Hartford Business Journal

www.HartfordBusiness.com May 18, 2015 • Hartford Business Journal 3 N.Y. office landlords taking over downtown Hartford By Gregory Seay gseay@HartfordBusiness.com H artford has long been the second or third choice for realty investors shut out of more expensive markets, like Boston and New York. The Capital City's proximity to both major markets has always made it an attractive, cheaper option for property owners and opera- tors, particularly ones who work or reside a few hours away by train or car. In the late '90s and early 2000s, primarily Massachusetts investors predominated among downtown Hartford's commercial buyers; today, a crop of New York risk-takers headline the latest batch of owners. But more important is that Hartford offers something else, brokers and landlords say, an intangible that may explain why in the past 12 months a half-dozen of its skyscrapers have come on the market and then sold: A new, upbeat narrative. It's one with plenty of illustrations: The leasing banner strung high atop soon-to-open Spectra Boutique Hotel on Constitution Plaza and the slow but methodical filling of other office-to-apartment conversions downtown; construction cranes overlooking the minor- league ballpark that will anchor the city's Downtown North redevelopment project; Front Street's eateries and entertainment venues and plans for UConn and Trinity Col- lege to join others with downtown campuses are part of the narrative. Also, last week's $17.5 million foreclosure auction of the Goodwin Square office build- ing and adjoining hotel removed major uncer- tainty as to the fate of the last downtown sky- scraper erected 25 years ago. "The story of downtown Hartford has never been better,'' said Christopher Ostop, senior vice president and broker for insti- tutional realty broker-adviser Jones Lang LaSalle in Hartford. Among the many factors responsible for recasting Hartford's reputation and potential with in- and out-of-state investors, observ- ers say, is the state's hands-on engagement in funneling economic development funding and in-kind support to the city. According to officials with the New York realty group that recently bought downtown's Stilts Building and 100 Pearl St. office tower, "a big plus'' in its buying decision was the state's $34.5 million purchase in 2013 of the former Connecticut River Plaza office build- ing, sandwiched between Constitution Plaza and I-91, to house state offices. "We feel that Connecticut in general, and Hartford specifically, is a major big city that is totally underutilized as far as the major capital markets are concerned,'' said Ber- nard Bertram, a principal in Brooklyn, N.Y.'s, Shelbourne Global Solutions LLC, purchaser in the last 10 months of downtown's Stilts Building and 100 Pearl St. skyscrapers for a combined $81 million, at least. Shelbourne officials say Hartford's appeal has more to do with dwindling opportunities to buy and hold real estate in New York City, particularly Class A office space, due to sky- rocketing property values. There, even the least desirable properties have sky-high valu- ations despite their potential to deliver anemic returns, Bertram said. "We made a clear decision,'' Bertram said, "that we didn't want to deploy capital in New York due to high 'cap rates' and low returns. … We decided it was the right time to invest in Hartford.'' Capitalization rates are a measure of a property's potential investment return, cal- culated by dividing the asset's net income by its total value. Mass. investors out, NY in The fresh wave of optimism has brought a new crop of investors to Hartford, many of them hailing from New York. The trend repre- sents a departure from years past when Mas- sachusetts investors dominated downtown Hartford's commercial realty market. By the late '90s, several groups of Mas- sachusetts investors plucked some of down- town Hartford's most visible skyscrapers. New Boston Fund bought 100 Pearl St. North- land Investment Corp. acquired a passel of buildings, among them CityPlace II, Metro Center and Goodwin Square. A decade later, those buildings, among others, began changing hands again, but this time it was New York and New Jersey William Barnett, Ph.D. Dean of Graduate Studies Trinity College gradstudy@trincoll.edu http://gradstudy.trincoll.edu THREE-YEAR FLAT TUITION RATE FOR M.A. STUDENTS W H AT A R E YOU R E A D I N G? Most of us read, some quite a lot, but we're reading differently these days. Single-page memos, blog posts, e-mail messages, social media posts, tweets, headlines, smartphone texts, emoji — the race toward brevity is unmistakable. Crowded schedules at work or home leave little time or energy for long-form, reflective reading. Students in our master's classes at Trinity College often report that they haven't read so much in years! They aren't complaining, since they welcome an opportunity to read and reflect on works that significantly expand their horizons. I have been privileged to know attorneys, underwriters, and health professionals who have completed master's degrees in American studies or English. Actively engaging material outside their professional field enriches their lives and careers. As new alumni/ae receive their diplomas this spring, I hope that they will continue to read, reflect, and learn. They now know how. Continued 100 Pearl St., above, CityPlace II, below left, and the Stilts Building are among downtown Hartford office properties that have changed ownership hands from Massachusetts investors to landlords from New York. P H O T O | C O N T R I B U T E D P H O T O S | H B J F I L E

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