🔒Demand for Colt Gateway apartments bodes well for downtown Hartford rental market

The city recently issued certificates of occupancy for 28 new apartments at Hartford’s Colt Gateway in a building that once housed a magnet high school.

But even before the city’s approval, prospective tenants were signing leases for the new units that feature walls of windows, high ceilings and an industrial feel — all within walking distance of downtown.

“We had 19 of the 28 units pre-leased,” said Clarissa Heredia, sales manager and business developer for Colt Gateway. “The tenants definitely love how modern the units are and the great lighting in these apartments. Because of COVID, a lot of people are working from home, but with the natural light and high ceilings in these units, people don’t feel confined.”

The 28 new units in what’s known as the U-shaped Building, give Colt Gateway 205 apartments, said Larry Dooley, CEO of the developer, CG Management Co.

“All the units are leased with the exception of the handful in the new building,” Dooley said.

One building with 129 units and another with 48 are fully leased, Dooley said.

The 600,000-square-foot development, former home of the Colt Firearms manufacturing company, is a mix of 60% commercial and 40% residential. Commercial tenants include three architectural firms and Insurity, a software company serving the insurance industry.

CG Management partnered with Chevron Corp. on the $3.6 million conversion of the U-shaped Building. The partners originally had financing through United Bank but faced restarting the loan process after United was acquired by People’s United Financial in 2019.

The partners instead closed on a financing package through the Capital Region Development Authority (CRDA).

‘So much history’

CG Management’s partnership with Chevron Corp. is breathing new life into the buildings, some more than 100 years old.

“The Dome Building is from 1867,” Dooley said. “Some other buildings date to the 1850s, 1916 and the 1940s. There’s so much history here.”

Samuel Colt built his first factory in 1847, then in 1855 established the Colt Armory, the site Dooley is redeveloping. The factory burned to the ground in Feb. 1864, two years after Colt died, but his wife, Elizabeth Jarvis Colt, had the factory insured after her husband’s death and was able to rebuild within three years.

The apartments — studio, one- and two-bedroom units — are equipped with modern appliances and lighting fixtures.

“The corner units, which have the most windows, are the first to be leased,” Dooley said.

Monthly rents for the U-shaped Building range from $1,375 for studios; $1,445 to $1,995 for a one-bedroom unit; and $2,095 to $2,195 for two bedrooms, Heredia said.

Tenants at Colt Gateway tend to be in the 25 to 40 age range but not all are from Connecticut.

“Our demographic is definitely young professionals but we get a lot of out-of-state business,” Dooley said. “People from New York who are able to work remotely are looking at these apartments and saying, ‘Look at this compared to what we pay in Brooklyn.’ In some ways, this [pandemic] has been to our benefit because people can work remotely,” and see Hartford as a lower-cost option.

The complex also has a microbrewery tasting room on-site with indoor and outdoor seating, is dog friendly, and Dooley said he’s working to get a fitness club as a tenant and make it available to residents.

More apartments

Colt Gateway adds more modern apartments to Hartford’s housing stock. But at this point, the market is strong and absorbing these new units, said Michael Freimuth, executive director of the CRDA, which helps finance market-rate apartments, mostly in downtown.

“The Hartford apartment market is much stronger than people recognize,” he said. “It’s an evolving product, too.”

Freimuth said that until developers started building new apartments in Hartford about seven to eight years ago, the city’s downtown apartment stock was mostly from the 1970s or 80s without the amenities today’s tenants want and will pay for.

“There’s been a general upgrade in the stock, and that newer product is attracting high occupancies and higher rents,” he said. “That’s what’s going on at Colt. It has some unique things. It’s a fun space in a historical place. The parking is a surface lot right out your window — that appeals to a lot of people — and the neighborhood is starting to blossom.”

The neighborhood includes Dillon Stadium, home to the Hartford Athletic professional soccer club.

High occupancy

Although thousands of new apartments have been built in Hartford over the past several years, most are rented, said Freimuth.

“The overall portfolio of [residential] properties that we’ve invested in are running in the 90% occupancy range,” he said. “We keep seeing more products and the concern is will they saturate the market. But our experience to date is the market is absorbing these units.”

While the pandemic is having negative effects on the Hartford office market, it’s creating new opportunities for apartment landlords.

“People want bigger units because they’re spending more time there, and having a unit where you can work and live and not be on top of yourself is important,” Freimuth said.

Another factor in apartments is the amenities they offer, he said. An apartment development the CRDA helped finance filled quickly and Freimuth said they were curious as to why.

“We surveyed the tenants and found that 5G was the thing that sold it over its competitors,” he said. “A few years ago, people wanted dog-washing stations in their buildings. Now it’s 5G.”