Big Downtown Hartford Deal: CityPlace I Sale Closes
By By Kenneth R. Gosselin
April 01, 2012
Hartford’s CityPlace I office tower — the tallest building in Connecticut — has been sold in a $99 million deal that is downtown’s biggest since 2007.
The sale of the 38-story office tower closed Friday, Jones Lang LaSalle, the commercial real estate services firm handling the sale, told me Sunday. The sale price is roughly $112 a square foot, just below the $119 a square foot paid for State House Square five years ago.
The sale, by the original owners from its construction in 1983, has been watched as a crucial indicator of what a prime, newly-renovated and nearly fully occupied building in the city’s central business district is now worth, even amid a sluggish commercial real estate recovery.
Jones Lang LaSalle declined to name the buyer, but sources familiar with the deal say it is the Newton, Mass.-based real estate investment trust, CommonWealth REIT. Commonwealth REIT couldn’t be reached for comment.
“The high quality investment grade tenants, along with its excellent location, high quality construction and consistently high historical occupancy made this property extremely compelling and we received numerous offers for the property,” said Christopher J. Ostop, executive vice president at Jones Lang LaSalle in Hartford.
CommonWealth REIT already owns nearly a million square feet of office and distribution space in Connecticut along the 1-91 corridor from Milford north though Wallingford to East Windsor, according to its web site. The CityPlace I purchase will almost double its holdings in the state.
The sale was expected by the end of last year, but it was delayed because the buyers also wanted to purchase the city-owned land at the corner of Trumbull and Asylum streets where the 885,000-square-foot tower is located. A $2.5 million sale for the 1.2 acres under the building was approved by the Hartford City Council in late February, clearing the way for the building sale.
The majority of the city’s landlords are facing high vacancy rates, but the owners of CityPlace were in the enviable position of enjoying 98-percent occupancy when the tower went on the market in June without an asking price. A new, marquee tenant — UnitedHealthcare –moved into the tower in 2010 after investing $34 million in renovations, the most massive makeover since it was constructed in 1983.
UnitedHealthcare’s decision to relocate from another downtown building complex was key to CityPlace I recovering from the loss of MetLife in 2008. MetLife, which moved its operations to Bloomfield, had occupied more than half of the tower.
The ownership of CityPlace I is not related to Northland Investment Corp., owner of the smaller, adjacent CityPlace II, which is now in foreclosure.
Reprinted with permission of the Hartford Courant.
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