Hartford Business Journal

8 HARTFORDBUSINESS.COM | AUGUST 19, 2024 DEAL WATCH Receiver appointed for 23-story Hartford office tower facing foreclosure The Stilts office building at 20 Church St., in downtown Hartford, is currently going through the foreclosure process. PHOTO | COSTAR By Michael Puffer mpuffer@hartfordbusiness.com O ne of the Hartford skyline's most prominent office towers has been placed into the hands of a receiver as a foreclo- sure lawsuit against the building's landlord continues. Two years ago, Wells Fargo filed a foreclosure lawsuit in Hartford Superior Court, seeking to claim the 420,000-square-foot, Class A office tower at 20 Church St., commonly known as the "Stilts Building." The bank alleged an affiliate of Shel- bourne Global Solutions — downtown Hartford's largest office landlord — missed multiple payments on a $30.75 million mortgage. Judge Matthew Dallas Gordon, on July 30, accepted an agreement between Shelbourne and Wells Fargo for the appointment of a receiver. That settled one dispute, but the foreclosure lawsuit continues. Under the order, John Rothschild Jr., national director of real estate services firm Newmark's special assets group, took over management CONSTRUCTION GROUP CONSTRUCTION GROUP FORTUNATO CONSTRUCTION GROUP CONSTRUCTION GROUP FORTUNATO www.fortunatoconstruc on.com W H O ' S W H O ' S B U I L D I N G B U I L D I N G Y O U R F U T U R E ? Y O U R F U T U R E ? of the building as receiver. In February, Shelbourne filed a countersuit against Wells Fargo, as well as the bank's special servicer — PNC Bank — and others. Shelbourne's complaint alleges Wells Fargo and PNC's Midland Loan Services arm were denying access to rents, putting at risk the ability to keep up with 20 Church St.'s operating expenses. Shelbourne contended this was intended to force it to surrender the building. Now, Shelbourne says it has consented to the receiver for the benefit of its tenants and the building. In a statement to the Hartford Business Journal, Shelbourne said it maintained the building's Class A status, even as operating funds were choked off by Wells Fargo and its special servicer. Shelbourne said the settlement requires the lender to pay it for "outstanding obligations of the building." Shelbourne asserts Wells Fargo has agreed, through settlement agree- ments and the receivership compro- mise, to repay more than $1 million in building maintenance and operation costs incurred by Shelbourne at 20 Church St., during a period the building owner had not received rents. Shelbourne said it will continue to "vigorously defend" its investment in 20 Church St. in court. The company also noted the dire condition of the U.S. office market, which, it said, is prompting large institutional inves- tors and smaller, private ones to simply abandon properties. "Shelbourne is committed to Hartford and continues to invest and expand its assets in the city," the landlord said. "The Hartford market is experiencing some of the worst of these trends, with effective vacancy rates above 35%. The state, city, Shelbourne and other owners in the central business district are working constructively to address these issues. This will take creativity, time and resilience, and we are up to the challenge."

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