🔒Filling up: As occupancy rates climb, Blue Back Square attracts out-of-state restaurants

The first 10 months on the job have been busy for Jim Dunn.

Since becoming CEO of Rosa Mexicano, a chain of Mexican restaurants with locations in New York, Boston and Washington, D.C., Dunn has been overseeing expansion efforts.

This year, he said, the company — owned by New York private equity firm TriSpan — will be opening sites in Charlotte, North Carolina, Disney World in Orlando, and Las Vegas. The company is also bringing its first-ever Connecticut site to market with a new location in West Hartford’s Blue Back Square, slated to open in late August.

“Blue Back checked all the boxes for what we’re looking for with our expansion,” Dunn said. That checklist includes high-end demographics, a strong office environment to drive lunchtime sales, walkability and curb appeal.

Those are factors that Charter Realty & Development Corp. — which acquired Blue Back last June for $40 million — has been working to improve.

Paul Brandes, principal at Charter Realty, said the company is making a multimillion-dollar investment to upgrade the mixed-use community. During the pandemic, Blue Back saw vacancy rates increase as restaurant visitors and in-person retail dropped and office work went remote.

But Blue Back is seeing positive signs of recovery. Occupancy in the community’s 125,000 square feet of office space has increased to over 80% compared to 55% last summer.

Among the new tenants are Crowe Accounting and GYL Financial Synergies. Charter Realty has also inked deals to lease an additional 40,000 square feet of office space, Brandes said, by end of year.

That uptick in office leases has been prompted by what many real estate brokers have described as a post-pandemic flight to quality. While many companies are downsizing their office footprints amid the widespread adoption of hybrid and remote work, they are also moving to more amenitized buildings and locations to attract talent and lure workers back to the office for at least a few days a week.

And an increase in office tenants has helped Blue Back attract new restaurants, which in addition to Rosa Mexicano includes Oath Pizza and Gran Gusto, a Tuscan-style Italian eatery, that will open this summer and fall, respectively. By early 2023, Boquieria, a spanish tapas restaurant and Kilwin’s, an ice cream and chocolate shop, will also find a new home in Blue Back Square.

Meantime, Fleming’s Steakhouse and Wine Bar is undergoing significant renovations, including expanded outdoor dining. That’s a trend that, Brandes said, increased significantly amid the pandemic and is likely to grow as restaurants adapt to consumer demand for outdoor space.

Kristen Gorski, economic development coordinator for the town of West Hartford, said more flexible town ordinances for outside dining were important to support the recovery and continuity for restaurants in both Blue Back Square and West Hartford Center. The town, she said, promotes both commercial sections as one walkable district.

“It’s definitely a dining mecca and destination,” she said. “That’s helped attract a lot of restauranteurs looking to open their first Connecticut location in Blue Back.”

The vibrancy of Blue Back is what attracted Drew Kellogg, president and CEO of Oath Pizza.

The fast-growing pizza franchise was founded in Nantucket in 2014 and now has 30 locations nationwide. Kellogg said Oath Pizza considered nearly a dozen towns for its first Connecticut establishment, but chose Blue Back given its younger, socially-conscious demographic.

The company serves humanely-raised meats and focuses on organic ingredients.

“The Millennial and Gen-X consumer base is very important to us,” Kellogg said, noting Blue Back’s proximity to a number of schools in the area are a plus. To cater to a younger crowd and on-the-go families, Kellogg said, Oath Pizza has become much more digital savvy coming out of the pandemic.

“That’s allowed us to have a smaller [physical] footprint as we are more heavily oriented toward take-out,” Kellogg said. The company’s new Blue Back location will be only 850 square feet and a prototype for new establishments nationwide.

Rosa Mexicano’s Dunn said his 5,000-square-foot Blue Back Square restaurant will also be smaller than many of the chain’s more urban locations.

Dunn said supply chain delays and inflation have been among the biggest challenges. He said issues from sourcing materials to securing general and subcontractors have extended the length of time to bring the Blue Back location online and at a higher cost.

“It’s probably 25% to 30% higher than a build-out three years ago,” Dunn said.

Brandes has experienced those impacts first-hand, but he said Charter is looking to add food and beverage establishments that complement Blue Back’s current offerings, but are also well-capitalized and growth-oriented.

With current deals in the works, Brandes said, Blue Back’s 225,000 square feet of retail/restaurant space has jumped from 80% occupied last year to more than 90% this summer.

Meantime, Blue Back’s 48 apartment units have rebounded even more rapidly, according to Brandes, from roughly 65% occupancy to nearly 100%.

The work, however, is not done. Brandes said Charter continues to renovate the common areas and lobbies of its office buildings and residential inventory.

With the progress to date, Brandes said he remains bullish on Blue Back’s future.