Investors
In an interview Monday, Lazowski and Kenny declined to disclose what they paid, but they noted the four buildings — three of which were recent conversions from vacant buildings and encompass a total of 554 rentals — are now valued at $100 million.
Lexington Property Management, jointly owned by Kenny and Lazowski, will take over the management of all four buildings.
“Obviously, we are extremely bullish on downtown, extremely bullish on Hartford in general,” Lazowski said Monday. “It had great momentum pre-pandemic. We have to work a little harder, but hopefully, it’s going to come roaring back as soon as there is a vaccine and more people are getting it.”
Girona and partner Wonder Works Construction and Development Corp. of New York took on their first project in Hartford nearly a decade ago, converting the decaying Sonesta into rentals. In the years that followed, the team emerged as key players in the redevelopment of downtown Hartford, always maintaining with each new apartment project the demand would be there for new apartments.
Ravetz said Monday he remains upbeat about Hartford’s prospects in the longterm, but there was too much uncertainty in the near future.
“What was clear to me was that, in the big picture, nothing that I ever felt about what we had accomplished, what we were doing, what was happening in Hartford had changed.” Ravetz said. “But in the short run, I wasn’t clear on how things would go. And it just highlighted for me the assets really needed local attention.”
The recent conversion of 101 Pearl proved particularly challenging because of cost overruns and delays, with the units hitting the market just as the pandemic struck,
slowing the expected leasing trajectory. Sources familiar with the downtown market also said Ravetz was juggling other projects outside of Hartford, needed to raise capital and this was the route he decided to take.
Wonder Works chief executive Joseph Klaynberg will retain his 50% interest in the buildings.
Lazowski said the apartment buildings all were attractive, with three having occupancies above 90% and are built out with a wide range of amenities, a competitive flashpoint for renters in today’s market. They range from a basketball court at Spectra Plaza to a different amenity on every floor at 101 Pearl such as a bocci court and virtual sports.
Lazowski said 101 Pearl’s occupancy stands at 78% even though it started leasing just as COVID-19 hit in the spring.
Kenny said those occupancies show people do want to live downtown. But the challenge ahead will be injecting new life into retail spaces, coming out of the pandemic. Stores and shops downtown have suffered with few workers in office towers during the pandemic, but retail leasing was weak before COVID-19.
“It can’t just be live, it’s also got to be work and play,” Kenny said. “The retail has to be the catalyst for that.”
Kenny said landlords have to be creative about how they lease, perhaps encouraging more pop-up shops to test interest and maybe
offering rent structures that call for a percentage of revenue.
The pandemic, Kenny said, has taken a toll of “feet on the street” and it will take not just landlords but a combined effort of city and state governments plus the private sector to not only recover from the pandemic, but make new gains.
“At the end of the day for all these projects, the residential is the economic engine, but in order to make that succeed, we have to focus on making retail attractive to make people really want to be there,” Kenny said.
WhenRavetz approached Lazowski and Kenny about a deal, they were familiar with three of the buildings. Lazowski and Kenny had once owned and hoped to convert 101 and 111 Pearl themselves, later selling them to Ravetz and Klaynberg.
Kenny built Spectra on the Park — then Trumbull on the Park — which opened in 2005.
Lazowski and Kenny have partnered with Shelbourne Global Solutions LLC, of Brooklyn, N.Y. on ambitious $100 million redevelopment of much of the south side of Pratt Street. In addition, Lazowski jointly purchased downtown Hartford’s iconic One Financial Plaza, the “Gold Building” with Shelbourne in 2019 for $70.5 million.