The Palace Theater, which is due to reopen in downtown Waterbury in November, is part of the revitalization that spurred frenzied commercial purchases and leases in the city during the first half of 2004.

Tom Hill, vice president of Coldwell Banker Scalzo-Tom Hill Group, has been busy lately. The Waterbury commercial broker was harried earlier this week, jumping from appointment to appointment as retailers, investors and business owners continued to show increased interest in the once-struggling city in central Connecticut.

That interest has been peaking for a while and has resulted in a stellar first half for commercial brokers in the Waterbury area, Hill said.

“It’s full steam ahead on everything except for downtown office space,” he said.

But brokers in other parts of central Connecticut haven’t been as lucky.

“Things have been very slow,” said Kym Gill, a broker at Prudential Connecticut Realty in Avon.

Office space in the area drew more interest in the second quarter than it did in the past few quarters, Gill said, but retail has been quiet. There is little commercial space on the market this year, she said.

“Office is probably doing better than retail,” she said. “The second quarter picked up.”

The downturn is a change from 2003.

“[There were] a lot more sales last year,” Gill said. “Leasing and sales were good last year.”

Jeffrey Livingston, managing partner of CB Richard Ellis in Hartford, didn’t notice the upturn in leasing his company was hoping for during the first half.

“It’s been very much the same,” he said.

Although the market has not been doing poorly, it hasn’t been as robust as brokers had hoped, particularly in office leasing, he said. That is partly because most companies are not adding new employees quickly and because many companies that do add jobs already have empty space to backfill, Livingston said.

But there are some bright spots for the Greater Hartford area. The second quarter of this year saw a lot of industrial activity near Bradley International Airport in Windsor Locks, Gill said. Livingston noticed a similar trend.

“Industrial space, in general, has been leasing and selling at a good clip,” he said.

Sales in general also have been good, Livingston said. Several CB Richard Ellis brokers were involved when Phoenix Life Insurance Co. sold a 435,000-square-foot Class A office property in Enfield to Massachusetts Mutual Life Insurance Co. for $27 million in May. Bill Farley and Tom York of CB Richard Ellis were the exclusive marketing advisors for Phoenix in the sale and John Williamson, also of CB Richard Ellis, represented Massachusetts Mutual.

‘Upscale Situations’

Waterbury has continued to see large transactions in the second half, Hill said. He brokered the sale of a building containing a Sports Authority and PETsMART for $10.5 million in the first quarter of this year.

There were also many apartment complexes changing hands over the first half, he said, which is often a byproduct of retail and other commercial activity in an area.

“That typically follows commercial transactions,” Hill said.

Apartment conversions may become more common in downtown Waterbury. Hill represents the owners of an 80,000-square-foot building there that is leased out on the first floor with retail, but where the top two floors stand empty, he said. He has been showing it to people interested in converting it to apartments.

Some development in the area also came when a Jewish school, Yeshiva Gedolah, moved to Waterbury and purchased more than 100 houses in the area. Friends of the school have been buying space in downtown Waterbury, Hill said.

Age-restricted housing also has taken off in the Waterbury area. A company is planning a 350-unit active-adult community in Middlebury near the Waterbury border and several others are in the approval process, Hill said. In Watertown, there is a plan for a 40-unit age-restricted development called Reflections, he said.

The revitalization of Waterbury – which includes projects funded by money the state has invested in the city, like the renovation of The Palace Theater downtown, the new University of Connecticut campus and a new transportation hub -also have started drawing more high-income people to the area. A developer is planning a 40-acre subdivision in Watertown that will include stables and be marketed to people who own horses, Hill said.

“It’s just an example … the market is starting to see more upscale situations,” he said.

Other developments in Waterbury includes Webster Bank’s relocation of 50 employees to a new downtown office, the renovation of the old Sheraton Hotel, which will be reopened as the 280-room Connecticut Grand Hotel and Conference Center, and two new Friendly’s restaurants.

“It’s unbelievable,” Hill said.

Hill hopes the activity will continue.

“As long as interest rates stay in lower levels … and the job situation continues to grow, I think Waterbury will continue to grow,” he said.

Meanwhile, Livingston sees some evidence that the market in the Greater Hartford area will start to pick up later this year and early in 2005. Investments have been strong so far this year and he expects several good-sized investment sales to close later this quarter, he said.

“We remain hopefully optimistic,” he said. “I think that the economy will continue to recover and that leasing will pick up.”

Real changes might not be evident until the first quarter of 2005, he said. Many companies are on hold until after the presidential election in November, Livingston said, and won’t make any major moves until then.

Gill also sees the market improving later this year.

“It’s going to pick up,” she said.

In her area, she expects office and industrial space to continue to move quickly. Many people have been out “kicking the tires” lately, Gill noted, and she hopes some of those deals close later this year.