Photo courtesy of JLL

Christopher Ostop
Managing Director, JLL
Age: 56
Industry experience: 26 years

Uncertainty continues to linger over Connecticut’s office market following the COVID downturn and ramp-up of trade wars that has whipsawed financial markets in recent weeks. Higher construction costs are prompting more tenants to renew their leases rather than pay for tenant fitouts elsewhere, and speculation about distressed sales creates hesitation as tenants consider their options. Christopher Ostop helps landlords and tenants navigate the fog in his role as managing director of JLL’s Hartford office, a position he has held since 2017. The veteran broker has been active in leasing for JLL since joining the firm in 1999, and oversees leasing and investment sales for the brokerage’s office and industrial sectors in the Hartford and New Haven markets.

Q: How are aggregate tenant requirements for office space trending in the Hartford market?
A: 2025 year-to-date has been slower for sure, just given the uncertainty of everything that’s happening on a macroeconomic scale. Hartford and Connecticut in general don’t get the new businesses into the market as much as the bigger markets, so in general, it’s just a revolving of the current roster as leases come due. We had a very good 2022, 2023 and 2024 coming out of COVID once a lot of the companies got their feet underneath them and got a general idea of their decision to renew or relocate to another area of the market.

Q: So this year, the renewal market is more dominant than relocating and/or consolidating?
A: That’s right. Right now, any deal that is coming due is somebody coming off of a short-term renewal, where they kicked the can during COVID. There are a few larger tenants who haven’t come up, because they were in the middle of a 10-year deal, and there are still a handful of leases out there where we’re still waiting to see what their final size would be. There are a lot more renewals than relocation, and a lot of that has to do with the cost of construction throwing a wrinkle into their thought processes.

Q: How are asking rents trending in Hartford?
A: This market hasn’t really seen any run-ups, unlike a Boston where you’ve seen rental growth, so there’s not a lot of room for them to go further. The deals that were being done three or five years ago look similar now. Tenants will wisely ask, “With the increase in vacancy, how can the deal be the same?” They can’t go dramatically down. We’re already at the low end of what’s a viable investment.

Q: What are some examples of landlords that have had recent success in leasing?
A: 1 State St. is owned by Hartford Steam Boiler, a division of Munich Re. So it’s a beautiful class A building, but Hartford Steam Boiler occupies half, and half is multi-tenant. The biggest recent lease is Robinson+Cole, which took about 75,000 square feet. Because there’s no debt [on the property], that’s a major plus in our market. Our market is typically highly levered, we don’t get many REIT’s or family offices. The building is run to some degree like a corporate headquarters, so tenants get to go in there and benefit from the amenity package that Hartford Steam Boiler is putting in for their own employees. Most recently they put in a brand-new restaurant on the 20th floor. They’ve always had one, but they gutted and rebuilt it. It’s called The Foundry, a high-end restaurant with gorgeous views. That is completely unique in downtown Hartford. They added a golf simulator, and they did a nice job putting that on a window line. Usually amenity space goes on the inside. Their conference center is not just a couple of rooms, it’s actively managed. In some buildings, tenants feel like a guest in someone’s house. This building feels like any other multi-tenanted building. If you did a tour, you probably wouldn’t even know they were an owner-occupant. With no debt, there’s instant trust from the tenant base. A lot of other buildings in the market have some level of debt issues they’re working through.

Q: How does uncertainty about potential distress and a change of ownership play into tenant leasing decisions?
A: Our downtown tenants are some of our more sophisticated tenants and they don’t want to sign leases with somebody in the middle of a capital restructure. By and large, any savvy corporate real estate director is going to avoid that at all costs. It’s all about the employees. People are relocating for one reason: to make a better place of business for their employees. That’s why they are moving and spending the money. It’s not completely transparent, but good brokers do the investigation of the capital stack. Sometimes it’s not public knowledge if it’s mezzanine debt, or the debt service coverage ratio: all of that fun stuff. It takes a long time because we have a lot of CMBS debt in our market, which is fine until it’s not. You get buildings that can be sidelined for a period of time, and some of them don’t have the capital to do leasing.

Q: How do the tenant requirements break down by industry?
A: Law firms and financial service companies are most of what we’re seeing, and that’s almost always the case. We’re an older market. We don’t have a lot of small startup companies. The law firms and financial services are the group that’s returning to the office, more readily than the back office or corporate users.

Q: What do you expect in terms of volume for investment sales or distressed sales this year?
A: We’ll see. I think it’ll be distressed sales, CMBS sales. It’ll be the bank looking to sell it. I’d expect probably about 20 percent will come on the market in downtown Hartford this year. In general, we need the final turnover to happen. We are in this no man’s land where receivers are taking the buildings back, but are not sure when to sell them. But when they sell them, they will be at a new basis and they’ll be free and clear to chase new business and new tenants and improve the building. It’s a good thing, whether it’s this year or next year, where these buildings trade to new owners with a new cost basis. And that will benefit the tenants in the market.

Ostop’s Five Favorite Weekday Lunch Spots in Downtown Hartford:

• Monday: One State Street Cafeteria for salads and sandwiches
• Tuesday: Agave for Taco Tuesday
• Wednesday: Sorella for their personal pizzas
• Thursday: Feng for Sushi or Urban Lodge for any of their delicious sandwiches (Hartford Hellion burger is a favorite)
• Friday: Vaughan’s Public House – Ask for the fruit salad