HARTFORD — In the aftermath of the pandemic, downtown Hartford’s largest commercial landlord faces a foreclosure of one of the city’s most iconic office buildings, the Stilts Building at 20 Church Street.
An affiliate of Shelbourne Global Solutions LLC of Brooklyn, New York, has made $31 million in loan payments for the distinctive 23-story tower since February, according to documents filed by lender Wells Fargo in late June. have not done
The foreclosure is in its early stages and may still be avoidable, but it is an early sign of the possible shakeout that COVID-19 could bring to the city’s downtown office market. As employees are working from home more and more, businesses need less space.
Uncertainty about the future of office rentals extends well beyond Hartford to markets large and small across the country, experts say.
Shelbourne managing member Ben Schlossberg said Monday that tenants are shrinking office space leases at 20 Church as well as other marquee towers downtown as a result of the emergence of the hybrid workspace era. The ‘Upward Hartford’ innovation space is still a prime tenant, but closed at the worst of the pandemic.
“Shelbourne has been working diligently with lenders and servicers to find and resolve a solution to this problem,” said Schlossberg. “We are confident that we can stabilize and strengthen this asset.”
Schlossberg said he expects a resolution on loan refinancing “relatively soon.”
“Shelbourne is fully committed to Hartford and the various other projects they are working on,” said Schlossberg.
Court documents show that 20 churches have about $26 million in outstanding loans dating back to 2013. The loan will mature in April 2023 for him, documents show.
Schlossberg said Shelbourne had reported a problem for a lender at 20 Church months earlier, but the loan had to go through a foreclosure process.
Schlossberg estimates vacancy at less than 20% for the 420,000-square-foot tower with two-story lobby on the corner of Church and Main. Shelbourne is actively moving into leases, with 1 tenant (a new downtown tenant) signing on Monday and high-level negotiations with his 2 other tenants underway. He declined to identify a tenant on Monday.
20 Church was Shelbourne’s first acquisition in downtown Hartford in 2014. Since then, the real estate investment firm has acquired nearly all of 100 Pearl Street, north of historic Platte Street, and partnered in the acquisition of One Financial Center. building. “
Shelbourne has also emerged as a major developer in Hartford as part of a partnership to redevelop former office space on the upper floors of the Platt into apartments, and now has part of the Fuller Brush factory in the North End. Seeking to convert to rental.
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Both of these projects include millions of dollars in state taxpayer-backed loans from the Metropolitan Regional Development Authority committed to them. Less than two weeks later, the state bond board approved her $5.5 million for the factory project.
Schlossberg and the CRDA said Monday that whatever the outcome of the loan refinancing to 20 Church, it will be a separate legally separate entity within its own “LLC.”
CRDA Executive Director Michael W. Freimuth said in an email:
Freimuth said the commercial real estate problem is mostly focused on offices and not apartments.
Schlossberg noted strong retail rentals along Pratt Street and strong interest in apartments available this fall.
“I wouldn’t say the city’s office rentals are great right now, but they’re not,” says Schlossberg. “But we think our building is competitive enough. The office market will come back when the impact of COVID starts to wane a bit.”
Kenneth R. Gosselin can be reached at [email protected].