Advocate site might be bellwether - Westfair Communications

With Tribune Co. finding a buyer for the Stamford Advocate, real estate brokers say the Chicago conglomerate is expected speedily to sell off the newspaper”™s plum office property near the Stamford train station.

The real estate sale could serve as a referendum of sorts on the state of the commercial real estate and construction market, with the blockbuster sales of the first half of 2007 now tempered by the recent crunch in the credit markets.

After a $73 million sale to Gannett Company Inc. was scotched last spring by a newsroom union, Tribune is now selling the Advocate and its Greenwich Time sister daily to Hearst Corp. for $64 million, with MediaNews Group to manage the newspaper operations.

Tribune did not include in the deal the Stamford Advocate”™s office building at the corner of Tresser and Washington boulevards, across the street from UBS AG”™s massive Stamford complex, and next to the Royal Bank of Scotland building under construction next to Interstate 95.

The newspaper moved into the low-slung building at the start of the 1980s.

The smaller Greenwich Time offices are located at 20 East Elm St. in Greenwich, just off trendy Greenwich Avenue.

Whereas Greenwich”™s strict zoning history likely limits the value of the Greenwich Time”™s building, the Stamford Advocate sits squarely in what has proven to be one of the hottest real estate zones in the Northeast.

The question becomes whether the newsroom”™s interference in the Gannett deal may have knocked millions of dollars off any deal for the Stamford property. When Tribune reached the Gannett agreement last March, New York City-based RFR Holding was in final negotiations to purchase seven Stamford office buildings for $850 million, paying roughly $500 per square foot.

While class A office building sales continue to fetch high premiums, real estate brokers whisper that debt-laden construction deals are unlikely given the tremors in the credit markets since July when investors began learning the extent of mortgage portfolio exposure at major lenders.

Any de facto moratorium on new construction could, in turn, gouge the value of the Stamford Advocate”™s property, whose proximity to the Stamford train station makes it most valuable as the site for a high rise like the UBS or RBS properties. The city has been counting on developers to create large blocks of space near the station to help attract major corporate relocations and expansions by New York City firms.

Brokers suggested a swift sale might help Hearst head off the effects of further turmoil in the credit market.

However the real estate market turns, the Hearst transaction turns the page for the Advocate, which traces its history to the early 19^th century.

Hearst owns the Danbury News-Times, while MediaNews owns the Connecticut Post in Bridgeport. Hearst also co-owns New England Cable News, a Needham, Mass.-based all-news channel that is carried in Fairfield County by Cablevision.

The newspaper consolidation in southeast Connecticut prompted a statement by state Attorney General Richard Blumenthal that he would probe whether the deals might impact advertising rates. The U.S. Department of Justice recently concluded an antitrust investigation into Hearst”™s acquisition of a 30 percent stake in MediaNews, its primary rival in the San Francisco area.

For the six months ending in September, the average total paid circulation for the Stamford Advocate”™s daily edition dropped 1.8 percent to 23,440 subscribers, according to fresh figures from the Audit Bureau of Circulations. That was less than the average drop at dailies nationally of 2.6 percent.

The Greenwich Time notched a small gain in paid subscribers.

Paid circulation for the Advocate”™s ad-stuffed Sunday edition, meanwhile, fell 4.7 percent to 25,625 subscribers, steeper than the 3.5 percent average Sunday decline countrywide.

The Advocate reported last week that Hearst and MediaNews are cutting 13 employees from the newspapers”™ newsroom, in addition to the layoff of 55 press and packaging employees the companies disclosed in October.