Liberty Mutual’s giant office campus in Dover seems destined for a massive redevelopment into a mixed-used site that plays into current “live-work-play” trends dominating many development projects these days.

Earlier this fall, Cushman & Wakefield, Liberty Mutual’s brokerage representative, began marketing the vacant two-building, 585,000-square-foot office campus to perspective buyers, saying the 222-acre site’s location off the Spaulding Turnpike made it prime for “repositioning.”

The market brochure added: “The site’s Innovative Technology zoning and Residential- Commercial Mixed-Use Overlay allows for future development of additional buildings, giving it significant expansion and alternative use potential.”

A Cushman & Wakefield spokesperson declined comment.

But Christopher Parker, deputy city manager in Dover, confirmed that some sort of mixed-use project, including new residential and retail spaces, is now more than likely for the site, due to the rise of remote working that’s significantly lessened demand for office space across NH and the county.

“Single-use on the site is probably not realistic,” said Parker, referring to the sprawling property remaining a purely office campus. “If a single-use [buyer] comes along, we’d be happy to talk. But right now a mixed-use [project] sounds attractive, a true mixed-use or multi-faceted environment.”

He said current zoning “allows for some residential” components at the site, while new retail space is also a possibility.

City Officials Hope for Mixed-Use

Parker emphasized what ultimately happens to the Liberty Mutual campus depends on a future buyer’s own plans for the site – and the city’s preferences.

He said the city of Dover has had talks with Liberty Mutual and Cushman & Wakefield about various scenarios that could play out at the site, but he said Dover officials haven’t been told the names of any potential buyers.

In a statement to The Registry Review, Glenn Greenberg, a spokesman for Boston-based Liberty Mutual, said company officials are “currently in discussions with interested parties” about the property. He didn’t elaborate.

Greenberg also said the transfer of employees from Dover to the Portsmouth offices was completed in early 2023.

Liberty Mutual previously said its move toward a more “hybrid workforce” was the main driver of its consolidation of workers from Dover to Portsmouth.

The giant insurer currently employs about 3,000 workers in New Hampshire, down from 3,100 employees when it first unveiled its local consolidations plans in late 2022. Liberty Mutual recently announced a number of companywide layoffs across the U.S.

But Will It Work?

Local commercial real estate brokers say transforming the Dover office campus into a mixed-use “live-work-play” site makes sense, considering the state of the office market in NH and across the nation.

Bill Norton, president of Norton Asset Management, said there are signs of some remote employees returning to offices, at least on a hybrid basis, in urban markets such as Boston.

But suburban-based office facilities, with their larger floor plates and more isolated locations without as many amenities, aren’t faring as well.

“Suburban offices are really taking a beating,” he said, noting the ongoing office downsizing occurring in suburban submarkets across the state. “The bigger the floor plates, the hard it is to fill them. There’s definitely [office] shrinkage going on in a lot of places.”

He added: “Liberty Mutual has committed to remote-work big time. It’s the new normal.”

And that’s one of reasons why repositioning the Liberty Mutual site away from solely offices makes sense, he said.

Financing a Question Mark

As for financing a potential redevelopment of the Dover site, it could get tricky with current higher interest rates and escalating construction costs.

But commercial real estate brokers note that the Federal Reserve recently signaled plans to reduce interest rates next year, thus lowering costs for any construction projects.

Chris Norwood, president of the NAI Norwood Group, said any new buyer will likely bring in a mixed team of heavy-hitter investment partners to get any project off the ground.

“It’s not going to be a traditional financing package,” said Norwood.

An attractive part of the Liberty Mutual site is that it already has a solid infrastructure in place, including water, sewer and electric lines.

The site’s 235,000-square-foot ‘Dover East’ building was constructed in 1997, while the 350,000-square-foot ‘Dover West’ building was constructed in 2007.

“The infrastructure is there – and that will make it easier to get financing,” Norwood said. “The investors will say, ‘Look, the infrastructure is already in place.’”

Norwood, a board member at the New Hampshire Housing Finance Authority, said he’d particularly like to see a residential component to any redevelopment.

“New Hampshire needs housing – and workforce housing,” he said. “All new housing is good housing.”

Besides office, residential and retail components, a future mixed-use site could potentially also include life science facilities, medical clinics and perhaps even light manufacturing space, Norwood said.

Dover’s Parker cautioned that all talk about future changes at the Liberty Mutual site are just that – talk.

“It’s going to be a multi-year endeavor, particularly if there’s new construction involved,” he said.  “You will have some complexity. It will take time.”

He added: “We want to work with all parties on how we can best position this asset. It’s a unique site. It’s an interesting opportunity to see how the market is evolving.”