Downtown Hartford's CityPlace office tower — the tallest building in Connecticut — is for sale.
The marketing of the landmark, which will be announced Friday, will provide a crucial indication of what a nearly fully occupied building in the city's central business district is worth in 2011. The market has been tested recently by foreclosures, distress sales and rising vacancies, but there has been little action in financially healthy office properties.
There is no asking price, according to Jones Lang LaSalle, the commercial real estate firm handling the sale
Although the majority of the city's commercial landlords are facing high vacancy rates, the 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 current 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 now 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.
"The timing has never been better to sell," said Christopher Ostop, executive vice president at Jones Lang LaSalle in Hartford.
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 38-story, 885,000-square-foot 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 make improvements to the building.
Although there is no asking price, city records peg the market value of the skyscraper at $83 million, based on its assessed value in 2010. That would translate to about $94 a square foot, and it might not reflect the value of the building with all of its leases in place.
Last summer, the downtown market set a record low for the sale of an office complex. The two-building Connecticut River Plaza, which was empty, sold for $6.7 million, or $12 a square foot, an amount even less than a yearly lease in the city.
The ownership of CityPlace is not related to Northland Investment Corp., owner of the smaller, adjacent CityPlace II, which is in foreclosure.
Reprinted with permission of the Hartford Courant.
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