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Back From the Abyss

By Gregory Seay

August 15, 2011

Richard T. Mulready long yearned to be in real estate. While working as a Hartford banker in the early ‘70s, fortune smiled broadly on him.

His life-changing opportunity came when one of the city’s real estate barons, David T. Chase, built a signature skyscraper downtown — the “Gold Building’’ — and hired Mulready to run it (he still does).

From there, Mulready graduated to commercial development, adding another landmark to downtown’s skyline — Metro Center I. He even found time to be a state lawmaker. But by the early ‘90s, overexpansion, including a disastrous foray out of state, caused his dream to crumble into bankruptcy.

Today, back on his feet financially, Mulready still manages other peoples’ properties. But rather than pursue his next big deal in a career spanning five decades, he’s preparing to hand off his operations to a younger generation of real estate go-getters.

He recently rechristened his longtime vehicle, Servus Management, as R.M. Bradley Co., a fixture in Boston’s commercial realty market he bought a few years back.

“I’m 67 years old,’’ the chairman and CEO said from the across the table in his 19th-floor Gold Building corner office with a sweeping southern view of downtown and beyond. “I don’t know what my horizon is. The only thing that makes any sense is to wrap things together and sell it.’

R.M. Bradley’s property-management portfolio consists of six million square feet of office, industrial and retail properties owned by public and private investors in a swath stretching from Boston to Washington D.C. Bradley is No. 2 on the Hartford Business Journal’s ranking of commercial realty superintendents in the Hartford region.

The biggest chunk — some 4 million square feet — is in Connecticut, particularly buildings the state owns. Among them is 20-story 25 Sigourney St., home to the state tax collector, and the former Aetna complex at 410-474 Capitol Ave. that houses the mental health and addiction agency.

Altogether, his company draws at least $39,500 monthly in fees from Connecticut taxpayers for managing 14 state buildings and garages, ensuring they are clean, comfortable and safe for occupants. His firm gets good ratings for its work, state records show.

Mulready’s firm is paid another $18,500 a month for managing 10 courthouses in Hartford, Manchester, Vernon and Danbury, records show.

Along with The Gold Building, R.M. Bradley’s private property roster includes overseeing both the downtown Bushnell Towers condos and theater, and Glastonbury’s Somerset Square shopping center.

It’s a stable business, Mulready says, one in which clients stay aboard as long as they are happy with the building superintendent’s performance.

The downside, however, is the low margins in that realty segment, he said. That’s one reason, he says, he added four brokers, up from one 18 months ago, to pursue the more lucrative business of helping his clients fill empty space in their buildings.

“If you want to be a full-service company, you need a brokerage, property management and advisory services,’’ Mulready said.

Does he miss the development side of the business?

“Yeah, somewhat,’’ he said. “We had our share of wins and losses.’’

Go-go Metro

He holds up a notebook binder with a color cover photo of one of his wins — Metro Center I.

By 1986, Mulready had invested $47 million to open Metro Center and its parking garage at 350 Church St., planned as the first of three towers on a blocks-long parcel across the street from St. Patrick-St. Anthony Church that originally owned the site.

A year later, lead tenant Cigna Corp. exercised an option and paid $71 million for the 12-story building, subsequently flipping it, Mulready and others recalled, to notorious syndicator Colonial Realty Co. for $85 million.

By the time Colonial collapsed in 1990, the go-go promoter had pitched Metro Center’s value to investors at $100 million.

Mulready says Sanwa Bank, which for a time held title to the foreclosed building, rejected his offer of around $13.5 million, claiming to have a better offer.

“They never came back to us after that deal fell apart,’’ he said.

Metro Center later was sold for $10 million to Northland Investment Co., which earlier this year lost it to foreclosure. Sanwa’s successor, Bank of The West, did not comment.

Golden mentor

Though Mulready laments the deal that got away, his fondest memory is of the deal involving his mentor, David Chase, to build the Gold Building.

Mulready was an officer in the realty unit of then Hartford National Bank, when the bank invited Chase, a developer-entrepreneur, to partner in the transformation of its Main Street parcel into an office tower.

Chase was interested and so was Mulready, who saw opportunity to learn real estate inside out from one of the best.

“He’s without question the brightest financial mind I ever met,’’ Mulready says.

One Financial Plaza — known by the gold tint of its reflective windows — opened in 1975, with Travelers and United Technologies Corp. as major tenants (UTC is still a lead tenant). Mulready’s then fledgling Servus Management was hired as the building’s superintendent.

Mulready, Chase and a third man were Servus’ founders — the latter two investing $35,000 each. Later, when Mulready was ready to buy out his partners, he only had cash enough for one.

When Mulready approached Chase about his dilemma, Chase surprised his protégé by forgiving the debt.

“I’ve always been eternally grateful,’’ Mulready said.

Chase, now 81, says, “He needed a break and I was able to do it.’’

“Richard is a very capable man,’’ Chase said. “He was always an achiever. He took on a project and stood with it. He’s somebody you can trust.’’

People who have sat across from Mulready at the deal table in business and the Legislature say that’s a key reason he recovered from financial disaster.

Painful lessons

But trust alone couldn’t save Mulready from the vicissitudes of a roiling ‘80s real estate market that hit the brakes suddenly in the early ‘90s. Staked with proceeds from the Metro Center sale, he embarked on a fateful development expansion.

Among his projects was Canal Square, an office-retail complex in downtown Schenectady, N.Y., on which he had borrowed at least $1.5 million. Worse, he had personally guaranteed loans on other high-profile investments.

By April 1993, Mulready was forced to file Chapter 7 liquidation to get out from under $17 million in debt — much of it unsecured — owed at least 35 creditors.

It was a bitter lesson, he says, into how what looks good one moment can suddenly turn sour. He sees others repeating his same mistakes.

“One of the lessons you learn,’’ he said, “is if you have a good idea and three others have the same good idea, and all of you execute, then all of you get screwed.’’

Another lesson, he says, is that even with proper execution, a good development idea can go bad with timing. The long lead times to get a project from the drawing board to completion can be a curse, he says.

“The market can change,’’ Mulready said.

Add to both, he says, the market’s psychosis for assuming the ways thing are now will always be and you have a recipe for disaster.

“There’s a human thing that all of us are susceptible to,’’ Mulready said, “everyone trying to project the trendline forward: Things are going badly, so things will stay that way, or things are going up …’’

Landlords’ plight

His fear nowadays, he says, is for the plight of downtown Hartford’s landlords who must wrestle with rising ownership and operating costs, led by high property taxes, in a climate of stagnant or declining rents.

“My biggest concern,’’ Mulready said, “is that there is such an impediment … to get [companies] to move here. It’s hard for these landlords to be competitive with the suburbs.’’

Meantime, Mulready is mentor to a new generation of realty pros on his staff, some of whom he says may ultimately take the reins of his company. One is David Fagone, Bradley’s president and chief operating officer, who oversees the property management operations.

Another is Andrew Filler, an ex-CB Richard Ellis broker who arrived 18 months as an equity partner to run the brokerage side of the house. A Mulready daughter also works at the firm.

“One of the reasons I came here,’’ Filler says, “was to own a business. In five years, I see us being a much stronger business.’’

New Haven is one of the markets ripe for Bradley to plumb, he says.

Whatever his future, Mulready says he is happy right where he is.

“I always wanted to be in the real estate business,’’ he said. “No regrets about that. Obviously, I have regrets about some of the individual deals. These aren’t boom times but times are all right.’’

The Mulready File

Born: May 30, 1944 in Hartford, raised in West Hartford; father a real estate appraiser, homemaker mother.

Married: Father of five; 14 grandchildren

Education: Conard High (1962), West Hartford; Holy Cross College for two years, then University of Hartford (1967); MBA, UCLA (1968)

Hobbies: Golf; reading, with more than 2,000 titles in his home library; current book, The Troubled Man, by Henning Mankell.

Best realty deal: Starting Servus Management in 1975; building Metro Center I in 1987

Worst deal: Investing to convert 555 Asylum St., next to the I-84 overpass at Union Station, to an office building just before the local market collapsed in the early ‘90s.