The upcoming auction of a Connecticut office complex demonstrates the depths of despair being felt by some landlords in the commercial real estate sector.
The Campus at Greenhill, located at 108 Leigus Road in Wallingford, is set to be auctioned at the beginning of April, the Hartford Business Journal reported. Bidding will commence April 3 on Ten-X, running through April 5.
There’s plenty to like about the modern office building, completed in 2012. The 289,000-square-foot property, owned by Rialto Capital Management, boasts a fitness center, cafeteria and walking paths in a suburban environment. The property could likely support another 31,000 square feet of built space and the property’s broker said Cushman & Wakefield has already fielded more than two dozen inquiries.
But the reality of the property is much harsher, in line with the general shift away from suburban office buildings in a post-pandemic world. Health insurer Anthem Blue Cross Blue Shield signed on for more than 200,000 square feet two years before construction was even completed; it’s down to a meager 48,000 square feet.
There are a few other tenants, but the building is 60 percent vacant. Before the pandemic even muddied the waters, the mortgage holder foreclosed on the property.
Those struggles may hint at why the property could be had for a fairly low price. The town assessor valued the building itself at $18.1 million and the surrounding land at $10.8 million. Yet the listing price is only $2 million.
Cushman’s Robert Motley believes the property will sell far above where the bidding will begin. How much a buyer is willing to bid, however, may depend on their belief in the office market when remote work has become a norm. The property is zoned for other uses, which may be worth exploring.
Office vacancies in the greater Hartford area hit 21.5 percent at the end of last year, according to CBRE. For the year, tenants in the area shed 1.2 million square feet.
— Holden Walter-Warner
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