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August 12, 2022

Major downtown Hartford employers shedding hundreds of thousands of sq. ft. of office space

COSTAR CityPlace I will see its largest tenant, UnitedHealthcare, shed a significant portion of its space.
By Greg Bordonaro

In a sign of more troubles for downtown Hartford’s office market, two major center city employers are planning to shed hundreds of thousands of square feet of office space in the year ahead as they embrace remote work coming out of the pandemic.

Insurers UnitedHealthcare and Prudential Financial recently finalized deals to significantly scale back their office footprints in Hartford, the Hartford Business Journal has learned.

UnitedHealthcare is downsizing from its current approximately 350,000-square-foot office footprint in CityPlace I to around 57,000 square feet of space on two floors, according to sources familiar with the deal. 

That new five-year lease agreement goes into effect in September 2023, sources said. A little over a decade ago, UnitedHealthcare occupied 450,000 square feet in the building spread over 18 floors. The company’s signage adorns the top of the 38-story property, which is also known as the UnitedHealthcare Center. 

Prudential Financial currently occupies 250,000 square feet at the 280 Trumbull St. office tower, but is reducing its footprint to around 25,000 square feet on one floor, the company confirmed to HBJ. 

That move is being driven by the company’s adoption of a hybrid work environment and also a major business deal it completed earlier this year. In April, Prudential sold its retirement business, which had a major Hartford presence, to Colorado-based Empower Retirement. As a result of shedding that business, Prudential needs much less space downtown, a company spokesman said.

Empower is taking one of the floors Prudential is vacating, a source told HBJ. 

In a statement, Mayor Luke Bronin told HBJ: “These are the powerful pandemic aftershocks, and they are hitting hard. Hartford’s commercial office buildings offer great value compared to other markets, so I think there will be opportunity for us over time, as companies around the country rethink their footprint. But there’s no question we’re facing a massive disruption in the office market, and that means we have to be all the more aggressive in accelerating residential development and supporting downtown retail, restaurants, sports, entertainment, arts and culture.”

280 Trumbull St., downtown Hartford.

The downsizings are occurring after Travelers Cos. last September confirmed to HBJ its plans to cede about 150,000 square feet of leased space in the city, in an effort to consolidate employees into buildings it owns downtown. 

Law firm Robinson+Cole recently announced that next September it will also be moving out of 280 Trumbull St., where it has been based for four decades, and into the historic Hartford Steam Boiler Building at One State St. As part of the move, Robinson+Cole will be reducing its footprint from about 120,000 square feet on six floors to 75,000 square feet on five top floors at State Street. 

Also, earlier this week, HBJ reported that the city’s largest downtown landlord, Shelbourne Global Solutions, was facing foreclosure on one of its Class A office towers at 20 Church St., — better known as the Stilts Building — as it faces higher vacancies.

The downtown Hartford office market has taken a hit over the last few years as more employers embrace remote work coming out of the pandemic. Class A office buildings in downtown Hartford had a 20.1% vacancy rate at the end of the first quarter, according to CBRE. The overall office vacancy rate in downtown Hartford at the end of March was 17.9%, but that number is likely to significantly grow. 

For UnitedHealthcare, the downsizing is coming a little more than a decade after it spent $35 million renovating its expanded footprint in CityPlace I, which at the time was home to about 2,100 workers. 

In all, the insurer in 2010 renovated 18 floors and nearly 450,000 square feet of space in CityPlace. Some of that space was previously occupied by MetLife, which moved its Greater Hartford operations to Bloomfield. UnitedHealthcare gave back some of that 450,000 square feet prior to the most recent downsizing. 
 

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