Anthem Blue Cross in Connecticut Leases 218,000 SF at Would-Be Home of Failed Mortgage Lender

September 14, 2010
By Barbra Murray, Contributing Editor

The Campus at Greenhill in Wallingford, Connecticut, a nearly completed 300,000-square-foot office building that had been slated to become the new home of the now-failed Mortgage Lenders Network USA Inc., lands a big fish to occupy two-thirds of the property. Anthem Blue Cross and Blue Shield in Connecticut has signed a 10-year lease agreement with developer Workstage-Connecticut L.L.C. for 218,000 square feet at the premier green campus, and will begin relocating its headquarters from North Haven in exactly one year. The move from North Haven to Wallingford will allow Anthem to remain in New Haven County.

Construction was chugging right along on the two-story Campus at Greenhill until build-to-suit client Mortgage Lenders joined the ranks of many a subprime lender and filed for bankruptcy in 2007. Workstage-Connecticut, originally formed as a joint venture between Workstage Development and The Hampshire Company, was left in a pickle, but later tapped real estate services firm Cushman & Wakefield Inc. to market the property. Carrying the address of 108 Leigus Road less than 10 miles north of the City of New Haven, the Campus at Greenhill occupies 100 acres of land, a large segment of which is wetlands. In addition to Class A office space, the building, designed to achieve LEED Silver certification, also features a cafeteria, a fitness center, a conference center and parking accommodations.

Anthem would have been hard-pressed to find comparable office space in the area. “There are not many large chunks of new office space in the northern New Haven County market,” Jonathan Putnam, broker with Cushman & Wakefield, told CPE. “There are a few blocks of space of that size, but it’s difficult to find it in Class A facilities. The Campus at Greenhill is a brand new spec building, which we haven’t seen in northern New Haven County in 15 to 20 years.”

Anthem will relocated from its current digs six miles away in three of four buildings at a 575,000-square-foot complex that the health insurance provider had owned until it orchestrated a sale-leaseback agreement with Quinnipiac University in 2007. Anthem will conduct the two-phase move to the Campus at Greenhill in September 2011 and September 2012. In the meantime, Workstage-Connecticut will wrap up the interior framework of the shell structure, with base building work and tenant improvements taking place simultaneously.

With Anthem’s lease agreement in place, approximately 80,000 square feet of office space remains available at the Campus at Greenhill. According to Cushman & Wakefield’s mid-year report on the U.S. office market, the overall vacancy rate in the New Haven area is approximately 13.4 percent. As for leasing up the Campus at Greenhill, where space is being marketed for $22 per-square-foot, Putnam is undeterred by the less-than-stellar numbers. “We do have some interest in a good chunk of the space,” he said. And way, way down the road when the office market goes on the upswing again, the Campus at Greenhill, given its sprawling acreage, may offer additional office space. “We can also do build-to-suits. There are wetlands throughout the property, but there is plenty of land that can be developed.”