RBS’ building sale highlights a revival
STAMFORD — In June 2018, 600 Washington Blvd. went up for sale as its landlord reeled from years of losses and downsizing. Today, the layoffs have abated, and a new owner has made a ninefigure investment.
Royal Bank of Scotland closed this week on the $163 million sale of the approximately 450,000square-foot building, marking the city’s largest real estate deal this year. The transaction also shows how 600 Washington and the neighboring office complex at 677 Washington Blvd. — two of the area’s most prominent corporate addresses — are moving past the instability that has plagued them in recent years to gain the confidence of new investors and tenants.
“600 Washington is a tremendous building — a strong asset that, from an infrastructure perspective, is effectively unmatched in the area,” said Robert Andrews, regional director for 600 Washington’s buyer, Philadelphia-based Rubenstein Partners. “On top of that, we think Stamford is a great location. It’s a place where employers want to be, and there’s a lot of talent clustered in the downtown, around the train station and right off (Interstate) 95.”
Turnaround on Washington Boulevard
RBS completed the sale almost exactly a year after it announced that it was offloading the approximately 12-story office tower, which opened in 2009. The steel-and-glass structure houses RBS’ regional headquarters, which focuses on sales and trading, as well as local offices for UBS, Bank of America and Citizens Bank.
“I think this deal speaks to the validity of downtown Stamford,” said Cory Gubner, Stamford-based executive managing director for commercial real estate firm Newmark Knight Frank. “And it’s not just around the train station — I think all of the downtown is thriving right now.”
RBS’ decision to sell, but stay at 600 Washington as tenant for the next 12 years, fit into a cost-cutting plan for a firm whose chronic instability since the 2008 financial crisis led to about 750 Stamford layoffs between 2015 and 2018.
Between 2008 and 2016, the Edinburgh, Scotland headquartered company incurred nine consecutive annual losses. The company bounced back with profits in 2017 and 2018.
Regulatory punishments have also hamstrung the bank.
In May 2018, RBS agreed to a $4.9 billion settlement with the U.S. Department of Justice to resolve an investigation into the bank’s sale and underwriting of mortgagebacked securities in the lead-up to the financial crisis.
Among other cases, the bank reached in 2016 a $120 million settlement with the state tied to its oversight of mortgagebacked securities. It represented the largest penalty against a company in the state’s history.
In the past year, RBS’ headcount at 600 Washington has stabilized, at about 500 employees. The bank has not reported any Stamford layoffs to the state Labor Department since June 2018.
The recent revival of 677 Washington has further bolstered the city’s corporate prospects. For several years, the property had languished as Stamford’s largest office vacancy after Swiss banking giant UBS transferred its own reduced Stamford operations to 600 Washington, from the office tower and pavilion at 677 Washington.
In March, WWE announced that it would relocate its headquarters from the city’s East Side, at 1241 E. Main St., to 677 Washington, by early 2021. WWE will use the entire pavilion for production operations and also occupy four floors in the office tower.
WWE now uses about 92,000 square feet at its main offices in the “Titan Towers” complex that it owns at 1241 E. Main St. Overlooking I-95, the property has served as the WWE’s headquarters since 1990. About 500 employees work there.
“We’ve been headquartered in Stamford for over 30 years, and we love being a part of Stamford,” said Stephanie McMahon, WWE’s chief brand officer. “We’re excited about moving, and we only want to deepen our engagement with the community here, as well as globally.”
Professional-services firm KPMG plans to relocate its Stamford offices later this year to 677 Washington, from 3001 Summer St. The company will take about 40,000 square feet at its new address, several commercial real estate firms have reported.
Architectural firm Perkins Eastman opened offices last October, on the building’s ground floor.
Including the current and incoming tenants, nearly 75 percent of 677 Washington is leased.
“I see this area as becoming a hub and link to the downtown,” said Mark Creedon, co-managing principal of the Perkins Eastman office. “I think we’ll see more diversity of tenancy in the building. It’s a great place to be.”
Sustained growth
Amid the changes at 600 Washington and 677 Washington, many other major companies are expanding or coming to Stamford.
Adjacent to the downtown Metro-North Railraod station, cable-andinternet giant Charter Communications is
building a new headquarters at 406 Washington Blvd. Originally planned as one 500,000-square-foot building site, the company gained zoning officials’ permission in April to construct a second structure on the property.
Last December, jobsearch firm Indeed announced it would add another 500 jobs in Stamford, following a separate announcement for 500 new positions that was made in July 2017. It is based in downtown offices at 177 Broad St.
Other state-backed expansions in Stamford were announced last year by IT consulting and research firm Gartner, professionalservices firm PwC, realityshow producer ITV America and genomictesting firm Sema4.
More arrivals are on the way. Earlier this year, beverage giant Diageo announced
in April that it would open satellite offices next year in the downtown, at 200 Elm St., alongside the move of its North American headquarters from Norwalk to Manhattan.
The city’s vacancy rate remains high — running at 32 percent in the past quarter, compared with 27 percent for all of Fairfield County, according to NKF. But the likes of Gubner are sanguine that the downtown’s attractiveness would generate more activity to help fill the empty spaces.
“I think things will continue to be good, and deals will continue to be announced,” Gubner said. “I think more tenants will come than go, and we’ll see office buildings continue to trade at good numbers. There are good fundamentals in Stamford, and tenants and investors are noticing.”