Hartford Business Journal

HARTFORDBUSINESS.COM | JANUARY 27, 2025 5 DE AL WATCH JCJ Architecture, a national firm with a Hartford office, on average has worked on one office-to-apartment or office-to-hotel conver- sion per month over the past year, said Principal Harry Wheeler. That's up from one or two conversion projects JCJ worked on annually prior to the pandemic, Wheeler said. He also noted that conversion work isn't concentrated in any one city. "It's not just in any specific market," Wheeler said. "It's across most metro- politan areas. It's not just affecting New York or Boston or Hartford. It's happening everywhere, which gives validity to the shift in the office market." Conversion challenges Despite the increased activity, not all buildings are ripe for conversion, experts said. Typically, an official building eligible for conversion must be at least 50,000 to 60,000 square feet, Brown said. Conversely, converting large office buildings with deep floor plates is a challenge because apartments need window access. Voya Financial's 470,000-square- foot Windsor headquarters, at One Orange Way, provides a good test case. Set on nearly 77 acres, the building was completed in 2007 at a cost of $100 million. It went on the market in 2022 as Voya signifi- cantly shrunk its office footprint. Shawn P. McMahon, a managing director with real estate services firm JLL, said an architectural firm was hired to study the possible transition of the building and surrounding land to industrial and residential uses. While the building remains in pristine condition, its broad and deep layout make it ill-suited for wholesale multifamily conversion, he said. But, the surrounding land could be devel- oped into any number of uses. McMahon is working with Windsor officials to explore alternatives. Goman said most of the office buildings his firm has studied are around four to five decades old, and either functionally obsolete, or no longer fit market needs. "These buildings were never meant to be forever buildings," Goman said. "They are not Notre Dame or the Sistine Chapel. They were built to a budget. Your 40- to 50-year-old build- ings are at the end of their lifespan, and the right answer in about 75% of cases is to tear it down. It's too costly. It will never make financial sense." This vacant 20,000-square-foot North Haven office building, at 23 Maiden Lane, is being eyed for a partial apartments conversion. PHOTO | COSTAR Spate of Hartford development projects look for new life in 2025 By Michael Puffer & Greg Bordonaro mpuffer@hartfordbusiness.com W ith the start of the New Year, several Hartford development and redevel- opment projects could be moving forward or restarting. Meanwhile, another redevelop- ment in the city's Parkville neigh- borhood is trying to overcome numerous challenges, including higher construction costs. Spectra's expanding Hartford pipeline New York-based Spectra Construc- tion and Development and partners are seeking a low-interest loan of up to $7 million from the Capital Region Development Authority (CRDA) for construction of a new 84-unit apart- ment building near Hartford City Hall. The $20.7 million project will be built on a 14,000-square-foot parking lot at 17 and 21 Wells St. Spectra, led by President Daniel Klaynberg, routinely partners with brothers and developers Matthew and Evan Levy. Together, they are close to wrapping up the conversion of a former municipal building at 525 Main St. into 42 apartments over three retail spaces. The first units are expected to be occu- pied in February, Klaynberg said. The partners are also converting the upper floors of a former fire station at 275 Pearl St. into 34 apart- ments, with the first units expected to be ready for occupancy in March. The conversion of the first floor into a 4,200-square-foot restaurant space will take longer. They also plan to launch this year the conversion of a 33,000-square- foot office building, at 30 Laurel St., into 48 apartments. Spectra is currently leasing the adjacent Wells Street lots from the city, but has an option to purchase the properties for $162,000. The $7 million loan, which still needs CRDA board approval, would be paired with $2.1 million in developer equity, $10.14 million in a construc- tion loan, and $1.41 million in deferred developer fees to finance the project. Boutique hotel concept revived More than a year ago, the CRDA approved a $7 million loan to help turn a 53,531-square-foot former LAZ Parking headquarters office building in downtown Hartford into 78 apartments. LAZ CEO Alan Lazowski and part- ners have since shifted course and are now pursuing a boutique hotel concept for the 1925-vintage building at 15 Lewis St. The team also includes Hart- ford-based developer Lexington Part- ners and Shelbourne Global Solutions, downtown Hartford's largest landlord. Lexington President Chris Reilly said the partners originally consid- ered the hotel concept in 2019, but abandoned the idea after the COVID-19 pandemic tanked the hospitality industry, drying up any potential project financing. Now, with the hospitality industry rebounding, and a dramatic drop in hotel rooms in the Hartford market in the intervening years, Reilly said he's confident lenders and inves- tors will support the estimated $37 million project. "We think we can put the right (From left) Spectra Construction & Development President Daniel Klaynberg, Evan Levy and Matthew Levy are partnered in the nearly-completed conversion of the former Hartford municipal building at 525 Main St. (pictured above) into apartments. HBJ PHOTO | MICHAEL PUFFER financing together at this point," Reilly said. "It's a much more credible busi- ness case to make for a hotel." Current plans are for a hotel of about 75 to 90 rooms, which would make use of the building's historic charm and location right off Bushnell Park. The partners plan to restore a restaurant space on the first floor and fit out new rooftop restaurant space. Reilly said the goal is to begin construction this fall and have the hotel ready for launch in early 2027. Millennium building reboot The owners of the 18-story Millen- nium apartment building in downtown Hartford recently made good on nearly $2 million in back taxes, thanks in part to a $27.2 million mortgage secured on the property in December. A joint venture of Waterbury-based Axela Group and downtown Hart- ford landlord Shelbourne Global Solutions in 2021 paid $22 million Harry Wheeler Shawn McMahon Continued on next page

• Cover