At our Hartford Market Overview, our Connecticut team presented on the state of the industrial, office and investment markets. We were pleased to have Joshua Solomon, Owner of the Hartford Yard Goats, join us on stage as our keynote speaker.
“The Greater Hartford Office market lost 560,000 SF of occupancy during 2017 and it came in many forms. Classic large-scale consolidations; new workplace initiatives that have increased density and efficiency; and new sublease offerings from users that have relocated ahead of scheduled expirations.” – MP
“With the market more competitive than ever for limited demand, landlords will be more focused on engaging tenants and enhancing the overall experience at their buildings. This past year we’ve seen lobby refreshes, new cafes, new fitness centers and outdoor gathering spaces.” – JG
Our office market forecast for 2018 includes:
- Healthcare will be the #1 growth industry during the next decade
- Start-up incubators could be a potential source of demand
- The Hartford Line opening in May should provide future economic growth
- Hartford Office market will have a lot of work to do to absorb the losses experienced in 2017
Chris Metcalfe, First Vice President, led with an in-depth overview of the Greater Hartford Industrial market.
“More than any other product type, industrial is influenced by the vibrancy we see on a national level as commerce changes its real estate footprint in response to the marriage of industrial and retail. The rise of industrial nationally has kept our local industrial market immune to the challenges facing Connecticut.” – CM
“Growth-related challenges facing the supply chain present opportunities for Connecticut. There is currently a two-day delivery expectation from the consumer, which forces competition down to one-day or same-day delivery. This change will require new warehouses to be even closer to population centers.” – CM
“There is another huge challenge in the industrial market: The Trucking Labor Crisis. By 2024 the deficit of insufficient truck drivers is forecast to be 175,000 positions.” – CM
Our industrial forecast for 2018 includes:
- More large-format in our vicinity – demand from one MSF users
- Last mile keeps rolling
- Driverless trucks (?)
Our investment market forecast for 2018 includes:
- Continued demand for well-located office buildings with walkable amenities
- Multifamily is still highly sought after by investors and lenders with strong and stable fundamentals both on the local and national level
- Industrial is the #1 favored property type
- E-commerce giants to acquire more brick & mortar stores
- Medical office expansions into traditional retail spaces should bolster retail centers’ credit and future pricing expectations
- There is moderate to strong liquidity in the debt markets for both traditional (industrial, apartments, office, retail) assets and new types of assets (such as student housing, medical office, senior housing, self-storage)
- Anticipate an average volume of office assets trading in 2018 (10-12 sales)
Overall, market fundamentals in Greater Hartford are strong and the outlook is positive for 2018, particularly in the Industrial sector.
Stay tuned for our next post, where we will reveal what our Rhode Island experts covered at this year’s CBRE/NE Rhode Island Market Overview. Did you miss our Boston Market Overview recap? Click here to catch up.