CityPlace Tower In Hartford Is Soon To Have New Owner
December 07, 2011
Hartford's CityPlace office tower — the tallest building in Connecticut — is close to getting a new owner.
CommonWealth REIT, based in Newton, Mass., has agreed to pay $99 million for the 38-story building and is expected to close the purchase by the end of this year, according to regulatory filings and a source familiar with the deal. CityPlace went on the market in June without an asking price.
The sale has been watched as a crucial indicator of what a nearly fully occupied building in the city's central business district is worth in 2011. The sale price is roughly $112 a square foot, just below the $119 a square foot paid for State House Square in 2007.
CommonWealth REIT and Jones Lang LaSalle, which marketed the property, declined comment Tuesday.
The majority of the city's commercial landlords are facing high vacancy rates, but the current owners of CityPlace are in the enviable position of having a 98 percent occupancy. A new, marquee tenant — UnitedHealthcare — moved in a year ago, after investing $34 million in renovations, the most massive makeover in the tower's 28-year history.
The owners, CityPlace LLC, a limited partnership, have owned the building since it was built in 1983. The partnership chose to put the building on the market because of its high occupancy and strong roster of tenants, which includes Bank of America and a long list of well-regarded law firms. UnitedHealthcare has just begun a long-term lease that runs through 2023.
UnitedHealthcare's decision to relocate from another downtown office complex to CityPlace was key to recovering from the loss of MetLife, which vacated more than half of the tower in 2008, moving its workforce to Bloomfield. The owners had no mortgage on the building when they secured $49 million in financing in 2009 to pay property taxes and improve the building.
The ownership of CityPlace is not related to Northland Investment Corp., owner of the smaller, adjacent CityPlace II, which is in the final stages of foreclosure.
Reprinted with permission of the Hartford Courant.
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