April 23, 2012 | last updated June 1, 2012 2:00 pm

Lincoln Financial shops for space

For years, downtown Hartford landlords have competed fiercely to steal away tenants from opposing office towers.

The competition has ratcheted up more recently, especially with high office vacancy rates in the central business district and a lack of new employers coming into the city.

Now, a new fight is brewing as a major downtown Hartford employer begins its search for a potential new home.

Lincoln Financial Group, whose current lease at Metro Center expires in 2013, has put out a request for proposals asking for offers from downtown Hartford landlords with 180,000 square feet of available space.

The financial services company has already been looking at several properties, sources say, including Connecticut River Plaza and 55 Farmington Ave., which the Hartford Financial Services Group recently put on the sales block.

Lincoln joins the State of Connecticut as the second significant tenant looking for office space downtown, and the decisions made by the two organizations will have major implications for the commercial real estate market in the central business district.

Lincoln Financial officials confirmed that they are weighing their real estate options, but they are providing few other details. Their plans, however, appear to have them staying in the Capital City.

"Lincoln Financial is committed to maintaining our Hartford presence," said Jay Russo, a Lincoln spokesman. "As the RFP process is ongoing, however, there are no other details that we can share at this time."

Unlike many other tenants in recent years, Lincoln doesn't plan to shed much space even if it decides to relocate to another location within the city.

The RFP says Lincoln is searching for 180,000 square feet of office space. Currently the company occupies about 190,000 square feet in Metro Center. That's good news for Hartford because Lincoln's ultimate decision likely won't negatively impact the city's office vacancy rate or reduce jobs.

Meanwhile, the stakes are high for the Metro Center, which is owned by a special servicer after it foreclosed on the property in 2011.

The 12-story, 290,000-square-foot tower on Church Street was put on the sales block last April, but no deal has come to fruition because of the uncertainty surrounding Lincoln's future.

Lincoln occupies more than 60 percent of the building, so if the company moved to another location, Metro Center would lose a majority of its revenue base. That has made the property a much more difficult sell, particularly in a weak office leasing market, because bankers will view any deal as too risky.

That is giving Lincoln Financial significant bargaining power in its negotiations for a lease renewal. By looking at other potential properties, the company is just enhancing its leverage.

But the Metro Center owners, sources say, are being aggressive in their efforts to keep Lincoln as a tenant, and the most likely scenario is that Lincoln stays put, sources say.

The Connecticut Business & Industry Association takes up about 40,000 square feet of space in the building, while about 52,000 square feet remains vacant.

Even if Lincoln finds a better deal in another location, the costs to relocate and build out new space may not be attractive, sources say.

Parking is also a significant issue. Metro Center has an attached parking garage with over 1,200 spaces, giving it an advantage in the market.

Lincoln Financial Group came to downtown Hartford 14 years ago after the Pennsylvania-based company bought its life insurance business from Cigna Corp. Originally, that business resided in Bloomfield, but Lincoln moved those operations to Hartford's Metro Center in 1998.

Lincoln's decision to come to Hartford was met with great fanfare by city and state leaders at the time.


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