Hartford Business Journal

14 Hartford Business Journal • August 7, 2017 www.HartfordBusiness.com from page 1 longer to sell a condo/ townhome than a sin- gle-family dwelling. "We're swim- ming in rentals, but we don't have a lot to sell,'' said Realtor Rebecca "Becky" Koladis, of Berkshire Hathaway HomeSer- vices New England. That could be changing. The Capital Region Development Authority (CRDA), a funding fixture for nearly all of down- town's apartment con- versions, has pledged a $426,000 loan to the $1.2 million to $1.5 million Asylum Lofts conversion. CRDA Executive Director Michael Freimuth said the condo-lofts' devel- opment and unit sales may provide a bellwether as to how much residential- condo demand truly exists in this mar- ket. The city also confirms its keen interest in Asylum Lofts' future. Among the last downtown Hartford condos built more than a decade ago were those in The Metropolitan, which abuts the 289 Asylum building. Thirty-five of The Metropolitan's original 45 condo units are in the hands of a commercial owner, who rents them to commercial tenants. "It's somewhat of a 'pilot project' at mod- est sale prices that may appeal to a slice of the current marketplace … ,'' Freimuth said via email. " … If successful, we'll take the lessons and apply it to another, perhaps larger effort." The nonprofit Hartford Community Loan Fund (HCLF), which was involved in financing several small office-to-apartment conversions downtown, has committed an unspecified sum of capital to Asylum Lofts. HCLF CEO Rex Fowler said the organization's involvement is tied directly to conventional mortgage lenders' unwillingness to book condo loans. "We talked to Realtors who said the need is there but developers struggle to get financ- ing,'' Fowler said. The HCLF, Fowler said, surveyed some area Realtors, who confirmed the need for condos in and around downtown. However, they heard the same refrain: Tough for developers to obtain financing for condo developments, because of lender reluctance due to the difficulty selling off development loans and condo-buyer mortgages on the secondary market. HCLF is working with one unnamed lender on a blueprint that involves the lender granting mortgages to condo buyers. But rather than sell- ing them on the secondary-mortgage market, the lender would retain the mortgages on its books, giving the condo developer time to sell remain- ing units. That ultimately, Fowler said, makes the packaged condo loans more attractive to mortgage-buyers in the secondary market. Financing headaches Ramirez, a city resident and Trinity Col- lege alum who last Oct. 7 joined with project co-partner and Los Angeles architect Chris- topher Compton to outline their Asylum Lofts concept to CRDA's housing committee, said demand for condos exist despite too many misperceptions about them. However, the one reality, he said, is that lend- ers remain reluctant about financing condo- miniums. Many lenders, observers say, are still smarting after getting burned from investing in the construction and sales of condos before the home-mortgage meltdown that resulted from the near-global financial collapse in late 2008, which precipitated the Great Recession. Area Realtors, too, cited inaccessibility to mortgage financing as a key reason that the Hartford region's and the state's condo/town- home sector has been mired in uneven sales and median sales pricing. Unsold units contribute to a glut, which further lowers condo market values and sales prices, further fueling misperceptions about attached-housing demand, observers say. Meantime, lenders generally confirm the trend of tightened mortgage-loan standards for condos. The Greater Hartford Association of Real- tors (GHAR) recently reported that June attached-home sales rose 2.6 percent to 319 units vs. 311 sold the same month last year. Medi- an price fell 2 percent to $149,900 from $152,900. Condo/townhome sales year-to-date are up 8 percent to 1,327 units sold vs. 1,228 sold the same period a year ago, GHAR said. Medi- an price is down 2.44 percent to $140,000. Statewide that same month, the Connecticut Association of Realtors counted 1,016 units sold in June, up 9 percent from June 2016. Their median price rose 8.8 percent to $185,000. Within Hartford's borders alone, just 41 condo units were sold in the last six months, through June; only 33 units were sold in the six previous months, said Rocky Hill Realtor Cur- tiss Clemens Sr. In an 18-month period before those, just 47 units sold, he said, citing Realtor's proprietary Multiple Listings Service data. For those reasons, the president of Cen- tury 21/Clemens & Sons Realty Inc. says he doesn't see any meaningful rise in local condo demand or sales anytime soon. Ramirez, who said he spent several years as an administrator for the Hartford school system before turning to development, said no firm sale prices have been set yet for Asy- lum Lofts' units. But he added they likely will be in the $200,000 range. Half, he said, will have 1,100 square feet and the rest 1,200-square-foot units. All will have two bedrooms, a single bathroom and an openly configured kitchen-dining-living space. Comp- ton's firm designed the spaces, Ramirez said. The building is already vacant and gutted and awaiting interior construction, which is due to begin this fall and the first units ready for occupancy next spring, Ramirez said. Sean Fitzpatrick chairs CRDA's housing committee and is the city of Hartford's director of development services, effectively its econom- ic-development czar. Fitzpatrick said the city is "watching this project carefully to gauge the interest of Millennials and others in this kind of housing product in downtown Hartford." n More Hartford condos coveted Hartford Area Condominium Communities Bushnell Tower/Bushnell in the Park The Metropolitan, Pearl Street The Linden Capitol Avenue Buckingham Street Charter Oak Avenue Riverpoint Condominiums, East Hartford S O U R C E : R E A L T O R S ' P R O P R I E T A R Y M U L T I P L E L I S T I N G S E R V I C E ; A R E A R E A L T O R S H B J P H O T O | G R E G O R Y S E A Y H B J P H O T O | S T E V E L A S C H E V E R Why ransomware costs small businesses big money By Selena Larson CNNMoney W hen businesses are hit with ran- somware, it's not just the ransom amount that could financially hurt. The time spent trying to get systems back online and potential revenue lost in the meantime makes a lasting impact, too. Major cyberattacks like WannaCry have put ransomware — known as malware that locks down computers until money is sent — top of mind for businesses. But smaller, more targeted ransomware attacks can also do considerable damage to small businesses. According to a report from Osterman Research — conducted in June among more than 1,000 small and medium businesses — about 22 percent of companies with less than 1,000 employees that experienced a ransomware attack in the last year had to stop business operations immediately. About 15 percent lost revenue. On average, small companies lost over $100,000 per ransomware incident due to downtime. For one in six organizations, these attacks caused 25 hours or more of downtime. Adam Kujawa, head of malware intelli- gence at security firm Malwarebytes, which sponsored the report, said small businesses are particularly impacted by these events. "A large organization like Target could bounce back from a ransomware attack, but for a very small one, where all the information is lost, it's a lot harder for them to [rebound]," Kujawa said. Personal information from customers and financial data stored on computers that aren't backed up can be lost when ransomware strikes. Some companies also face fines from the government if data is breached and leaked online. Adobe was fined $1 million for a 2013 data breach last year. Large corporations experienced finan- cial loss in the wake of the global Wanna- Cry and NotPetya cyberattacks, too. For example, FedEx's TNT shipping unit was hit with NotPetya malware in July. FedEx said the impact of the cyberattack "will likely be material," indicating it will have a financial impact on its bottom line. The company said it won't be able to fully restore all systems impacted by the virus. Ransomware can get on people's com- puters in different ways such as clicking on a bad link in an email or downloading something with a malicious code. "Our operating systems and our com- puter technology has evolved a lot over the last 10 years," Kujawa said. "The attacks aren't necessarily against computer vs. computer anymore; it's the cybercriminals versus the user. And human vulnerabilities are something you can't patch." n I M A G E | C N N Jose Ramirez says lender reluctance for funding condominiums prompted him to seek financing alternatives for his downtown condo project at 289 Asylum St. (right).

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