Hartford’s revitalization is well underway with encouraging signs all around the city.
Cranes now occupy the Hartford skyline as new developments take shape progressing toward completion. Projects such as Coltsville, 55 Trumbull St., Trumbull Centre, Town Square, Constitution Plaza, Front Street and the new Marriott Hotel and Connecticut Conference Center are all examples of citywide momentum toward economic growth.
Despite Connecticut’s overall unemployment rate of 4.7 percent for February 2004, the state is below the national average of 5.6 percent for the same period and several economists forecast modest job growth in Connecticut for the second half of 2004.
With the recent completion of significant corporate mergers in both the insurance and banking industries, the Hartford office market is sure to be impacted directly in the coming months. However for the first quarter of 2004, Hartford’s central business district office market remained moderately unchanged with limited leasing activity and a slightly higher overall vacancy rate at 22.9 percent, up from 21 percent at the end of 2003.
Despite the overall market inactivity for the first quarter there are a few large users considering the Hartford area for large blocks of space. No new speculative commercial office construction projects are underway, allowing for positive absorption to return to the market later this year. Overall asking rents have dropped from an average of $21.56 to $19.33, indicating landlords are still eager to capture tenants who remain focused on cutting occupancy costs.
Class Size
The central business district has seen some significant changes take place this quarter. Cushman & Wakefield reclassified One Corporate Center from Class A to B to more accurately reflect its current condition and position in the market. This has caused the Class B overall vacancy to rise from 34.1 percent up to 47.3 percent by shifting 310,000 square feet of available space to the Class B sector. Having a reverse effect on the Class A market however, One Corporate Center’s reclassification caused overall Class A vacancy to drop to 14.4 percent from 17.7 percent last quarter.
In addition, 100 Constitution Plaza is undergoing a total rehabilitation and is being added to the inventory as a Class A building, after the formerly Class B building was purposefully emptied of tenants by the landlord to make way for the renovations. Both the University of Connecticut and two soon to be announced tenants have signed leases for approximately 92,000 square feet combined and will take occupancy in stages starting in August of this summer and continuing through the end of the year.
These leases, combined with Shipman & Goodwin’s lease of 99,168 square feet in the second half of 2003 at One Constitution Plaza have made Constitution Plaza the turnaround success story of this decade. With the absence of new office construction Downtown, this project represents the largest investment in rehab construction of office space since the 1980s. Since Capital Properties became involved in Constitution Plaza in September of 1999, over $60 million has been invested in the 650,000-square-foot complex and the Plaza has been brought back to life with new leases for nearly 70 percent occupancy rate.
With Capital Community College occupying the former GFOX building, the arrival of the University of Connecticut’s MBA program at 100 Constitution Plaza, and the proposed Sage Allen residential project along Temple Street, the Market Street corridor is being transformed and undoubtedly will see a much needed increase in pedestrian traffic.
Northland Investment Corp. is making final preparations to begin the dismantling of the two skywalks connected to the Civic Center to start construction of the Town Square residential project, which includes an entirely new street-front facade along Asylum and Trumbull streets.
Adriaen’s Landing, a 33-acre parcel that will be home to Hartford’s new Convention Center, hotel, apartment, entertainment and retail district will also give the central business district a much needed boost. Several new investors in the city of Hartford have stated publicly that the Adriaen’s Landing project is what gave them the confidence to invest in Hartford.
Downtown Hartford has also continued to add new restaurants and bars, such as ZuZu’s Cafe at Constitution Plaza, Bin 228 at Goodwin Square, and McKinnon’s Irish Pub on Asylum Street. Several new dining establishments are planned for Downtown, including a new Italian Restaurant at Trumbull Centre by Geno Auriemma and an Irish pub/restaurant at 31 Pratt St.
The confluence of positive developments and encouraging economic news gives reason to be hopeful for an improved Hartford office market going forward. Overall, Hartford has weathered the malaise of a weak economy and negative job growth better than many other areas in the country. The city’s proven stability should be an alluring selling point to garner continued interest and further capital investment into the region.
