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Bank Of America Tower For Sale

Owner: Good Spot For Apartments

By Kenneth R. Gosselin

August 06, 2011

Another skyscraper in downtown Hartford is for sale: the former Bank of America Tower on Main Street.

Owner Michael Grunberg confirmed that he has been quietly talking for several months to potential buyers of the now vacant, 26-story tower at 777 Main St., arguably at the most visible spot in downtown across from the Old State House.

"We're out in the market to try to sell the building," Grunberg said. "We are actively looking at other alternatives than commercial: a combination of commercial and residential or just residential."

The tower, one of the tallest in the city, would capitalize on views of the river. And its long, narrow design would help ensure that units would have ample walls on the outside of the building, Grunberg says.

The tower, constructed in 1967, is in dire need of renovations - including the removal of asbestos - that could top $1 million a floor. It faces the real possibility of being mothballed, a prospect city officials don't want to see.

Grunberg says the building has no asking price, but he's trying to recoup as much as he can of the $13 million he paid for the tower in 2006. There have been no offers, but the building has been shown to prospective investors, he said.

In downtown Hartford, CityPlace I also is for sale, but it is fully occupied and recently underwent massive renovations.

Nearly a third of all office space in downtown Hartford was empty at the end of last year, as the vacancy rate rose to 30 percent, three times what is considered a healthy market. Because the building is empty, it is not likely that an investor would want to buy the tower for office use given downtown office vacancy.

Grunberg has floated the idea of residential use at the tower before. Shortly after he purchased the building, Grunberg talked about building upscale condominiums on the top floors. That didn't happen, he said, because Bank of America didn't want to move from the space. Subsequently, the bank left the tower, moving to smaller quarters a block away at CityPlace I.

Even though the housing market is now too weak for condos, Grunberg said there is still an opportunity for residential redevelopment, this time for apartments.

A report this week from the National Multi Housing Council, a trade group that represents large apartment complex owners, said the demand for apartments nationally continues to rise, even though other sectors of the housing market - sales of single-family houses and condos - remain sluggish. Financing options also continue to increase, the report noted.

The late 1990s saw a push for more downtown housing, with more than 1,000 apartments added over the next decade, most notably the soaring Hartford 21 tower. Some city officials have said another 1,000 residential units could be absorbed in the coming years, including smaller, one-bedroom and studio apartments - for which there are now strong demand and waiting lists.

One planned project, the conversion of the Clarion Hotel on Constitution Plaza into 180 to 200 apartments is aimed at that market.

Grunberg has said the Main Street tower might be best marketed by first removing the asbestos. While the asbestos is now hidden, it would be disturbed in any renovation.

Grunberg said he continues to talk with city and state officials about incentives that would help absorb some of the costs. He also said he would consider a joint venture, possibly selling a major interest to a residential developer.