesdiener lost the property to foreclosure in 2011 to settle a $25 million mortgage.

The building went on the block for a short period after the seizure, but was taken off while Lincoln analyzed its future office needs. The "for sale" sign had been expected to be rehung once Lincoln finalized its lease extension.

Northland Investment Corp. bought Metro Center for $10 million in 1997, a significant discount for a building that was built in 1986 for $57 million. At its peak, the building sold for $84 million in the late 1980s.

One of the building's key perks is its attached parking garage, with more than 1,200 spaces. Parking is always a significant issue for companies looking to do business downtown, particularly for employers with a larger workforce. Metro Center's attached garage gives it an advantage in the market.

Demand is uncertain for a Class A tower in downtown Hartford because there have been few recent sales of large office buildings. The downtown office vacancy rate also remains high, hovering near 30 percent.

The only recent significant deal was the sale earlier this year of the 38-story CityPlace I office tower to Commonwealth REIT, which paid $101.5 million, or about $117 a square foot.

But CityPlace I was nearly 100 percent leased at the time of the deal, and had major Fortune 500 tenants — including UnitedHealthcare — locked up in long term deals.

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