PROVIDENCE — The prominent six-story building downtown that toymaker Hasbro Inc. has leased for more than a decade has hit the market, marking what some observers say is the latest blow to the declining demand of the office real estate market.
The building’s owner, Inland Diversified Providence LaSalle Square, LLC, a subsidiary of San Diego-based Realty Income Corporation, listed the 135,000-square-foot office building at 15 LaSalle Square last week without an asking price, and invited prospective buyers to submit “non-binding offers.” The firm acquired the building in 2013 for $29.8 million.
Selling the building “is not what my client prefers,” said Matthew Fair, a partner at Hayes & Sherry, the firm hired to market the property. “But as great as it is, we all know we’re in a world of shrinking office spaces in cities all around America.”
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Fair told the Globe Friday that the highly visible building adjacent to the Rhode Island Convention Center and Amica Mutual Pavilion is available for a company to lease or to purchase. Lease terms would depend on “many variables,” said Fair.
While the listing was made public on April 25, Fair said the building’s availability had been shared with top prospects over the last two months, which has generated “a good amount of interest,” particularly from regional firms and companies based in Boston.
“If you’re looking for 5,000 to 20,000 square-feet in the market there are many options to consider, but if you’re looking for 100,000 square-feet or more, there are very few, and none in [Providence’s central business district]” said Fair, who said the building is in “exceptional condition,” and that Hasbro has offered to leave their furniture.
“It’s the best large-format headquarters-quality opportunity we’ve had in the market in over a decade,” added Fair, who said the building could also be converted into much-needed housing, but said with the investment that might require, the prospect “might be too far fetched.”
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The news comes just five months after Hasbro’s chief executive Chris Cocks told staff in a December 2023 memo that 1,100 employees globally would be laid off due to “market headwinds” that he said were “stronger” and “more persistent than planned.” Those layoffs came shortly after the company had cut 800 jobs while executives grappled with five consecutive quarters of declining revenue.
In his memo, which was filed with regulators, Cocks promised Hasbro would look to reduce its real estate portfolio, including slashing its leased space in Providence.
The six-story office building “is currently not being used to its full capacity and we’ve decided to exit the space at the end of the lease term in January 2025,” wrote Cocks.
Fair told the Globe that Hasbro is still occupying the building, but it’s unclear how many are regularly reporting to the Providence office. Andrea Snyder, a Hasbro spokeswoman, said about 240 employees are still reporting to the Providence office, and will transition to the company’s headquarters in Pawtucket, Rhode Island.
Hasbro first leased the LaSalle Square property in 2013 shortly after it scored a $1.6 million tax credit from the state under former governor Lincoln Chafee. From the state’s side, the deal was an incentive for Hasbro’s expansion, which was calculated by the size of the projected income tax revenue that would be generated by the nearly 280 new jobs the toymaker had promised at the time.
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When Hasbro moved in, the office building had recently undergone a $20 million renovation. The building was first constructed in 1987 and was previously owned by Blue Cross Blue Shield of Rhode Island.
Some real estate observers note that Hasbro moving out of Providence could make it difficult for the city to attract another large company into the building.
“It was a win for the city to get them in, and it’s certainly sad to see them leave,” Leeds Mitchell IV, executive vice president and associate broker at Providence-based MG Commercial Real Estate Services Inc., told the Providence Business News in a recent interview. “It’s a lot of space the market now has left to absorb, unfortunately. And there isn’t a lot of demand for larger blocks of space in the market.”
Around 2017, Hasbro executives considered renovating or completely vacating their headquarters in Pawtucket. At the time, state officials had repeatedly attempted to pitch the Industrial Trust Company Building (which is more commonly referred to as the “Superman” building) to various businesses — including Hasbro.
Local business executives also pitched Hasbro executives a plan to demolish the Superman building to construct a 36-story tower. Other ideas included Hasbro relocating its campus to the former I-195 land. But those plans never came to fruition; the long-vacant Superman building is now being converted into apartments and Hasbro remained in Pawtucket.
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On a Friday morning call with the Globe, former mayor and real estate mogul Joseph R. Paolino Jr. recalled when the building was constructed while he was serving as mayor.
“AT&T was the first tenant there, then Hasbro moved in later on and it was great,” said Paolino. “But Providence’s downtown office market is facing what every other major downtown in America is.
“People are shrinking their office spaces, workers want to work remotely, and there’s talk of a four-day work week,” added Paolino. “That doesn’t help commerce, the economy, or the various small downtown businesses that rely on people filling up the office buildings.”
This story has been updated to include a comment from a Hasbro spokeswoman.
Alexa Gagosz can be reached at alexa.gagosz@globe.com. Follow her @alexagagosz and on Instagram @AlexaGagosz.