Downtown Hartford’s Class A office vacancy rate was just under 26 percent at the end of 2012, remaining relatively stable from a year earlier, local realty experts said Friday.
But overall, the Greater Hartford Class A office market fared better than most experts anticipated in 2012, with about 200,000 square feet of empty space getting new occupants during the year, realty officials from CBRE/New England said Friday morning during their annual market overview event in downtown Hartford.
Meanwhile, commercial real estate sales activity in Greater Hartford hit their highest levels in nearly two decades in 2012 with about 2.75 million square feet worth of office buildings changing hands in deals that reached over $750 million. The deal flow was led by the sale of downtown Hartford’s CityPlace office tower, which was purchased by Massachusetts’s Commonwealth REIT for $102 million.
John M. McCormick, the executive vice president at CBRE/New England, said the positive market absorption was a good sign for the region, and he expects the trend to continue into 2013. He said much of the leasing activity this year will likely be impacted by hiring decisions from major Greater Hartford employers like Aetna, Travelers, Cigna and United Technologies.
The state of Connecticut’s anticipated purchase of downtown Hartford office space could also play a major role in the markets 2013 performance.
The Hartford Business Journal previously reported that the state is negotiating to purchase the two office towers at Connecticut River Plaza and the office building owned by The Hartford Financial Services Group at 55 Farmington Ave. McCormick said if those deals get done it would mean the state takes on an additional 850,000 square feet of space downtown, which would lower the central business district’s vacancy rate from 26 percent to 17 percent.
It would also add 2,500 new workers to downtown as the state consolidates some of its leased space in the suburbs and other parts of Hartford to downtown.
Meanwhile, the industrial market also had a banner year with 1.3 million square feet of vacant space finding new tenants in 2012. It was the highest absorption rate in the Greater Hartford market in the last 10 years, according to CBRE/New England’s Bill Bronson.
