November 2, 2016
Deal Watch Today

$50M recap parts Windsor office complex's clouds

PHOTO | Versant Commercial Brokerage, Inc.
PHOTO | Versant Commercial Brokerage, Inc.
Addison Corporate Center in Windsor.

Four years ago, the Addison Corporate Center in Windsor, home to several big Connecticut corporate tenants, was mired in lawsuits over millions in alleged missing rents and recriminations between ownership and tenant/investors.

Today, the 605,000-square-foot office complex at 175 Addison Road has a new sponsor, several new tenants, and a $50 million recapitalization that includes funds earmarked for extensive improvements to the property, officials say.

Versant Commercial Brokerage, based in San Diego, Calif., announced Wednesday that it assisted Addison's tenant-in-common (TIC) investors in obtaining new senior debt, mezzanine debt, and preferred equity.

Moreover, since it was brought in earlier this year to stabilize the office complex, Versant claims Addison's occupancy has risen to about 96 percent from 74 percent.

One of the new tenants, Versant said, is aeroparts supplier Triumph Group, which signed for about 88,000 square feet.

Also, existing tenant Belcan Engineering Group renewed its lease and committed to adding another 9,500 square feet to its current 65,500-square-foot Addison footprint, officials said.

In addition, engineering firm Quest Global Services, which occupied 17,323 square feet, has expanded its space by 45,777 square feet. Other Addison tenants include: General Electric, with about 220,000 square feet; and Sun Life Financial, about 100,000 square feet.

Addison's new sponsor is Virtua Partners, an affiliate of Versant. Virtua oversaw the restructuring and provided the loan guarantees and a portion of the new capital. Asset management services will be provided by another Versant affiliate, Clear Vista Management.

"This was a difficult restructuring," said Versant and Virtua principal Quinn Palomino. "Our team had to overcome numerous hurdles in order to close this transaction. We appreciate all the efforts that went into making this deal a success."

To recapitalize Addison, Versant said it originated $32 million in senior debt from Wells Fargo Bank, with another $10 million in mezzanine debt sourced from an unidentified international private equity group.

Versant said it also syndicated preferred equity totaling $7.75 million, and arranged for the purchase of approximately 23 percent of the common equity in the Addison office complex.

Landmark Capital Advisors assisted with the capital raise.

The Hartford office of commercial realty brokerage Cushman & Wakefield oversaw Addison's leasing transactions.

As previously reported, Addison at one time was seen as an attractive property, hosting such corporate tenants as Alstom Power and Ace Insurance.

However, by November 2012 the property was mired in unpaid utility, janitorial and other bills as well as fraud allegations against New York's Cabot Investment Properties, which purchased Addison in 2006 for $66.4 million.

As a result a special servicer was appointed to monitor Addison's $53 million mortgage, which at the time was past due.

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