March 11, 2019
Real Estate

Hartford’s slowly improving commercial realty sector

Gregory Seay

Greater Hartford's commercial real estate market continued its slow, if largely unremarkable, improvement in 2018, one of Connecticut's and New England's leading commercial brokers reports.

According to CBRE's 2019 market update report, downtown Hartford's office market underwent a small but noticeable improvement. There was increased absorption of 24,000 square feet of vacant center-city office space vs. 19,000 square feet that was filled in 2017.

Also, average asking rents improved last year to $21.01 per square foot vs. $20.94 average rent in 2017, CBRE said.

CBRE projects that, as more suburban office tenants and others look for downtown space, the downtown vacancy rate will continue improving.

Meanwhile, Hartford's suburban office markets again bore signs of slowing demand for space, CBRE data showed. In the west market, for example, which includes Farmington and West Hartford, 2018 absorption of 202,000 square feet was less than half that of 2017, pushing that quadrant's vacancy to 18.1 percent last year from 16.7 percent in 2017.

The east, south and north quadrants either experienced slower leasing or minimal activity, CBRE said.

"2019 looks to be largely the same as 2018," CBRE said in its suburban Hartford office market forecast, "with both leasing activity and rental rates remaining flat. There is a significant amount of planned giveback space by corporate users that will take the market some time to absorb.''

As in recent years, Greater Hartford's industrial-space market continues to hold promise for landlords and tenants. According to CBRE, tenants absorbed 1.2 million square feet of industrial manufacturing-distribution space vs. 758,000 square feet in 2017, slashing overall industrial vacancy last year to 7.2 percent from 8.8 percent

I-Health/DSM's 226,000-square-foot Enfield lease; Coca-Cola Bottling's 200,000-square-foot South Windsor lease; and U-Haul's 192,000-square-foot Hartford lease were among key drivers in cutting Greater Hartford's industrial vacancy, CBRE said.

Noticeably absent from the industrial scene last year, however, was the completion of construction on any large-format buildings, the realty broker-adviser said.

"This was merely a matter of timing," CBRE said, "and several large tenants are seeking facilities sized from 400,000 square feet to more than 1 million square feet."

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