Despite Office Market Slump, 1M-SF Connecticut Office Campus Trades in $72M Deal
- Jun 09, 2009
It’s an office trade of such a size that has not been seen in Connecticut, no less challenged by job losses and economic malaise than most other markets, in quite a while. Matrix Connecticut L.L.C. has just taken over ownership of the 1 million-square-foot Danbury Corporate Center in Danbury, Conn., from GERA Danbury L.L.C. in a $72.4 million merger transaction. The deal is a coup for Connecticut, as well as its neighbors, as it marks the largest multi-tenant office transaction in the suburban New York Tri-State area so far this year.Danbury Corporate Center’s change in ownership, orchestrated by real estate services firm CB Richard Ellis’ New York Institutional Group, comes just two years after GERA, an entity operating under the direction of Grubb & Ellis Realty Investors L.L.C., acquired the property from Sunbelt Management Co. for nearly $80.8 million. Located at 39 Old Ridgebury Rd. on approximately 99 acres just off I-84 in Fairfield County, Danbury Corporate Center was originally developed in 1982 as the global corporate headquarters of Union Carbide Corp. Occupants of the 61 percent leased four-story building include such credit worthy tenants as pharmaceutical concern Boehringer Ingelheim, industrial gases company Praxair and Honeywell. In addition to its Class A office accommodations, the property features an 875,000-square-foot parking facility; conference center; cafeteria; and retail space housing a fitness center, coffee shop, credit union, dry cleaners and barber shop. With an overall vacancy rate of 16.3 percent, according to a first quarter report by real estate services firm Cushman & Wakefield, Fairfield County’s office market is struggling, but the climate in Danbury, as indicated by the relatively low occupancy level at Danbury Corporate Center, is even more harsh. In the first quarter, Greater Danbury recorded an overall vacancy rate of a whopping 20.4 percent. Matrix plans to institute upgrades in an effort to attract more office-dwelling businesses that, in the midst of what is surely a tenant’s market, are presently in a position to get more bang for their buck. With a completely empty development pipeline, the new owner may be able to bring the tenant roster to maximum capacity when the much-anticipated economic recovery begins to replenish the job market. As per the Cushman & Wakefield report, Fairfield County’s real estate market is expected to begin to turnaround in 2010.