Majority of Hartford's Constitution Plaza Up For Sale
By KENNETH R. GOSSELIN
March 16, 2012
The co-owners of the majority of Constitution Plaza in downtown Hartford — six buildings including two signature towers in the city's skyline — have put the property up for sale.
Co-owners GE Capital and Capital Properties are marketing the buildings without an asking price, according to Jones Lang LaSalle, which is handling the sale.
The buildings for sale include One and 100 Constitution Plaza — the two high-rise towers — plus 10, 248, 250 and 260 Constitution Plaza. The buildings contain 660,000 square feet of office and retail space on nearly seven acres, plus a 1,743-space parking garage.
The partners purchased the buildings on Constitution Plaza in 1999 and have spent tens of millions on renovations. Capital Properties, headed by Richard Cohen, invested $10 million to become co-owner and took on the role of day-to-day management and oversaw redevelopment efforts.
Capital Properties, based in New York, did not immediately return a call seeking comment.
The largest chunk of the space — 504,000 square feet — is contained in the two office towers which, together, have an 82-percent occupancy. That's considered quite healthy in a city where the downtown Hartford office vacancy rate was nearly 30 percent at the end of last year, according to a recent report from CBRE-New England.
Despite high vacancies in the city, strong occupancy figured highly in one pending office building sale downtown. CityPlace I — the tallest tower in Connecticut with 885,000 square feet — is now under contract for $99 million, or $112 a square foot. That is just below the $119 a square foot paid for State House Square in 2007.
Christopher J. Ostop, executive vice president at Jones Lang LaSalle in Hartford, said Wednesday the owners of the Constitution Plaza properties decided to put the buildings on the market now because of the CityPlace I sale, expected to close later this month. That sale, he said, demonstrated that regional and national investors are now willing to again look at Hartford for major office purchases. CityPlace I is being acquired by a Newton, Mass.-based real estate investment trust.
"Investors are willing to make big bets in Hartford again," Ostop said.
Ostop said the CityPlace I deal also signals the beginning of a shift from interest exclusively in foreclosures to office buildings with strong tenant rosters, also indicative of a more optimistic economic outlook. CityPlace has an enviable 98 percent occupancy with major long-term leases.
Constructed in early 1960s, Constitution Plaza was often pointed to as a prime, failed example of Urban Renewal and gained added notoriety in the late 1980s as the last big purchase of Colonial Realty before its collapse. But under the stewardship of Capital Properties combined with the financial firepower of GE Capital, the plaza underwent the first major phase of a revival with top-to-bottom renovations that boosted office space leasing.
Both One and 100 Constitution Plaza now have major anchor tenants. Shipman & Goodwin, the Hartford-based law firm, leases nearly 40 percent of One Constitution and XL America, the insurer, leases 45 percent of 100 Constitution. The City of Hartford is a major tenant at both 250 and 260 Constitution Plaza, leasing almost 60 percent of 260.
The six buildings join the former Travelers Education Center at 200 Constitution Plaza, which now is also on the market after being repossessed in a foreclosure.
The new owners of the old Clarion on the plaza are planning to convert the former hotel into as many as 200 apartments, mostly studios and one-bedroom units. Developer Girona Ventures and Wonder Works Construction and Development Corp. are working out financing, city officials say, and work could begin this year.
And there is still an empty hole where the once-celebrated Broadcast House once stood before its demolition in 2009. Plans for a new tower in its place by developer Abul Islam have, so far, not materialized amid the high office vacancies.
Reprinted with permission of the Hartford Courant.
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