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With the value of Hartford’s tallest skyscraper plummeting and its owner allegedly unable to keep up with expenses, the trustee for City Place I’s debt holders is asking a Hartford Superior Court judge to appoint a receiver to take control.
Boston-based real estate company Paradigm Properties paid $113.2 million for the roughly 885,000-square-foot, 38-story office building at 185 Asylum St. in downtown Hartford about a decade ago.
At the time of the purchase, Paradigm borrowed $79.27 million through Wells Fargo, securing the funds with a mortgage and other commitments on the building. Those loans have been sold to investors, with Wilmington Trust as trustee.
In a Dec. 30 court complaint, Wilmington’s attorney — Christopher Desiderio, of Providence-based Nixon Peabody LLP — wrote City Place I’s owner, a limited liability company tied to Paradigm, acknowledges it is unable to pay its debts and has agreed to the appointment of a receiver.
Desiderio requested the court appoint Lewis Taulbee, of Jones Lang LaSalle Americas Inc., as receiver.
Attempts to reach a Paradigm representative were not successful.
Downtown Hartford’s office market, like that in much of the country, has been hit hard by the COVID-19 pandemic and its aftermath, which ushered in wider acceptance of remote work. That led major office tenants to slash their leased spaces, spiking vacancy rates.
There have been clear signs of trouble for City Place I.
Commercial real estate tracking firm Trepp – which receives monthly reports from trustees of securitized mortgages – recently reported City Place I’s appraised value had fallen from $114.5 million in 2015 to $64 million. That put its worth below the $79.3 million owed on the 2015 loans.
The loans, according to Trepp, were already in special servicing. This happens when commercial mortgage-backed security loans are troubled and in need of some sort of workout.
City Place I suffered a deep blow in 2023, when UnitedHealthcare decided to slash the 350,000 square feet it leased in the building to around 57,000 square feet, according to sources familiar with the deal.
City Place I is one of several major downtown Hartford office buildings with financial struggles that are playing out in court. The Metro Center at 350 Church St. (293,639 square feet); the Stilts Building at 20 Church St. (419,600 square feet); and much of the Constitution Plaza office complex are in foreclosure proceedings.
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