Charter changes Stamford office landscape
Updated 6:18 pm, Friday, October 6, 2017
Stamford is keeping a huge piece of its real estate puzzle.
Charter Communications’ announcement Tuesday it would relocate its headquarters to a new 500,000-square-foot building at the downtown Gateway Harbor Point complex means the city will no longer fret about losing its sole Fortune 100 company. A number of Realtors think the plan would eventually help the city to collect more corporate pieces to fill its many vacancies.
“I think Charter’s plan in the long term will be positive for the city, and ultimately the office-use rates will benefit,” said James Ritman, Stamford-based executive vice president of commercial real estate firm Newmark Knight Frank. “I don’t think it will be immediate. But as people see the construction and then having all those employees working next to the train station, it will make the city more relevant for companies looking to locate here. People want to be around stuff going on.”
Adding to the inventory
Construction by developer Building and Land Technology of the new headquarters at 406 Washington Blvd. would start early next year, with the 15-story building scheduled to be ready for employees in 2019, according to Charter’s plan. It would stand on top of an existing parking garage, adjacent to the downtown Metro-North station.
“BLT was very astute for being fully entitled (with zoning regulations) and having the benefit of the parking structure already in place,” said Ed Tonnessen, executive managing director of commercial real estate firm JLL’s Stamford office. “That allows them to deliver a sizable project in half the time. It’s a huge time saver.”
Charter’s decision constitutes the second blockbuster Stamford office deal in the past year for BLT. This summer, Henkel relocated its North American consumer goods headquarters from Scottsdale, Ariz., to an approximately 155,00-square-foot hub in the downtown BLT Financial Centre, at 200 Elm St. Professional services firm RSM also moved in to offices at the same address this summer, taking about 29,000 square feet.
Stamford Chamber of Commerce President and CEO Jack Condlin described Charter’s announcement as the “best economic development news that Stamford has had since Bridgewater made the announcement three years ago that they were not going to move to Stamford.”
Westport-based hedge fund Bridgewater announced plans in 2012 to build a $750 million headquarters on a BLT-owned peninsula in the South End. But the proposal would be jettisoned a couple of years later after intense opposition from community members who viewed the site as poorly suited for a corporate hub.
Big holes to fill
While Charter’s move would offer a boon to BLT, it would not solve Stamford’s proliferation of vacancies, which account for about 30 percent of the city’s total office inventory, according to several measures.
Temporarily, the plan might exacerbate the surplus of space because it would strip the company’s current home at 400 Atlantic St. of its largest tenant. Charter occupies some eight floors there in a 15-story building covering about 500,000 square feet.
Reflecting the uncertainty in the past few months about Charter’s future, the appraised value of the loan for the building has recently sunk by some $146 million, according to mortgage-tracking firm Trepp.
“After Charter leaves, there would be a major repositioning involved for that building, including common areas and amenities,” Tonnessen said. “But 400 Atlantic St. is still a terrific asset. It has ‘good bones’ in a great location.”
Charter’s decision also spells continued idleness for 677 Washington Blvd.’s approximately 700,000-square-foot complex, which stands as the city’s largest empty office hub. Former tenant UBS last year moved its reduced local operations across the street to 600 Washington Blvd. But the property still remains desirable, according to Realtors.
“For 677 Washington, short of landing Charter, this is the best thing that could have happened,” Ritman said. “It shows right next to the train station is where companies want to locate. I think it signals that 677 Washington is going to be the next big block of space taken if somebody wants to be near the train station.”
BLT, meanwhile, still needs to fill large swathes in its existing office buildings. Its approximately 470,000-square-foot property at 1 Elmcroft Road, also known as Silicon Harbor, lies vacant except for BLT’s own offices there. The complex formerly housed the headquarters of technology company Pitney Bowes, which relocated a couple of years ago to 3001 Summer St.
A mile and a half away, the nearly 600,000-square-foot BLT Financial Centre still operates only about half full, even after the arrival of Henkel and RSM. Professional services firm Deloitte, the other tenant, occupies about 120,000 square feet.
“With the vacancies, we’d be adding 500,000 square feet that we sort of don’t need on paper,” said Christian Bangert, executive vice president of Stamford-based commercial real estate firm Rhys. “But I definitely think Charter’s plan is more of a pro than con. It would show landlords of buildings sitting there and getting older that this is what a state-of-the-art building looks like. They would have to update their own to offer other good products for the market.”
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