Wave Of Office Sales In City Keeps Flowing

State House Square Now Under Contract

January 13, 2007
By KENNETH R. GOSSELIN, Courant Staff Writer

A string of office building sales in downtown Hartford last year is poised to keep running right into 2007.

State House Square, a marquee office complex next to the Old State House, is now under contract for between $90 million and $100 million and is expected to sell first, changing owners next month for the second time in three years.

That's well above the $66 million that was paid in 2003.

Experts say the pending sale is more evidence that investor confidence in the city is growing amid redevelopment. And buyers of prime properties are increasingly willing to pay significantly higher prices than they would have a few years ago, they said.

"Buyers are just getting more comfortable with Hartford," said Patrick Mulready, a broker at CB Richard Ellis in Hartford who spoke at the firm's annual outlook conference this week.

In the late 1990s, buyers often looked to Hartford for office properties that may have been in need of renovations or could be purchased at a low price. The strategy then was to make improvements, attract new tenants and sell at a profit.

Now, Mulready said, that is starting to change. Buyers are seeing value in a city that continues to show tangible signs of progress, and they are now willing to pay more to own property in the city and surrounding suburbs, he said.

State House Square, with 845,000 square feet of office and retail space, is expected to sell for between $106 and $118 a square foot, well above the $78 a square foot that the current owner, Harbor Group International of Norfolk, Va, paid.

Mulready, whose firm represents Harbor Group, declined to identify the buyers, except that they are two private equity firms from New York. Harbor Group declined to comment.

At least two other downtown Hartford buildings - 100 Pearl Street and 10 Columbus Boulevard, the "Candy Cane Building" - could sell this year, Mulready said.