Despite the challenges that the state’s economy is facing buildings keep going up in downtown Providence, and at least one of them is starting a domino effect in the real estate marketplace. Specifically, when Blue Cross & Blue Shield of Rhode Island (BCBSRI) gives up its current office locations for the new high-rise headquarters it is building, the spaces it has been occupying for years will see some changes themselves.
In late April, BCBSRI sold its two downtown buildings – 15 LaSalle Square and One Empire Plaza – to a Boston investor who plans to lease the ground floor at both locations as retail space. There is no retail at those locations at this time.
The buyer, Berkeley Investments Inc., paid $26.7 million for the two properties. The deal was financed by Boston-based Eastern Bank, according to information posted on the Berkeley Investments Web site. Together the two sites are assessed by the city at $29.9 million.
As part of the agreement, the state’s insurance giant will lease both locations until space is available at the new 12-story headquarters currently under construction near Waterplace Park in the Capital Center district.
According to its Web site, Berkeley Investments focuses on urban, mixed-use properties in New England. The company did not return phone calls requesting information about its Providence purchase. However, an article posted on the Web site quotes President Young K. Park as saying he hopes to lease both buildings as multi-tenant office space, with retail space at the street level. Park notes that 15 LaSalle Square – across from the Dunkin’ Donuts Center-Providence – would be an especially attractive location for restaurants and shops.
Fifteen LaSalle Square is a six-story building with 128,000 square feet of space. It is bordered by LaSalle Square, Sabin and Fountain streets and the Fogarty Building on a 1.13 acre parcel, and its assessed value is $17.3 million.
One Empire Plaza is also a six-story building, with just under 100,000 square feet of space. It is located across from Trinity Repertory Company, and is bordered by Empire, Washington and Walnut streets and a pedestrian portion of Westminster Street. The building sits on .89 acres and is assessed by the city at $12.6 million.
The other primary Blue Cross location in the city – 444 Westminster St. – is leased from Paolino Properties Inc. The family-owned company has no concerns about a vacancy, according to Joseph R. Paolino Jr.
“[BCBSRI is] not in the whole building – we have another tenant — and they won’t be moving out for another 18 months,” he said. “We’re fortunate in that we have 200 parking spaces just for that building and another 200 in a lot across the street. I think it will be leased very quickly.”
Pressed further, Paolino said, “I know what’s going in there, but I can’t say right now.”
Blue Cross leases space in several other Providence buildings as well, but those are much smaller offices, according to spokesman Chris Medici. “The lion’s share of our folks are in those three locations – LaSalle Square, Empire Plaza and Westminster,” he said.
Blue Cross announced plans to build a new headquarters with space for 1,100 employees in April 2007. The $114 million tower is expected to be completed in late 2009 or early 2010. The site is at the intersection of Exchange Street and American Express Plaza, between the Waterplace condominium towers. •
