Cushman & Wakefield completed the lease of 83,882 square feet of office space at 400 Capital Blvd. in Rocky Hill to United Healthcare last November, which was good news for the office submarket south of Hartford.
Hartford’s office market was relatively slow in the fourth quarter of last year with a slight increase in the vacancy rate over the third quarter, but a year full of new development has left commercial brokers, tenants and building owners with a different way of looking at the city.
The effects on commercial real estate of new and soon-to-be completed projects like the Connecticut Convention Center and Hartford 21, the new downtown mixed-use development that includes a tower of luxury apartments, will not be obvious for some time. Still, Jay Wamester, a broker for Hartford-based Colliers Dow & Condon, said he has noticed a shift in how people are viewing the city.
“I think there’s starting to be a positive feeling about the city,” he noted.
Wamester said he is seeing some effects of the new convention center and residences in his business. For the first time, business owners from outside of Hartford are considering moving their businesses to the downtown area. Some are touring the city and exploring their options. Before the beginnings of the city’s revitalization, businesses in the suburbs usually stayed there, and some businesses in the city were moving to the suburbs, according to Wamester.
Despite the interest, there was not a lot of new activity either toward or away from the city in the fourth quarter, he said.
“That’s probably a good thing,” Wamester said.
The new residences downtown are the real story of the moment, said Jeff Livingston, a broker with CB Richard Ellis in Hartford
“It really is changing the complexion of the city,” he said.
‘All the Ingredients’
If demand for housing is what developers hope, the changes will eventually affect the office market, said Jon Putnam of Cushman & Wakefield in Hartford. More residents will mean more restaurants – which are already opening up downtown – and more foot traffic.
“Then you have all the ingredients for a vibrant downtown,” Putnam noted. That, he added, will affect office space because businesspeople will start to view downtown as a good place to see and be seen, and a good place to do business.
Putnam has worked downtown and said it is already a “fun” place to work, but the changes will make it even more visible and vibrant. And finding office space is not difficult, he said.
“Anyone who thinks getting into downtown is difficult hasn’t tried [or explored it enough],” he said.
The past year has inaugurated a different attitude in the city.
“There’s definitely a buzz about how great the city looks,” Putnam said.
Hartford, he added, has always had a good skyline and good park and river amenities.
“We’re finally connecting the dots,” he said. “There’s a palpable excitement about what the city could be.”
That attitude was not as palpable last quarter and throughout 2005, however.
“It really was a very static market,” Putnam said. According to Cushman & Wakefield’s numbers, overall vacancy for Greater Hartford’s office market rose slightly from 17.9 percent in the third quarter of 2005 to 18.1 percent in the fourth quarter.
There were some big leases, but those were balanced out by space coming back on the market.
“The continued chain of corporate mergers eroded vacancies a little bit,” Putnam said.
But there was good news in the southern submarket. The fourth quarter numbers were not impressive – the overall vacancy stayed about the same at 21.3 percent in the fourth quarter – but a big deal made in the fourth quarter is not yet reflected in the numbers, and Putnam said he expects the vacancy rate in the first quarter of this year to fall below 10 percent. In November, Cushman & Wakefield completed the lease of 83,882 square feet of office space at 400 Capital Blvd. in Rocky Hill to United Healthcare.
“400 Capital is a state-of-the-art Class A building that provides its tenants a technological edge, including advanced climate control and the latest in lighting design,” said Bob Kelly, senior director for Cushman & Wakefield, in a prepared statement. Kelly, along with Jon Putnam, Joel Grieco and Maury Smith, all with Cushman & Wakefield, represented the building owner. “Its central location in Rocky Hill’s prestigious Corporate Ridge office park is an added benefit for United Healthcare’s clients and employees.”
In the central business district, “things were pretty solid,” Livingston said.
One ongoing trend is the renewal of leases in order to take advantage of the tenant’s market, he said. Slow or slight growth in employment will mean continued pressure to absorb office space, Livingston said.
“Everybody’s kind of hopeful that we’ll see real employment growth,” he said.
