🔒This CT city’s multifamily market has grown at a faster rate than NY, Boston metro areas

While the multifamily apartment boom has reached nearly all corners of Connecticut in recent years, there may be no hotter market than Stamford.

Connecticut’s third-most populated city has added about 15,000 apartment units over the past decade, growing its multifamily inventory by about 56% to 40,000 units.

Stamford — which has more than 136,000 residents — since 2014 has experienced a faster apartment growth rate, on a percentage basis, than the New York and Boston metropolitan areas, according to Victor Nolletti, executive managing director of commercial real estate firm Institutional Property Advisors.

Driving that growth, experts say, is Stamford’s proximity to New York City, high quality of life, and diverse base of corporate employers.

“It’s a highly desirable place to live,” Nolletti said. “It’s become a 24-7 city, so you have all the amenities — arts, entertainment, dining — that you see in a large urban center.”

He said Stamford’s multifamily market attracts people working in and around Fairfield County and New York City, but it’s also a popular destination for empty-nesters.

“People don’t realize what a high quality of life Connecticut can provide, in particular lower Fairfield County, the Stamford-Norwalk metro,” he said. “You’ve sold the big house, you want a class-A apartment in Harbor Point overlooking the water with all those nice, walkable amenities, restaurants, resident services at your fingertips, a nice big park. It’s hard to beat.”

Harbor Point is a mixed-use waterfront development on Stamford’s South End that includes high-rise apartments, office buildings, restaurants, parks, retail spaces and marinas.

Nolletti said about 7,000 of the 15,000 units built in the last decade are located in the city’s central business district or Harbor Point, which was developed by Stamford-based Building and Land Technology.

And, despite all the new units, the apartment occupancy rate in the city has remained strong, currently around 95%.

Meantime, rent growth has moderated somewhat since the COVID-19 pandemic, but rental rates on renewals are still growing from 3% to 5%, he said.

The average apartment rent in Stamford is $2,696 per month, which is 73% above the national average, but well below the average New York City rent of $3,913, according to Apartments.com.

“Those underlying metrics continue to support continued construction and investment in Stamford and Fairfield County and the state of Connecticut,” he said.

‘Strong underlying fundamentals’

Stamford’s apartment construction pipeline remains active, Nolletti said, despite elevated construction and borrowing costs that “will most likely mute near-term aggressive expansion.”

He said there are about 2,500 units under construction or in planning.

Most multifamily projects are new construction, but more of them may come from converting office buildings into residential space as construction costs and office vacancy rates remain elevated, he said.

For example, Branford-based MB Financial plans to convert the former Worldwide Wrestling Entertainment headquarters, at 1241 E. Main St., into an apartment building with 80 or 90 apartment units.

MB Financial bought the six-story, 90,000-square-foot building for $3.75 million in December because of its location, CEO Michael Massimino said.

“The location of the asset overlooking the Long Island Sound and the proximity to the Darien line is really what drew us the most,” he said.

MB Financial plans to demolish the building’s interior to make way for larger apartments with 10-foot ceilings, given the building’s expansive floor space, Massimino said.

Plans include refurbishing a roughly 5,000-square-foot rooftop deck and, potentially, putting some penthouse units in an enclosed area that currently houses the building’s mechanical systems.

Massimino said he hopes to get the proposal before the city’s planning boards in the next couple of months.

Stamford-based RMS Companies last year debuted The Asher, an eight-story luxury apartment building with 228 units, at 150 Broad St.

Like many of the new apartments in the city, the property is highly amenitized. It has a fitness center with yoga and spin rooms, coworking space, luxury billiard tables, a multisport golf simulator, and a rooftop pool and lounge, among other perks.

“The site is in a prime downtown location, which had sat vacant for many years,” said Kyle Salvatore, RMS’ director of multifamily asset management and development. “We are bullish on the Stamford market and believe in the vibrancy of the downtown area as a destination for residents to live.”

RMS also has plans to build a seven-story, 280-unit apartment complex on the site of the former Burlington Coat Factory property, at 74 Broad St.

Stamford has experienced a considerable increase in apartment-unit inventory in just the past two years, said Leah Kagan, the city’s director of economic development.

“That has had an impact on vacancy rates, which have slightly increased, but we expect that as apartment units fill up, it’ll begin to decrease,” Kagan said. “There’s just been a really strong demand for this area. It’s a desirable place to live, whether you are working remotely, locally or commuting into New York City. We anticipate that will not die down anytime soon.”