Tongues were wagging in real estate circles last year after Building & Land Technology suggested it may have landed a platinum tenant for its Harbor Point development in Stamford.
As it turns out, CEO Carl Kuehner III may be courting deep-pocketed and Greenwich-centric hedge funds.
Silver Point Capital, a major fund based in Greenwich, has inquired about taking a large block of space at Harbor Point, according to multiple real estate professionals. While Silver Point has yet to make any commitment to relocate or expand at Harbor Point as the markets passed through their nadir, its interest is a welcome development for Building and Land Technology, with BLT needing an anchor tenant to justify the upfront costs of completing the two initial office buildings at Harbor Point, whose steel skeletons are currently in place.
Currently based at 2 Greenwich Plaza in Greenwich, Silver Point focuses on credit and equity deals in companies under financial duress, often in syndicates of other investors. A company relocation would give Stamford a second major hedge fund in addition to SAC Capital Advisors, which occupies a building in a leafy campus along Long Island Sound.
At deadline, a Silver Point spokesman could not be reached for comment, and Kuehner did not immediately respond to a request for comment.
An earlier Silver Point deal failed to work out, said Jeff Gage, a managing principal in the Fairfield office of Cresa Partners, speaking at a Construction Institute meeting late last month in Bridgeport. He said hedge funds operate by their own calculus: “(Hedge funds) don”™t seem to have a (rental) budget, or batteries in their calculator.”
For most companies, the math still adds up in Stamford”™s favor when it comes to office lease rates. Whereas downtown Greenwich”™s two-dozen topmost-tier offices commanded $78 in rent in the first quarter on average, those in downtown Stamford drew just $39 according to CB Richard Ellis, a brokerage company with a Stamford office.
At the same time, companies may never get a better shot at getting a tony Greenwich address ”“ the availability rate of offices there is approaching 17 percent as hedge funds have yet to resume the explosive growth they displayed in the last business cycle. By comparison, downtown Stamford had an availability rate of 20 percent.
If Harbor Point offers the advantages of proximity to a major rail station, waterfront views and a quality landlord, it is not the only available space in Stamford by a long shot. Brokers expect leasing activity to begin soon at Financial Centre, the former General Reinsurance Corp. headquarters at 695 Main Street; and the former headquarters of Time Warner Cable is also available at Harbor Drive heading out toward Shippan Point.
“It”™s a great park ”“ beautiful, probably the best views in the market,” said Michael Siegel, executive vice president of CB Richard Ellis. “It”™s going to take a tenant who is interested in something different.”
With the exceptions of SAC and Westport-based Bridgewater Associates, Connecticut hedge funds have largely been in lockstep to date when it comes to office locale ”“ only Greenwich will do. Silver Point has plenty of company there, including Tudor Investment Corp., ESL Investments, Viking Global Investors, Shumway Capital Partners, and AQR Capital Management and Lone Pine Capital.
Lone Pine inked an expansion lease for 38,000 square feet recently at 2 Greenwich Plaza, according to RHYS Commercial Real Estate
If BLT ultimately does not serve up a major hedge fund like Silver Point to take a centerpiece lease at Harbor Point, Kuehner nevertheless appears to be setting the table for a major tenant ”“ and possibly one from outside Stamford.
“Carl always does manage to pull something out of the woodwork,” Gage said.
