More than 400 new apartment units are slated to debut in Hartford this year, continuing a recent wave of vacant offices being converted into downtown living spaces.
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More than 400 new apartment units are slated to debut in Hartford this year, continuing a recent wave of vacant offices being converted into downtown living spaces.
The new rental units are being added to a downtown apartment market where occupancy rates and rents have largely been steady in recent years, despite hundreds of new units coming online, according to Michael Freimuth, executive director of the Capital Region Development Authority (CRDA), a quasi-public agency charged with revitalizing the city.
Occupancy rates at CRDA-backed apartment projects downtown, which include about 1,500 or so units, are currently just north of 90%, and monthly rents range from approximately $900 for studios, $1,475 for one-bedroom, and $2,000 for two-bedroom units, Freimuth said.
“There has been and probably will continue to be some flattening of the market rents as new units enter the supply, but this market adjustment is normal and we would expect occupancy to stay in the mid-‘90s while rents per-square-foot do remain stable,” he said. “Unit sizes are smaller and amenities are increasing, distorting any real comparison between buildings.”
The first new 2020 apartments are expected to debut March 1, at a former 11-story office building at 101 Pearl St. The $28.4-million project includes 157 units and abuts the 111 Pearl St. apartments that debuted last year. 101 Pearl was also expected to open in 2019, but it experienced construction delays.
In total, the Spectra Pearl apartments comprise 258 studio, one- and two-bedroom units and are part of a total $50-million investment led by New York developers Girona Ventures and Wonder Works Development and Construction Corp.
A redevelopment of the former Colt gunmaking facility adjacent to Interstate 91 on Huyshope Avenue is also nearing completion, and will likely be the second apartment building to debut this year. The so-called North Armory at Colt Gateway complex is expected to open in early April with 48 studio, one- and two-bedroom units. The $14-million apartment conversion is the final piece of a $120-million redevelopment of the historic manufacturing facility.
By year-end, would-be Hartford renters will have hundreds more apartment options at 28 High St., 100 Trumbull, 246-250 Lawrence St., Allyn Street and at the long-awaited conversion of the top floors of downtown’s Red Lion Hotel, according to Freimuth.
In total, the seven redevelopment projects in 2020 are being supported by roughly $29 million in supplemental financing from CRDA.
Mayor Luke Bronin, a CRDA board member, said private investors are seeing redevelopment opportunities due to recent momentum in the city. But he added that housing conversions downtown still need a public subsidy to be profitable ventures.
Bronin said CRDA funding, provided by the state Bond Commission, has helped to bridge that financing gap in recent years.
“I think there were a lot of people who thought that if you put too many apartments on the market that the demand won’t be there and that hasn’t been the case,” he said. “The constraint right now is supply not demand.”
In 2019, CRDA partially financed the launch of more than 200 apartment units in the Capital City’s central business district.
That includes 101 units at 111 Pearl St., which were 80% leased as of early January, CRDA records show.
Another $23-million apartment complex at 81 Arch St. was completed last summer, adding a mix of 53 studio, one- and two-bedroom apartments downtown in the final phase of the mixed-use Front Street District. The building is 76% occupied.
The last downtown building to welcome new tenants in 2019 was at a long-vacant office building on Asylum Street that reopened in October with 60 studio, one- and two-bedroom apartments. The $20-million Teachers Village apartments are nearly fully leased.
Freimuth said leasing activity has been carried by Millennials, who prefer smaller studio spaces, and empty nesters looking to downsize their living spaces in larger, amenity-laden units.
“Those two subsets are up and outpacing the region,” he said. “They are really filling the buildings.”
Deal Roundup
A pair of new tenants have leased more than 51,200 square feet of industrial space in Wallingford, brokers say.
Consolidated Electrical Distributors, a supplier of electrical and solar products, has leased a 20,000-square-foot piece of the building at 34 Barnes Industrial Road for additional storage space. Red Bull Distribution Co., which only distributes Red Bull products, leased the remaining 31,131 square feet there.
Red Bull Distribution will begin occupying the building in May after renovations are completed.
Broker O,R&L Commercial LLC represented the landlord, ADM Wallingford LLC and Tremblant Enterprises LLC, and Consolidated Electrical Distributors in the deal. Jones Lang LaSalle (JLL) represented Red Bull.
• • •
Sustainable energy-source developer Skyre Inc. has renewed its lease at 111 Roberts St. in East Hartford, brokers say.
Skyre will continue leasing its 8,846-square-foot office and manufacturing space at the David Associates-owned facility, according to sole broker Sentry Commercial.
Skyre was formerly Sustainable Innovations Inc.
Joe Cooper is HBJ’s web editor and real estate writer. He pens “The Real Deal” column about commercial real estate.