Buyer Closes Purchase For Hartford's Metro Center Office Tower
By KENNETH R. GOSSELIN
March 26, 2013
The new owners of Hartford's Metro Center tower have a bullish outlook for the downtown office market, as they take over the 12-story building on Church Street near the train station.
"In downtown Hartford, there are enough things going on right now, you're going to see the health of the office market improve over the next three to five years," Jonathan Keller, president of The Fremont Group, which is based in West Hartford, said Tuesday.
Keller said he is encouraged by the state's pending purchase of two office buildings to consolidate state workers, the University of Connecticut's plan to relocate its West Hartford campus downtown and a wide array of apartment conversion projects.
Fremont closed the $22.7 million Metro Center purchase late Monday, the 296,000-square-foot office tower becoming, by far, Fremont's largest office holding in the city. The commercial real estate investment firm also owns the Hartford Family Court building at 90 Washington St.
Financing included a combination of a bank loan, provided by Farmington Bank, and investor equity. Keller declined to elaborate on the amount of the bank loan.
Overall office vacancies in downtown Hartford stood at 30.3 percent at the end of 2012, unchanged from the previous year, according to commercial real estate services firm CBRE. Class A vacancies — the most modern with the latest technology and amenties — were nearly 27 percent at the end of last year, also unchanged from 2011.
The state's purchase of the twin-towered Connecticut River Plaza will remove 575,000 square feet of vacant office space from the market, sending the Class A vacancy down to about 17 percent, CBRE has projected. Owner-occupied space is not counted in tallying vacant space. In addition, UConn could occupy existing vacant space.
Fremont purchased Metro Center as a result of a foreclosure that cost Northland Investment Corp. its ownership of the tower in 2011. The purchase price is roughly $80 a square foot. Last year, CityPlace sold for $99 million, or $112 a square foot. Both buildings have strong anchor tenants.
Keller said he sees the opportunity for the building's value to increase.
Metro Center is already 80 percent leased with two major tenants — Lincoln Financial and the Connecticut Business & Industry Association — and both recently renewed their leases.
Fremont also intends to aggressively market the 50,000 square feet of available space, all on the top two floors. Space in the building hasn't been actively marketed in recent years because of the foreclosure.
Keller said he considers Metro Center to be one of the top five downtown office buildings, with its 1,250-space garage a key asset. The building, constructed in 1986, also includes a gym and full-service cafeteria.
Fremont, founded in 1996, takes its name from the street where his grandparents lived in Chelsea, Mass. Fremont owns 2.8 million square feet of office and industrial space, about two million, or 70 percent, is within a 40-mile radius of Hartford. The rest is located outside Connecticut.
Major holdings in the Hartford area include the Riverview Square office complex and a majority of the Prestige Park industrial area, both in East Hartford; and the office building at 200 Great Pond Drive in Windsor where Alstom Power is a major tenant.
Would Fremont be interested in more purchases in downtown Hartford?
"We've always been opportunistic," Keller said. "We look at all that comes on the market. If its positioned and priced correctly, we might be interested."
Reprinted with permission of the Hartford Courant.
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