🔒Commercial realty conference airs bearish outlook

Connecticut has not created one new job in over a decade. The state is losing high school graduates as well as high value-added jobs. Home prices have still not recovered from the Great Recession.

Hartford has lost its luster as the insurance capital of the world, and Cigna and Aetna are likely to relocate their corporate headquarters outside of Connecticut over the next decade or so.

Those were some of the opening comments and predictions shared by UConn business school professor John Glascock, director of the Center for Real Estate and Urban Economics, at a recent commercial real estate conference in West Hartford, where there was no shortage of negative sentiments raised about the fiscal, economic and political climate in Connecticut.

In a state known for being down on itself, some people — including policymakers — might dismiss the tone of the 2019 Connecticut commercial real estate conference as just another event where business leaders pan the state’s economy.

That would be a mistake because the commercial realty brokers, developers and bankers who filled up a conference room at the Delamar Hotel May 2, are literally on the frontlines of economic and business development, and if they are unable to pitch a positive story about why individuals and businesses should buy and own real estate here, Connecticut is in big trouble.

After all, commercial brokers’ livelihoods depend on business owners and investors expanding their footprint here, not shrinking it. Commercial realtors should be the chief salespeople for the state.

But who can blame them, to some degree, for lamenting Connecticut’s economic and fiscal problems, given the lost decade the state just experienced and the seeming lack of understanding at the Capitol of the need to create a more business-friendly environment — or, at the very least, do no further damage.

State lawmakers need to hear loud and clear the concerns of the commercial real estate community.

The state’s regulatory climate and high taxes were discussed at the conference but so too were efforts to raise the minimum wage and adopt paid family medical leave. Tolls brought mixed feelings.

One broker dismissed all the attention being paid to sports betting and recreational marijuana legalization — while they may bring sexy headlines and new revenues they do nothing to change the state’s economic trajectory.

The conference wasn’t all doom and gloom. Some positive realty trends were discussed. Industrial real estate and the apartment market are still hot.

There also seems to be a lot of interest in Opportunity Zones, which offer federal capital-gains tax benefits for investments in distressed municipalities.

Meantime, a panel that included David Griggs and Garrett Sheehan, respective heads of the MetroHartford Alliance and Greater New Haven Chamber of Commerce, took a much more positive tack, trying to underscore Connecticut’s economic advantages (highly educated workforce, good quality of life, well positioned between Boston and New York City, etc.) and progress that has been made in the Capital and Elm cities.

Department of Economic and Community Development Commissioner David Lehman also spoke on that panel about myriad issues, including the Lamont administration’s desire to help ease the regulatory burden in the state.

Griggs, who acknowledged the dour tone in the room, also talked about the need for brokers to work more closely with his organization to help sell the region and its assets.

That certainly needs to happen, but Greater Hartford’s and the state’s fortunes won’t be turned around simply through positive messaging.

The reality is you can’t change tone without changing the fiscal and economic trajectory of the state.