The Matrix Corporate Center has washed the veneer from the former Union Carbide headquarters inside and out and has built a strong leasing operation with plans for amenities, hospitality and growth.
“This is the property that dominates the Danbury market on sheer size,” said Tom Pajolek, senior vice president of CB Richard Ellis Brokerage Services in Stamford. “Now, also with the offerings that Matrix has assembled, it is the prime class A offering in town with a high level of service that really puts it out front. The amount of space they have been able to lease in their first year speaks really well to their commitment to the property and that tenants can really live and thrive there. It”™s a very exciting project; they”™ve really created a market in and of itself.”
The building contains 1.3 million square feet of office space, the majority of which is elevated by 5,000 columns that surround the complex, located on 100 acres.
“It consists of 15 interconnected office buildings that vary in size from 10,000 square feet of floor to 20,000,” said Aaron Smiles, director of operations and development for Matrix.
The building was taken over by Dow Chemical from Union Carbide soon after the Bhopal disaster in India, in 1984. The building, which cost nearly $190 million to build in 1980, sold to New York City-based Grubb & Ellis for $80 million in 2007, and then to Smithtown, N.Y.-based Matrix Real Estate Group in 2009 for $73 million.
“We are the single largest office building in the state of Connecticut,” said Smiles.
Matrix bought the building with its two anchor tenants, Boehringer Ingelheim and Praxair in place. Together the two tenants take up more than 500,000 square feet of the building. Smiles said Matrix immediately began to engage in a $10 million renovation of the property, which is ongoing.
Honeywell Consumer Products also held space in the building when Matrix took over and continues to do so with about 70,000 square feet.
Since Matrix bought the property, it has leased 140,000 square feet of space, pulling tenants like Guideposts and General Motors Corp., both of which came over the border from New York.
Leroy Diggs, the general manager of the center, said where the previous owner had shown plans of its ideas for the property, Matrix began to roll out its vision with the goal of attracting the tenants through its own initiatives.
“It”™s a matter of fact that neither Guideposts nor GM would be here unless Matrix had actually started the renovations,” said Diggs. “Boehringer Ingelheim and Praxair may not have stuck around either. Seeing the vision for the property made a lot of difference.”
The $10 million renovations have included an entire aesthetic rework, addition of new heating and ventilation units and 350,000 square feet of solar panels that are being installed through this summer.
In the last year space has also been leased in the complex to companies with varying size needs including Armor All”“STP Products Co., Idelle Management Co. and Nukem Inc., which markets uranium for commercial nuclear power plants. Smiles said Matrix is focusing leasing efforts on large-scale users of 40,000 square feet or more.
“Based on the leasing activity we had in 2010, there has been a tremendous amount of overflow into this year,” said Smiles. “We have multiple deals that are going to be finalized in the next couple of weeks, which include a daycare center that will service the other tenants with 10,000 square feet.”
Smiles said Matrix has been able to encourage a strong and competitive environment for real estate brokers. He said almost all the leasing has been done through brokers. “We pay full commissions,” he said.
Smiles said the corporate center is at about 75 percent occupancy.
“By the end of 2011 we will be over 80 percent, but that number could be higher,” said Smiles. “With a space like this, every time you nudge the meter, you”™ve leased a lot of volume and it moves in a big way.”
Smiles said Matrix is in talks with a law firm interested in taking about 100,000 square feet of space.
“If we can hit some additional big users we could be 90 percent occupancy in the year,” said Smiles. “For medium to large companies, every deal that comes through Danbury sees this building.”
Guideposts, a nonprofit publisher of faith-based magazines, has sold its headquarters building in Carmel, N.Y., and is entering its 60,000 square feet of space in the Matrix Center this week.
General Motors, which signed its lease Nov. 7, moved its Northeast regional sales department to the property from New York, where it held space in the Pepsi building in Somers, N.Y., a property owned by Murray Hill Properties L.L.C. of New York City. The bottler plans to lease the half of the building vacated by General Motors.
According to Smiles the building offers space at $24.50 a square foot, plus electric.
“This building has a lot of potential especially to the New York prospective (customer),” said Smiles. The building is off of Exit 1 on I-84, one of the closest exits to the New York border. “Real estate taxes are only $1 per square foot here; in New York a typical office building has a real estate tax of $7 to $10 per square foot. It”™s a real bargain.”
Andrew Dansker, managing director of Matrix, said the company also has focused on building a stable of amenities.
“We have a barber, dry cleaner, bank, a coffee shop, fitness center and a car wash all in the building,” said Dansker. “Most buildings couldn”™t handle that, but we have the space; that gives us a lot of ammunition for leasing. You never know which of these things is going to strike somebody”™s attention and resonate with a prospective tenant. It gives us a very effective shotgun approach.”
The five-story building has 1 million square feet of covered parking, a full auditorium and multiple conference rooms, cafeteria and dining hall. Matrix has developed a catering business, which has already begun to take on weddings and other large events.
The center has sold 25 acres to the Horsham, Pa.-based Toll Bros. residential developers, which have begun a community of 1,000 residential units priced from $400,000.
Smiles said Matrix is also negotiating with a medical group interested in constructing a separate 100,000-square-foot building for medical suite space on the property.
Smiles said despite concerns about tax increases on the state level, Danbury Mayor Mark Boughton and the Danbury Chamber of Commerce have been instrumental in creating incentive packages to attract businesses.
“We really have the ability to expand beyond our space,” said Smiles. “The demographics are here.”
