Building and Land Technology added a new entrance and lobby to its “building within a building” in downtown Stamford.
With generous availabilities for blocks of class A office space in Fairfield and New Haven counties, it takes a lot more than a new coat of paint to warrant a second look from potential tenants.
Local developers are investing millions in capital improvement projects, adding 21st-century amenities to 1980s-era office buildings, converting office parks into medical offices and repositioning an industrial property into trendy open-floor plan workspace.
After leasing 120,000 square feet to Deloitte at the former Gen Re headquarters at 695 East Main St. in downtown Stamford in 2014, Stamford-based developer Building and Land Technology (BLT) is repositioning the rest of the building as 200 Elm. BLT acquired the property in 2012, two years after Gen Re vacated the 614,000-square-foot complex that was developed decades ago as its build-to-suit home base.
BLT recently rebranded 400,000 square feet of available space as a “building within a building” called 200 Elm, adding a separate 4-story lobby and entrance in the past year. New amenities include an Exhale fitness center, conference center, collaboration areas, a new cafeteria and electric vehicle charging stations. The parking garage roof has been landscaped as a courtyard.
It’s all a response to growing demand for downtown-style amenities, said Ted Ferrarone, BLT’s chief operating officer.
“In terms of a total repositioning, it’s getting a feel for what tenants want today versus 20 years ago,” Ferrarone said.
Another major renovation project is under way at 2187 Atlantic St. in Stamford’s South End, where ownership is upgrading the lobby, entryways and common areas while adding a new fitness center and cafeteria. Newmark Grubb Knight Frank’s Stamford office is marketing 100,000 square feet of available space in the 120,000-square-foot building.
Lack of building updates under previous ownership hurt the prospects for lease renewals in the multi-tenant building, said Tim Rorick, senior managing director for Newmark.
“The prevailing theme in today’s market is you have to be competitive,” Rorick said. “You’ve only got one shot at these tenants when you don’t have a lot of (leasing) velocity, and you want to make a good impression.”
The value-add strategy is popular among investors who buy low-occupancy office buildings with an eye toward the upside rent potential after investing in building renovations, Newmark Managing Director Greg Frisoli said.
“We’ve always found when a building undergoes a renovation, the leasing performance always seems to outpace the market,” Frisoli said.
In downtown Stamford, class A office rents range from high $40s to low $60s per square foot in the current market, depending upon the quality of the building and proximity to the train station, Frisoli said.
‘Industrial Chic’ Comes To Greenwich
Greenwich architect Richard Granoff is spearheading conversion of a former utility building into loft-style offices.
Granoff looked for a decade for a unique building before acquiring 330 Railroad Ave. for an office conversion last spring. Granoff Architects will occupy 8,000 square feet and market the remaining 17,000 square feet to office tenants.
Built by Connecticut Light & Power in 1928, the property has the oversized windows, 13-foot ceilings and exposed beams and ductwork that lend themselves to an “industrial chic” open floor plan layout, Granoff said. Renovations are expected to be completed in early 2017, when 26 employees from Granoff Architects will relocate.
“It’s a combination of an iconic historic structure, a fantastic location with high visibility, and most importantly, just very cool space that you’d see in Soho and cooler neighborhoods,” Granoff said. “In Greenwich, it’s really unheard of.”
In New Haven, Northside Development Co. will launch a $12 million renovation to 195 Church St., the 18-story former New Haven Savings Bank headquarters built in 1974. The 246,495-square-foot tower is 75 percent occupied by tenants including First Niagara Bank and Cogstate. First Niagara sold the building to Northside as it downsized its New Haven presence following its acquisition by Key Bank, which still occupies 30,000 square feet in the building.
To pump up demand for 80,000 square feet of available space, Northside President Paul Denz obtained $12 million in financing from Washington Trust for lobby renovations, tenant improvements and new energy-efficient windows. A 4,000-square-foot conference center and gym will be added, with an eye toward attracting suburban office tenants to downtown, Denz said.
In the suburbs, office buildings with ample parking but limited public transit connections are ripe for repositioning as medical clinics.
BLT recently converted two former General Electric office buildings at 260-292 Long Ridge Road in Stamford into a new medical complex called Long Ridge Health & Science. That strategy paid off with leases to Stamford Hospital, which leased 46,000 square feet for medical offices in 2014. Greenwich Hospital opened a 50,000-square-foot outpatient facility in mid-September.
“The traditional office users are tending to be in more dense, transit-oriented locations,” BLT’s Ferrarone said. “Hospitals are trying to move more services out of the hospitals to off-site locations, and office parks like Long Ridge lay out really well for them.”
Email: sadams@thewarrengroup.com.
