Middletown’s commercial real estate market has been filled with recent activity, including the sale of the 75,000-square-foot Main Street Market at 366-386 Main St.

While Hartford, New Haven and Stamford often make commercial real estate headlines, a much smaller Connecticut community has been quietly filling its office space, creating a thriving commercial market.

Fueled mostly by a retail renaissance, Middlesex County is enjoying a favorable commercial economy, as downtown Middletown begins to fill up.

“It all started a few years ago when a 12-screen theater opened in the downtown,” said Trevor Davis, owner of Trevor Davis Commercial Real Estate in Middletown. “I don’t think there are many theaters like that anymore, at least not in a town the size of ours. That theater spawned a bunch of restaurants, and we’re now up to about 60 food establishments, and that has spawned even more retail and office use.”

He noted that in addition to lease activity, there have been several rehabilitation projects in the works, particularly in the north end of the city.

“It’s mostly residential on the north end, and people think that it’s seedy,” Davis said. “In reality, it’s just folks hanging out in front of their homes because they just live there.”

Davis pointed to an artist co-op of 12 units of moderate-income housing, created out of an old apartment complex in the area, as an example of a rehab project that is helping to turn the city around.

‘Bright Spot’

Trevor Davis Commercial Real Estate has compiled a comprehensive survey of Upper Middlesex County’s commercial real estate market. The fledgling company of three brokers has been working to put the county on the map, and started last month with the publication of the Middletown Commercial Real Estate Report for the Third Quarter of 2003. The report was developed to establish the availability rates, often referred to as vacancy rates, of all the office and industrial buildings in the northern part of Middlesex County.

“Occupancy statistics have generally been overlooked in Middlesex County since it is a smaller market than both Hartford and New Haven,” said Davis.

According to Davis, Upper Middlesex County is experiencing a rebound in its commercial real estate markets, led by downtown Middletown’s renaissance of its office and retail space.

“Although smaller than the large cities of Connecticut, it is an economic bright spot in the geographic center of the state. Middletown is a great example of how synergy can improve a region. Its balanced tax base and most active and successful Chamber of Commerce provide a stability seen in few other areas,” he said.

Middletown had a population of 43,000 in 2000, according to U.S. Census figures.

Northern Middlesex County, and especially downtown Middletown, has the lowest office availability rates in Connecticut, including areas such as Greater Hartford, Fairfield County and New Haven. According to Davis, the overall office availability rate for all Upper Middlesex County towns and classes is 13.1 percent, compared to Hartford at 20.4 percent and New Haven at 22.9 percent.

Downtown Middletown comprises approximately 640,000 square feet of competitive office space and, according to Davis, “is remarkably occupied.” There is no available space in the only two buildings that are considered Class A, giving it a vacancy rate of 0 percent. The central business district’s Class B buildings have only 12.1 percent available. Even the “walk-up’ Class C buildings have a relatively low vacancy rate of 20.4 percent.

Although Hartford’s CBD has 7.85 million square feet of office space and New Haven’s has 3.75 million, the downtown Middletown business district’s overall availability rate of 9.5 percent compares dramatically to Hartford’s and New Haven’s 19.8 percent and 21.1 percent, respectively.

With the12-screen movie theater, new restaurants and driving office market, Davis said the prospects continue to look better, in part because the Inn at Middletown, a 100-room full-service hotel, opened in October. “The absorption trend is positive with the highest quality space filling up, and we expect this trend to continue, resulting in upward pressure on rental rates,” he said.

In the past few months, the downtown has been filled with activity, including the recent sale of the 75,000-square-foot Main Street Market at 366-386 Main St., for $1.03 million. Davis represented the seller, The Loan Source/New Haven Savings Bank. and was the sole broker in the transaction. There were also renewed leases at Bill’s Sport Shop, It’s Only Natural Market and Restaurant, The Pythian Building and Eleanor Rigby’s Deli. Other activity includes the sale and renovation of Riverview Center, which houses Game Zone, Yoga in Middletown, Choice Publications, Banta Publications Group and Pedal Power.

In addition, Davis has brought new companies into downtown Middletown to help fill up office space. Among those on the long list of lessees are the law firm of Babcock & Griffin, Dr. Ginger Blume, Lee Lowrey’s PMT Assoc., Chris Widmer and Alderhouse, ‘r kids inc., Response LLC, O2 Design, Colebrook, Datec, the Archambault Group and Optimum Sprinkler Designs – all of whom are now located in the downtown area.

In Greater Middletown, a number of new firms have been brought in and are now creating employment opportunities. Those include Pinnacle Decision Systems, Innova Electronics, Weyerhauser/TrustJoist, Security Plus Northeast, Church World Service, Graphite Technologies, Foreign Auto Parts, System Specialties and American Income Life.

The retail and office markets aren’t the only well-performing sectors, as the industrial market is maintaining decent numbers as well. The industrial real estate market in Upper Middlesex County contains approximately 2.35 million square feet and currently exhibits conditions similar to the Hartford and New Haven markets. Of the communities in Middlesex County, Middletown has the lowest availability rate at 16.7 percent. The northwestern section is the most active, since it provides full access to Interstate 91 at both Exits 20 and 21.

Davis noted that his real estate experience has benefited from serving four years on the Planning & Zoning Commission of the town of Haddam, and on the Middletown Economic Development Committee. He also serves on the Middlesex Chamber’s Central Business Bureau’s Parking Committee and the Environment & Land Use Committee, and on the executive board of the Valley Railroad/Essex Steam Train.