“Distressed” Office Tower Sold For $11M

Fusco has sold a financially distressed 15-story office tower and adjacent parking garage on Long Wharf for less than a quarter of their city-appraised values — but still plans on building new waterfront apartments on a separate parcel next door.

The sale involved the Long Wharf Maritime Center at 555 Long Wharf Dr., a landmark waterfront office building that was constructed by the Fusco Corporation in 1985 and that has been owned by that local development company ever since. Fusco’s headquarters remain on the building’s 14th and 15th floors.

According to a ​“limited warranty deed in lieu of foreclosure” that was posted to the city’s land records database on Oct. 16, Fusco Harbour Associates LLC sold the 15-story office tower at 555 Long Wharf and the seven-story parking garage at 585 Long Wharf for $11.1 million to a holding company called 555 Long Wharf LLC.

The city’s tax assessor last appraised the office tower as worth $42.5 million and the parking garage as worth $5.2 million.

The buyer of those two Maritime Center properties is a company controlled by Robert Landino, a Westbrook-based developer who grew up in Beaver Hills and whose father was the city’s top economic development official during Urban Renewal under Mayor Richard Lee. In 2015, Landino’s company constructed 160 luxury apartments downtown at the College & Crown complex as well as the Route 34 West development near Career High School.

The $11.1 million Maritime Center sale comes several months after the Hartford Business Journal first reported that M&T Bank had hired a commercial real estate services firm to sell a $31 million ​“non-performing loan” backed by 555 Long Wharf. The property was not in foreclosure, but Fusco did reportedly owe $31 million on a $40 million loan that had reached maturity.

It also comes three years after Fusco won Board of Alders approval for a Planned Development District (PDD) amendment that would permit the company to construct up to 500 new apartments across two new residential towers at 501 – 585 Long Wharf Dr. According to Fusco Corporation President Lynn Fusco, her company is still moving forward with that residential development plan — which will be located on 501 Long Wharf, a separate property from the office building that is also owned by Fusco.

In interviews with the Independent, Landino confirmed that his company purchased the M&T Bank loan backed by 555 and 585 Long Wharf for $11.1 million and, as part of that purchase, obtained the deed for the property.

“We saw an opportunity to purchase an iconic, New Haven-based asset and following a significant investment, create value over time,” he said.

“Our plans are to make physical improvements to the common areas and building systems and offer high quality, Class A, New Haven based office space with ample off-street parking at attractive rents,” he continued. ​“Amenities include on-site childcare, a fitness center, and plenty of outdoor recreational spaces along the waterfront.”

Landino said that 555 Long Wharf is currently ​“a little less than 40 percent” leased up. 

Asked for his thoughts on why these properties sold for so much less than their city-appraised values, Landino replied, ​“Nationally, office vacancies have dramatically increased largely due to the societal change towards remote and hybrid-remote work environments, which has lessened the need for office space. While this change directly resulted in declining asset values, we are confident that given this property’s location, ample parking, and accessibility, re-investment and patience will result in a successful outcome.”

He stressed that his company plans to keep this building as an office complex — and not convert it into or build nearby any residences.

“Our whole business model is to build a better office tower,” he said about him and his investment partners. He described the Maritime Center building as ​“iconic,” as having great visibility from the I‑91 and I‑95 highways, and as having virtually unlimited on-site parking. He described the ideal outcome as creating ​“a suburban-style environment with a New Haven address.”

Landino also made clear that his company plans to keep this property commercial. ​“We have no current plans to convert the property into a multi-family development as we determined that this alternative is not economically feasible.”

In a separate phone interview with the Independent on Monday, Lynn Fusco described ​“many eras, periods of time and success where [555 Long Wharf] was full or sufficiently leased. We’ve enjoyed every minute of it, and had good tenancy, had a good relationship with the tenants through the years, and enjoyed our relationship with the city in developing this site.”

She said her company decided to sell the complex ​“rather than continuing to pay down a loan that the leasing was just not supporting” due to ​“very few office tenants in the marketplace, because of the pandemic and remote work.”

There’s a lot of ​“distressed” office buildings around the country, she said, in New York City and Chicago and California, in particular. The 15-story office tower at 555 Long Wharf became just that. 

She also noted that, after a 30-year relationship with People’s Bank, which was subsequently acquired by the Buffalo, N.Y.-based M&T Bank, ​“we were not able to come to any kind of agreement with [M&T] about the terms” of the loan.

“It is bittersweet,” she said about the sale of 555 Long Wharf. She said Fusco will maintain offices at the complex, but not in its current space on the 14th and 15th floors.

As for the 500-unit apartment plan for 501 Long Wharf, Fusco emphasized, ​“that’s a completely separate parcel, still owned by the Fuscos,” but with no debt. ​“We have every intent to continue pursuing” a residential development at that location.

This is the second major Fusco building sale in New Haven in four years. Back in October 2020, the company sold the nine-story Temple Medical Center and a portion of the accompanying garage for $21 million to the lab and office developer Winstanley Enterprises.

Fusco urged not to read too much into these sales: her company is not leaving New Haven. With the Temple Medical sale, she said, Winstanley approached her to try to buy that building, and, after negotiations, she ultimately agreed. As for 555 Long Wharf, ​“it’s an older product.” Those are the office buildings that are suffering right now. Newer ones, in New Haven and elsewhere, are doing well. But older buildings are having trouble.

Asked for comment on what this sale means for the future of the Maritime Center and, in particular, for Fusco’s 2021 residential development plan, city Economic Development Administrator Michael Piscitelli said, ​“Maritime Center is one of the premier development locations in New Haven. Fusco’s efforts to revitalize the district with high quality commercial, residential and retail activity are all approved by the Board of Alders. The City has been following the M&T Bank process and will of course look to work with future partners and the community towards implementation of projects consistent with the City’s Long Wharf Plan.”

This is the second time a Maritime Center office building has sold in four years. Back in 2020, the Knights of Columbus purchased the adjacent, nine-story office building at 545 Long Wharf Dr. for $12.8 million – a year after the building went into foreclosure, and over a decade after that building last sold for $40 million.

According to an office directory in 555 Long Wharf’s lobby, some of the business that currently rent space at the building include Accountemps, BioXcel Therapeutics, Duble & O’Hearn Insurance, Fusco Corporation, Hole in the Wall Gang Camp, Marcum LLP, and Medtronic.