File photo
Greater Hartford ranks dead last among 80 U.S. metro areas in an Urban Land Institute report that gauges economic conditions and investor demand for real estate in 2022.
Urban Land Institute’s “Emerging Trends in Real Estate” report reflects interviews and surveys with more than 2,100 real estate industry executives on their expectations for 80 U.S. metros.
The region ranked at or near the bottom in all of the survey’s major categories, ranging from commercial investment and development prospects to homebuilding outlook.
The ULI report groups Hartford with a group of “reinventing” cities in the East and Midwest that are attempting to transition from a manufacturing economic base to industries such as education, health care and technology. Other markets in the category include Buffalo, Cincinnati, Cleveland, Detroit, Milwaukee, Providence and St. Louis.
Sunbelt metros dominated the top rankings in this year’s survey, with Nashville, Raleigh-Durham and Phoenix taking the top three slots. Among other New England metros included in the study, Boston ranked 10th overall while Providence ranked 74th.
The Hartford region ranked 76th in development and redevelopment opportunities and 79th in investor demand for local acquisitions, based upon the survey of local market participants. There has been no new supply added to Hartford’s office market since 2015.
The future of permanent hybrid or work-from-home models generated the most polarizing responses in the survey, according to ULI. Some executives were adamant that traditional office work is irreplaceable, while others predicted hybrid workplaces will become a permanent fixture.
“What share of workers ultimately will work remotely some or all the time will vary by location and type of job, but the answer will depend partly on the relative bargaining power of firms and their employees. With many industries unable to hire needed workers and the ratio of job openings to unemployed workers at historic highs, the scales are tipping in favor of labor,” the report said.
As office space demand declines, newer and high-end properties will benefit while older buildings will be eyed for conversions to other uses or redevelopment, ULI predicts.
The findings could add headwinds to Hartford’s stagnant office market, which had a 20.1 percent vacancy rate at midyear, according to JLL research. The sublease rate was at a 10-year high of 525,000 square feet, or 2 percent of the overall market inventory and twice the availability rate after the 2008 financial crisis.
As office space demand declines across the nation, newer and high-end properties will benefit while older buildings will be eyed for conversions to other uses or redevelopment, ULI predicts.
