Demand for new shopping venues got the commercial real estate development pipeline flowing again in 2015 and generated interest in more retail centers to come.
With vacancies dropping to their lowest level since 2010, commercial tenants looking for new locations are considering build-to-suit projects for the first time in years, said Tony Valenti, a broker with Waterbury-based R. Calabrese Agency. Many of the new projects are being driven by quick-service chains that are expanding.
“We’re finally starting to see ground-lease scenarios and ground-up development again, which we haven’t seen in forever and a day,” Valenti said.
The retail vacancy rate in Greater Hartford declined to 10.1 percent in 2015, its lowest level since topping out at 13 percent in 2010, according to a recent report by Burlington, Massachusetts-based KeyPoint Partners. The market had 367,600 square feet of positive absorption, more than twice that of 2014. The report covers 37 million square feet of retail space in 26 cities and towns.
Expansion of outlet shopping venues was a common thread in current projects and those on the drawing board.
In May, Foxwoods Resort Casino opened its 80-store Tanger Outlets complex as part of the Mashantucket Pequot tribe’s strategy of upgrading its non-gambling attractions amidst expanded regional competition in the casino market.
Developers saw potential for new outlet centers in Hartford suburbs as well. In August, Indianapolis-based Simon Property Group proposed a 350,000-square-foot outlet center on farmland in Windsor Locks. A month later, East Hartford officials approved Rosemont, Illinois-based Horizon Group Properties’ plans for a 10-building, 425,000-square-foot outlet center called The Outlet Shoppes at Rentschler Field. A groundbreaking date has not been set, according to Connie Dyer, spokeswoman for Horizon Group Properties.
In downtown Norwalk, General Growth Properties moved forward with permitting for The SoNo Collection, a planned 1-million-square-foot indoor mall that would be anchored by Nordstrom and Bloomingdale’s and contain up to 100 smaller retailers. GGP hopes to break ground at the site at West Avenue and I-95 in the first half of 2016.
And East Taunton-based Jordan’s Furniture brought its high-energy style to New Haven with construction of a 192,500-square-foot superstore. The chain’s first Connecticut store, scheduled to open Dec. 11, will contain what the company says will be the world’s largest indoor ropes course, including two 60-foot-high rope arrays and four 200-foot-long zip lines.
Biotech Moves From The ’Burbs
The reviving popularity of urban living boosted New Haven’s attempts to expand its life science cluster. In January, Alexion Pharmaceuticals will relocate from three buildings in a Cheshire office park to its new $100-million build-to-suit headquarters at 100 College St. in New Haven’s Downtown Crossing. The new 15-story headquarters consolidates 350 corporate employees under a single roof.
Executives say the urban location will make it easier to recruit up to 300 new employees that Alexion plans to hire by 2017 under the terms of a state economic incentive package.
“This is an urban building and it’s intended to be a real catalyst,” Alexion spokesman Irving Adler told The Commercial Record. “More internal interactions, bringing people together to create more interaction between business and the different science disciplines.”
Turning The Spotlight On Transit-Oriented Development
Completion of the CTfastrak dedicated busway from downtown New Britain to Hartford opened up opportunities for transit-oriented development near the 9.4-mile converted rail right-of-way. The $570 million system went into operation in mid-March and provided 428,602 passenger trips in October, according to the Connecticut Department of Transportation.
Realtors and developers rode the route in November to scout properties that have potential to be redeveloped as housing or commercial projects, including vacant industrial properties, downtown buildings and abandoned car dealerships.
In downtown New Britain, New York City sculptor Cusi Masuda is in negotiations to buy a three-story former rooming house with ground-floor retail at 27-39 Main St. and build up to eight artists’ lofts, said Frank Amodio, CEO of Farmington real estate brokerage Amodio & Co. The property is a half-mile from the New Britain terminus of the CTfastrak.
“Artists are a good indicator of an area that is primed for gentrification because the artists seem to come in and the area starts to turn,” Amodio said.
Reactivating downtown housing in transit-oriented developments will generate more demand for retail space, as restaurants and service businesses cater to the new full-time residents, Amodio said.
In Newington, the former National Welding factory on Cedar Street has been environmentally remediated and now presents a prime opportunity for a mixed-use project within walking distance of Central Connecticut State University, Amodio said. The town of Newington acquired the parcel in 2008 and used state funding to pay for the environmental clean-up. The parcel is equidistant from two CTfastrak stops.
The state of Connecticut and private partners are providing incentives to developers in the form of a $15-million transit-oriented development fund which supports economic growth along the busway. The fund will provide pre-development and acquisition loans of up to $3 million at 5 percent interest for up to 36 months.
“Many of these properties had been dormant or forgotten and now, with all of those (CTfastrak riders’) eyes on the property, interest has really expanded,” Amodio said.
Email: sadams@thewarrengroup.com
