KS Partners Buys New Boston’s $65M Hartford-Area Office Portfolio
By Scott Baltic, Contributing Editor
New Boston Fund Inc., of Boston, has sold to KS Partners, of Woburn, Mass., an eight-building office portfolio in suburban Hartford, Conn., for $65 million, both companies announced yesterday. The properties, in Rocky Hill, Conn., total 620,000 square feet in two office complexes, Corporate Ridge and I-91 Tech Center.
The transaction reportedly is the largest suburban portfolio sale in Central Connecticut since New Boston purchased this portfolio through its Fund V in November 2000.
It’s also KS Partners’ largest acquisition to date and brings its roster of properties owned to more than 2.8 million square feet. The buyer made the acquisition in a joint venture with a New York-based, multi-billion-dollar multi-strategy investment firm. KS Partners has purchased more than eight buildings from New Boston Fund over the past 10 years.
“A significant pricing inefficiency currently exists for suburban office properties, and interest rates are at historic lows, making this an opportune time to buy,” said Kambiz Shahbazi, KS Partners’ founder and president. “This off-market opportunity to acquire a portfolio of prominent properties at well below replacement cost will allow KS Partners to realize strong current returns on its investment, while having the potential for substantial long-term value appreciation.”
Corporate Ridge consists of three Class A office buildings, 500 Enterprise, 55 Capital Boulevard and 175 Capital Boulevard, totaling 507,000 square feet. The five single-story buildings at I-91 Tech Center total 113,000 square feet and consist of office and flex space.
The portfolio is 87 percent leased to tenants that include Nationwide Insurance, AT&T, United Healthcare, MetLife, the American Cancer Society, Liberty Mutual, Verizon, Zurich Insurance, URS Corp. and AspenRe.
New Boston was represented by John McCormick, Patrick Mulready and Michael Puzzo of the Hartford Office Leasing and Investment Properties Team at CBRE/NE, as well as Jeffrey Dunne of the New York Capital Market Team.
Sally Michael, a partner at Saul Ewing LLP, served as KS Partners’ attorney for the purchase, while Mike Marcone of Marcone Capital arranged financing, which was provided by Barclays Capital of New York.
Mark Bates, managing director of Integra Realty Resources – Hartford, told Commercial Property Executive that while the overall average suburban Hartford office vacancy rate is about 16 percent, vacancies in the southern submarket, where Rocky Hill is, are in the 20 percent range.
Although the suburban Hartford office market “is not bleeding as much as it was,” Bates said, “absorption has been anemic over the past 12 months.” Between the still-unsettled economy and the imminent election, Metro Hartford’s office tenants, he said, are “in a holding pattern.”