Minority interest in Merritt 7 sold
Fairfield Investors Inc. has sold its minority stake in Merritt 7 Corporate Park in Norwalk, at 1.4 million square feet the second largest multi-tenant office complex in Fairfield County.
Clarion Partners said it acquired the interest on behalf of a pension fund, whose identity it did not immediately disclose. In past documents, it has stated that Merritt 7 has been owned by a joint venture between Fairfield Investors and the New York State Teachers”™ Retirement System, with ING Clarion acting as an investment adviser to the latter.
The companies did not state financial terms of the transaction. Clarion Partners manages more than $22 billion in private equity real estate in the Americas on behalf of institutional investors. The company is in the process of a management-led buyout from ING Group, backed by Lightyear Capital.
Merritt 7 includes six office buildings that serve as a major site for GE Capital and as headquarters for several other companies, including FactSet Research Systems Inc. and Emcor Group Inc.
The only larger complex in Fairfield County is R.D. Scinto Inc.”™s Enterprise Corporate Park in Shelton; also totaling in excess of 1 million square feet are Matrix Corporate Center in Danbury, The Towers in Norwalk and Berkshire Corporate Park on the Bethel-Danbury line. New York City-based RFR Realty L.L.C. owns multiple office buildings in Stamford, several interconnected, totaling 1.8 million square feet of space.
Boston-based Marcus Partners is assuming management and leasing of Merritt 7 from its offices in Norwalk, replacing Albert D. Phelps Inc., which originally developed Merritt 7.
JoAnn Brennan-McGrath, who in the past has served as a spokeswoman and leasing agent at Albert D. Phelps, could not confirm the transaction or otherwise provide comment after being reached at deadline. The company”™s CEO is John Crosby.
Paul Marcus, CEO of Marcus Partners, called Albert D. Phelps a visionary in developing Merritt 7 in the 1970s and 1980s.
“He really had vision when he created this whole marketplace,” Marcus said.
In the past decade, Building and Land Technology developed The Towers complex just south that drew major tenants like Xerox Corp., Diageo North America and GE Capital, and is now building off that success in Stamford with its Harbor Point mixed-used neighborhood.
Marcus Partners itself has an ownership interest in multiple new office buildings just north that are now the home of Sun Products Corp. and other large businesses. The company”™s current portfolio includes nearly 6 million square feet of space in Connecticut, Massachusetts and Florida.
Marcus estimated that Merritt 7 has an availability rate of between 10 percent and 12 percent; brokerage company Cushman & Wakefield calculated a 19.5 percent vacancy rate in the first quarter across all Fairfield County”™s premier class A office buildings in the first quarter, which total 41.2 million square feet of space.
Cushman & Wakefield brokers noted a sharp drop in leasing activity during the first quarter; for his part, Marcus expects the market to pick up.
“Although the economic progress here is slow ”¦ it”™s moving along at a reasonable pace,” Marcus said. “I think that large corporations are actually doing much better than small corporations, and a project and a property like Merritt 7 ”“ that lends itself to that market.
“This is a building that is going to do well given the types of companies that are doing well in this economy.”