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The Hartford Selling Tower

By Greg Bordonaro

April 23, 2012

As The Hartford Financial Services Group goes through a major restructuring, the company is pushing forward with a further consolidation of its Connecticut real estate holdings.

The Hartford has put up for sale one of its major office buildings in the Capital City.

The company is shopping its 12-story office tower at 55 Farmington Ave., located on the outskirts of the central business district and across the street from The Hartford's headquarters on Asylum Hill.

Spokesman Thomas Hambrick said the company is exploring a potential sale as part of "ongoing efforts to consolidate our footprint."

Hambrick wouldn't disclose an asking price or how many employees work in the building, but he said it houses several divisions, including Hartford Investment Management, commercial market and claims employees, as well as some corporate functions.

It's not exactly clear what the company's strategy is for the building. Hambrick said it is too early in the process to tell, but it could involve a sales and lease back deal, or the company could sell the property and vacate the building entirely.

Leasing the building to another company may also be a possibility, realty sources say.

"Any transaction would take many months to complete," Hambrick said. "There is no immediate impact to The Hartford's employees that work in the building."

The potential sale comes at a time of heightened sensitivity over The Hartford's future in Connecticut.

The state is waiting with bated breath as its largest insurance company goes through a major restructuring that will include the financial services giant exiting its annuities business and selling its individual life-insurance and retirement plans businesses.

The Hartford is also selling its Woodbury Financial Services brokerage as it shifts its focus to its core, more stable property-casualty, group benefits and mutual funds divisions.

Hambrick said the potential sale of 55 Farmington Ave. is not directly related to the selling off of those business lines. In fact, employees working in that building are in divisions The Hartford plans to retain and if a sale does occur they could relocate to another Hartford office.

Still, plenty of questions remain about the company's future. The Hartford is a major taxpayer, employer and property holder in the state, but has been in cost cutting mode since its near collapse in 2008, when investment losses wreaked havoc on its finances.

Hartford Financial spokesman David Snowden said it's too early to know the impact from any potential sale, but the company's goal is to "find a buyer for those businesses and their teams, and redeploy employees within The Hartford."

"We are committed to the city of Hartford and the state of Connecticut, and will continue to be a significant employer in the region," Snowden said.

Even still, more job losses are likely in store for the company's 10,000 or so employees in central Connecticut.

The real estate impact has already been significant.

The potential sale of 55 Farmington Ave. comes less than a year after the company announced plans to exit 230,000 square feet of leased space in Southington and Farmington.

Hambrick said employees have already moved out of their Farmington space at 8 Farm Springs Rd. Meanwhile, employees have begun to relocate from 122,000 square feet of leased space at 400 Executive Blvd. in Southington. That lease is set to expire in September.

All those workers are being transferred to the company's offices in Simsbury, Windsor or Hartford.

According to The Hartford's 2011 annual report, the company owns about 2.6 million square feet of office space in Greater Hartford. Nationally and internationally, it leases about 3.2 million square feet of office space.

By far, the company's largest footprint is in Hartford, where it owns at least eight pieces of property, city records show, including office buildings and parking lots and garages. According to the city's 2010 grand list, The Hartford had $130.2 million in assessed taxable property, making them the second largest taxpayer behind Travelers.

Its main campus is spread across dozens of acres on Asylum Hill and its corporate office at 690 Asylum Ave. was valued at $59.8 million during the city's recent revaluation. The 55 Farmington Ave. building was recently valued at $19.3 million.

The Hartford also maintains a significant presence in Simsbury and Windsor.

Simsbury First Selectwoman Mary Glassman said The Hartford employs about 1,900 in her town, and at least half of them are in the life insurance business, which is on the sales block. The Hartford also owns the 611,000-square-foot office building it occupies on Hopmeadow Street, which it bought in 2010 for $46 million.

Glassman said she recently met with five representatives from the company who told her they won't know for another 12 to 18 months precisely what businesses they will or won't retain.

Of course, it can't be known what a potential buyer would decide in terms of workforce and real estate needs in the state.

As Simsbury's largest employer and taxpayer, The Hartford's future has major ramifications for the town, Glassman said.

The company had taxable property assessed at about $45 million on the town's 2011 grand list.

"Retaining jobs in Simsbury is very important to our town,'' Glassman said. "This isn't just a Simsbury story. It's a Connecticut story and all hands are on deck to try and keep jobs.''

In Windsor, The Hartford spent $146 million in 2006 to build a new 450,000-square-foot office building on Day Hill Road for its life insurance and wealth management business. The company consolidated several offices into that building, and the company now employs about 2,000 people in Windsor, said Town Manager Peter Souza.

Like the rest of the state, Souza said he is in wait-and-see mode, but with a portion of Windsor workers in the life insurance and annuities divisions, he has concerns about what a potential sale could mean for his town.

The Hartford is third largest taxpayer in Windsor with taxable property worth about $76 million.

"We don't have a definitive sense of what will happen," Souza said.

Web editor Gregory Seay contributed to this report.

Reprinted with permission of the Hartford Business Journal. To view other stories on this topic, search the Hartford Business Journal Archives at http://www.hartfordbusiness.com/archives.php.
| Last update: September 25, 2012 |
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