This 34,765-square-foot building at 970 Farmington Ave. in West Hartford is the central structure of the four-building West Hartford Center, which has been sold for over $15.7 million.

A high-water mark has been set in West Hartford as a major downtown shopping center marked the first large sale of the year last week.

CB Richard Ellis-New England announced Monday that it has successfully negotiated the sale of a 63,000-square-foot, four-building retail portfolio comprising the West Hartford Center for over $15.7 million, or about $250 per square foot. Chris Angelone and Bill Moylan of CB Richard Ellis’ Northeast Retail Investment Team and John McCormick and Patrick Mulready of the Hartford Investment Properties Group represented the seller, Federal Realty Trust, in the transaction.

Mercury Ventures and Lexham Realty teamed to buy the portfolio of high-end retail space in the heart of the city of West Hartford, a suburb of the state’s capital.

“For street retail space, West Harford is second to none in the Greater Hartford area in terms of foot traffic and rents that landlords are able to achieve,” said Mulready. He explained that in some areas of the city, rents are as high as $40 per square foot, and there is no comparable market in the area.

“You have to go down to Fairfield County to find something even close to it,” said Mulready. “Obviously, West Hartford isn’t Westport. Down there rents are $100 a square foot. But there was a time not too long ago when their rents were $40, and the new owners ultimately see West Hartford heading in Westport’s direction.”

Mulready predicted that the location will see more of a cache of hot properties over time. A new complex in the development pipeline, which is awaiting regulatory approvals, would include a multiplex movie theater, multifamily luxury rental units and more than 150,000 square feet of office space. Hartford Hospital already has committed to take more than half of that office space.

“There’s definite upside in the market, which is great to see,” said Mulready.

‘A Smooth Transaction’

The West Hartford Center portfolio totals 63,451 square feet in a series of two- and three-story buildings at 967 and 970 Farmington Ave., 1253 New Britain Ave. and 27-43 LaSalle Road. The properties were acquired from Federal Realty Trust for $16.5 million and were financed with $13 million of fixed-rate debt from Banc of America Securities, the holding company of Bank of America.

At the time of the sale, the four buildings were nearly fully leased to tenants such as Blockbuster Video, Cosi Restaurants and Charles Schwab. The price per square foot in the transaction represents a new high-water mark for retail and office property in West Hartford, according to Mulready.

According to offering material distributed by CB Richard Ellis, the properties’ projected 2004 net operating income is $1.3 million, but many of the rents are considered below market, so it could provide upside.

The location on West Hartford’s main streets also means that it is highly unlikely that a developer can come into the town and build a comparable property.

A release from the co-owners said, “The acquisition is an ideal fit for both Mercury, which is based in Greenwich and Lexham, which is based in Stamford.”

The portfolio is comprised of street retail space and second- and third-story office space. The building at 970 Farmington Ave. totals 34,765 square feet, 967 Farmington Avenue is 8,976 square feet, 27-43 LaSalle Road is 9,910 square feet and the property at 1253 New Britain Avenue is 9,800 square feet.

Half of the space is in the center office space. A little more than half of the square footage is in 970 Farmington Ave., which is the central building. It had previously been a movie theater that was converted by former owner Adolph Properties in the 1980s. The building includes ground-floor retail, some underground mall space and second- and third-floor office space. The building at 27-43 LaSalle Road is actually outside the complex and is a free-standing facility with a Blockbuster Video store and a Dunkin’ Donuts, among other tenants.

Mulready explained that the building is nearly 100 percent occupied.

“There are only a couple of very small vacancies,” he said. “Ground-floor retail in West Hartford just doesn’t sit on the market. In fact, we often have tenants looking for space who will approach existing tenants and offer to buy them out.”

The West Hartford Center itself was on the market for a mere six weeks before it sold.

“It was basically a smooth transaction,” said Mulready.

The sale is the third successful joint marketing effort between the Northeast Retail Investment Team and Hartford’s Investment Properties Group; that partnership also transacted the sales of the Charter Oak Mall in East Hartford and the Jordan Lane Shopping Center in Wethersfield. In addition, the Northeast Retail Investment Team recently represented the sale of Konover Construction’s retail portfolio.

CB Richard Ellis-N.E. Partners is a joint venture of CB Richard Ellis and Whittier Partners Group with offices in Connecticut, Massachusetts, Rhode Island, New Hampshire and Maine.

Mercury Ventures was founded three years ago by David R. Jarvis and Malcolm F. MacLean, former executives at the real estate unit of PaineWebber, which has since been acquired by UBS, a leading global financial services firm. Mercury, which operates two private-equity funds, invests primarily in tiny public real estate companies. But it also specializes in property investment, and has acquired or developed some $300 million of properties since its founding in 2000.

This year, Mercury teamed with Radiant Partners to buy the Santa Rosa Mall in Fort Walton Beach, Fla., for $54.5 million.

Marc Lewis, a real estate veteran who previously had been with Deutsche Bank’s mortgage lending operation, heads Lexham Realty. The company this year has invested in some $100 million of properties and plans to double that volume next year. Lexham syndicates its investments to a group of high-net-worth investors. It provides its investors with a 10 percent preferred return, but aims for 12 percent annual yields.

Lexham aims to buy properties in affluent suburban areas, mostly in the large area near New York where barriers to entry are high.