The Real Deal New York

Starwood relocates to Stamford, other businesses may follow

November 19, 2009 06:20PM
By David Jones

After closing a blockbuster deal to relocate Starwood Hotels & Resorts from its White Plains headquarters to Stamford, Conn., outgoing Stamford Mayor Dan Malloy said the deal may be the first of several announcements over the next few weeks.

“We have deals that could be announced literally any day,” Malloy told The Real Deal.

Connecticut Governor M. Jodi Rell said this week that Starwood signed to relocate its corporate headquarters to a 250,000-square-foot space at Stamford’s new Harbor Point development at 333 Ludlow Street by January 2012. Starwood will team up with its new landlord, Building and Land Technology, to renovate the new space at a price of $40 million.

Starwood will save 20 percent in rent at its new headquarters, but officials declined to comment on specific prices. Existing tenants at the site include Deloitte & Touche and Pitney Bowes. According to a second-quarter report by Cushman & Wakefield, the average asking rent for Class A office space was $48.36 per square foot in downtown Stamford and $38.71 per square foot in the rest of the city.

State officials lured Starwood with an impressive package of incentives, including $75 million in Urban and Industrial Site Reinvestment Tax Credits and a $9.5 million loan from the state Department of Economic and Community Development. In addition, the Connecticut Development Authority is expected to provide up to $5 million in sales tax exemptions on building materials.

Starwood currently operates out of 1111 Westchester Avenue in White Plains, where it subleases 205,000 square feet from Nine West. Starwood also has a direct lease for 118,700 square feet at 1133 Westchester Avenue, according to a Starwood spokesperson.

The deal ended more than 36 months of talks between Connecticut officials and Starwood, which was looking for new headquarters following the expiration of its existing lease in White Plains. Starwood was considering several locations in Connecticut and New York state, according to the Starwood spokesperson.

Starwood has extensive ties with Stamford, as the city is the birthplace of Barry Sternlicht, the founder of the hotel chain. Malloy said that Stamford was in extensive talks with Starwood a decade ago, before it moved to its current headquarters in White Plains.

Malloy said the there are discussions going on with several companies looking to relocate to Stamford, with some of the deals awaiting approval from lenders or their own corporate boards of directors. Malloy said that one of the firms is a prominent financial services firm, which is a major industry in Stamford. He declined to name the firm, or say where the firm is currently based.

The deal could be a boon to the Stamford office market, which has struggled in recent years due to the economic downturn. Manhattan-based developer Aby Rosen took a major hit in Stamford, after gambling on a massive $850 million purchase of seven local office buildings in 2007, when the local market was at its peak.

Peter Duncan, the president of George Comfort & Sons, agreed that the Starwood deal will be a shot in the arm for the Stamford market.

“It can only help,” said Duncan, whose firm owns the High Ridge Park office complex in Stamford.

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