Zell/Merrill Lunch buy office building in CT

Real Estate Weekly, Dec 11, 1991

Zell/Merrill Lynch buy office building in CT

Zell/Merrill Lynch Real Estate Opportunity Partners II, a real estate investment fund with more than $400 million in equity, has purchased the 162,000 square foot office building at 2 Trap Falls Road in Shelton, Connecticut. The acquisition was the first for Zell/Merrill Lynch II, a real estate investment fund of Sam Zell's organization. Zell/Merrill Lynch I recently completed its final investment.

Jeffrey Dunne and James Fagan, first vice presidents and investment sales specialists in the Stamford, Connecticut office of CB Commercial Real Estate Group, Inc., were the sole brokers in the $5.25 million all cash sale transaction.

"We are very confident in the future of the Shelton area and the Route 8 corridor," said Brian Lipson, vice president, Acquisitions/Northeast at the Zell Organization. "We are opportunity driven investors who were willing to make a significant, long term investment in a submarket that we feel will perform well," he said.

"Zell's investment in Fairfield County illustrates the growing interest in commercial real estate in this area on a national level," said Jeffrey Dunne, firsy vice president at CB Commercial. "Recent activity in Shelton has fueled investor confidence," he said.

According to CB Commercial market data, Shelton has accounted for nearly half of the net absorption of office space in Fairfield County this year. The Shelton office vacancy rate has dropped more than 30 percent in 1991, from 28 percent in January to 20 percent at the end of the 3rd quarter.

Recent leasing efforts by CB Commercial at 2 Trap Falls Road have brought the occupancy rate of the building to 40 percent. According to Ray Taylor of CB Commercial, leases have been signed in the pastthree months for more than 40,000 square feet of office space CB Commercial will continue to manage and lease the building for the new owners.

The 160,000-square-foot office building at 2 Trap Falls Road was constructed in 1986. After having been sold in 1989 the property was foreclosed on by Trap Falls Development Corp. in early 1991.

The new owners will make significant cosmetic and capital improvements to the facility, said Lipson. "We are encouraged by the commitment of the Shelton community to create a hospitable environment for business. And we are committed to the substantial capital investment necessary to address the challenges ahead in enhancing and maintaining this valuable asset," he said.