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.
CBRE Cares New England continues its mission “to build a foundation for our community by facilitating a variety of volunteer and giving opportunities that have a significant effect on the lives of families in need—building today for a stronger tomorrow.” Designed to harness the aggregate potential of CBRE/New England’s over 28 MSF property management portfolio, events are coordinated to engage both CBRE/NE tenants and employees. Over the past year, CBRE Cares New England organized the following charitable activities:
Food Drive: Over 2,600 Pounds of Food Collected
In March, CBRE Cares New England facilitated its eighth annual Food Drive to collect and distribute non-perishable goods to families in need across New England, partnering with The Greater Boston Food Bank, Loaves & Fishes, Rhode Island Community Food Bank and New Hampshire Food Bank. Over the course of just two weeks, CBRE Cares New England collected a total of over 2,600 pounds of food donations, amounting to 10,400 meals created!
A capping off event took place on April 12th, at the Greater Boston Food Bank (GBFB) in Boston, Massachusetts where CBRE/NE volunteers joined a host of directors and volunteers to help achieve GBFB’s mission of ending hunger in eastern Massachusetts. Over the course of the day, CBRE/NE volunteers helped sort 19,450 pounds of food making it possible for the GBFB to supply over 14,000 meals to those in need.
An additional capping off event took place on March 9th at the Foodshare Bloomfield, Connecticut food bank. Foodshare receives food donations from the food industry and sorts and distributes the donations to 300 food pantries, community kitchens, homeless shelters and other partner programs. The CBRE/NE volunteer group sorted 8,100 pounds of food that was donated by Stop & Shop. This food would have otherwise been thrown away.
Footwear Drive: Over 1,000 Pairs Collected
Partnering with the Massachusetts, Connecticut and Rhode Island Goodwill Chapters as well as Children’s Friend in Rhode Island, CBRE Cares New England facilitated its first Footwear Drive. Over 1,000 pairs of socks and new or gently used shoes were primarily distributed to local Goodwill chapters across New England. The network of 162 independent, local Goodwills in the United States and Canada offers customized training and services for individuals who want to find a job, pursue a credential or degree, and strengthen their finances. Donations were also given to Children’s Friend of Rhode Island, Rhode Island’s oldest child welfare organization and a leading provider of child welfare, family support, mental health and child development services.
In combination with this drive, on May 25th, CBRE/NE employees volunteered their time at the Cradles to Crayons Giving Factory. Volunteers enjoyed a day of fun and service as they created “KidPacks” to help Cradles to Crayons work towards their mission of providing basic necessities for children in need. In addition to putting together these packages of clothing, toiletries, bedding, diapers, books and more for individual children, volunteers spent the second half of the day sorting children’s clothing donations. At the end of the day, 270 children in need were helped by our team!
Hartford Area Habitat for Humanity: Construction Started on Six Houses
On June 29th, CBRE/NE employees volunteered at the Hartford Area Habitat for Humanity. CBRE/NE volunteers were tasked with framing and doing preliminary stage construction tasks. This project, part of a 22-unit development on South Marshall Street, has been completed, and in December six new homeowners received keys to their new homes.
Back-to-School Supplies Drive: Over 3,500 Items Collected
By providing kids with the tools so many take for granted, our Back-to-School Drive allows kids to focus on what’s really important—their schoolwork. CBRE Cares New England partnered with a host of Boys & Girls Clubs around New England to collect and distribute 1,780 supplies for less fortunate children. The mission of Boys & Girls Clubs of Boston is to help young people, especially those who need us most, build strong character and realize their full potential as responsible citizens and leaders. In addition, over 1,800 items were collected and used to fill more than 30 backpacks with back-to-school supplies in partnership with the Capital Region Education Council, who working with and for its member districts, has developed a wide array of cost-effective and high-quality programs and services to meet the educational needs of children and adults in Greater Hartford. CBRE/NE employees and tenants pulled off our fourth Back-to-School Drive without a hitch and just in time for the first day of school!
In conjunction with this drive, on September 18th volunteers partnered with Boston Cares leaders once again, but this time to build twin bed frames that were distributed through agency partners to families transitioning out of homelessness in Greater Boston. In total nine beds were constructed from start to finish by our team of volunteers. Then on October 6th volunteers set out once again to give back, this time for a maintenance and beautification project at the Boys & Girls Clubs of Boston Charlestown location. Volunteers were put to work around the Boys & Girls Club doing various projects such as painting, gardening and cleaning, all in support of the organization’s commitment to helping the young people in the community succeed academically, live healthy lifestyles and practice good citizenship.
Toys for Tots/Gift Giving Drive: Over 1,600 Toys Collected
During the 2017 holiday season, CBRE Cares New England organized a Toys For Tots/Gift Giving Drive to allow local disadvantaged children and families to experience a happy holiday and provide them with a message of hope. Donation stations were established in all participating buildings where employees and tenants dropped off new gifts to benefit local kids in need. Over 1,600 gifts were collected on behalf of the U.S. Marine Corps Reserve Toys for Tots Foundation and other local charities.
Dunkin’ Donuts Park, in its maiden season as home of the Hartford Yard Goats, has been named the Best Double-A Ballpark in America, per a recent poll conducted by Ballpark Digest. The online poll—which began May 30th before concluding on June 20th—achieved participation by 178,000 fans, with each of the 30 Double-A ballparks in the nation considered. Dunkin’ Donuts Park faced fierce competition (with Pennsylvania club Altoona Curve coming in second) and is a testament to the draw of the Yard Goats’ new home. The park has already sold out 15 times this season, including 11 of the last 17 games.The park’s design emphasizes socialization as a critical part of the game experience, with a multitude of concession options on offer, as well as amenities including the Travelers Fun Zone. This endeavor clearly has resonated with visitors to Dunkin’ Donuts Park, and their rapid incorporation of the park into the center of Hartford’s entertainment scene indicates the beginning of an exciting new period in Downtown North. The stadium’s function as another downtown entertainment option further provides employees with greater opportunity to meet, mingle and network in this evolving 18-hour city.
The ramifications of a revitalization of this section of the city are substantive and positive: increased vibrancy and available amenities in the area will be a boon for businesses as Hartford’s CBD expands northwards, furthering a collective optimism regarding the city’s future.
Next up in our New England Market Overview recap series, we cover the Hartford market. Our Connecticut team presented on the state of the industrial, office and investment markets.
Industrial Market Overview
John Reed, Senior Vice President/Partner, led with an in-depth overview of the Greater Hartford Industrial market.
“Last year there was 4 MSF of industrial volume and 1 MSF of net absorption. Consequently, the vacancy was down 9.2% from 2015. This led to improving values, rising lease rates, increased sales prices and higher land prices per acre, creating a premium on large industrial sites.” – JR
“The distribution model has changed. Drivers need to get to their destination and back in one day. Being centrally located in New England has fueled this demand. With the evolution of e-commerce, next-day—if not same-day—delivery will continue.” – JR
“UPS absorbed 230,000 SF of space at Cornerstone’s 1 Market Circle in Windsor. FedEx Ground is building a 525,000 SF distribution center at 1000 Middle Street in Middletown. You may recognize this as the former 1 MSF Aetna office campus; it is a perfect reuse of this property. This is the fourth FedEx operation established in Greater Hartford in the last four years.” – JR
“Due to the diminished inventory of quality existing buildings, some users are having to build.” – JR
Our industrial forecast for 2017 includes:
- Continued demand for large existing buildings
- Continued demand for large permitted sites
- One million square feet of absorption in 2017
- 2017 will be a better year than 2016
Office Market Overview
“2016 was a relatively flat year for leasing velocity, with renewals outpacing relocations. The market saw approximately 100,000 SF of net absorption and the sublease inventory was reflective of a fairly healthy economy.” – AA
“The Greater Hartford Office market is still very much a traditional economy. By comparison, in Metro Boston approximately 40% of the tenants in the market for 2016 identified themselves as ‘tech’ companies.” – JM
“Buildings in submarkets with walkable amenities and superior highway access led the way in 2016.” – AA
Our office market forecast for 2017 includes:
- Increased renewal activity
- Continued urban migration
- State and City budget impacts on the region
Investment Market Overview
Patrick Mulready, Senior Vice President/Partner, covered the Connecticut Investment market.
Our investment market forecast for 2017 includes:
- Continued demand for industrial product
- Interest rates will have minor impact on pricing
- Liquidity not going away
- Overall lower sale volume
- Strong pricing for well-positioned assets with good fundamentals
Overall, market fundamentals in Greater Hartford are strong and the outlook is positive for 2017, particularly in the Industrial Sector.
Did you miss our Boston Market Overview or Rhode Island Market Overview recaps? Click on the following link to catch up.