Becoming an 18-hour city is a goal that Hartford can achieve. Significant progress has been made by the public and private sectors to revitalize Hartford’s downtown scene and reposition districts that have untapped potential.
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Becoming an 18-hour city is a goal that Hartford can achieve. Significant progress has been made by the public and private sectors to revitalize Hartford's downtown scene and reposition districts that have untapped potential.
Development has taken shape across multifamily projects in the core downtown region, retailers have expanded their footprint, and recent public transportation projects have seen great success. As these projects make their mark, the economic landscape of the downtown region is well positioned to improve.
Businesses often consider locating in urban settings because they present the opportunity to attract a skilled talent pool at a relatively lower relocation cost. If the Millennial-skilled workforce continues to populate downtown, office tenants operating out of Hartford's surrounding suburbs will begin the migration to the urban core as will out-of-market tenants who are looking for cost alternatives to locating in higher-cost cities.
The 750 new downtown multifamily units that have come online since the summer of 2015 have been met with strong demand exhibited by a tenant base of young, college-educated professionals.
Developers have had success in attracting this tenant base by incorporating modern finishes, amenity packages and concierge services into their unit offerings.
The number of available units at three of the city's more notable new multifamily developments (The Spectra Boutique Apartments at 5 Constitution Plaza, 777 Main Apartments at 777 Main St., and Front Street Lofts at 20 Front St.) is scarce.
With UConn's incoming downtown campus set to open in the fall of 2017, there could be an uptick in student demand for downtown living options.
iQuilt, CTfastrak gains
Projects coordinated by the public sector have been critical to the development of downtown Hartford's live, work and play culture. The iQuilt urban design plan and Intermodal Triangle project, both backed by $25 million of dedicated funds from the state's capital budget, have helped widen the promenades that run alongside Bushnell Park as well as walkways surrounding the areas of Union Station, Asylum Street and Pearl Street.
These projects will help transform the city's walkability by connecting local historical landmarks and popular amenities as well as ease transit flow between the traffic-dense areas of Main Street and Union Station.
The CTfastrak was declared a success for the region after original ridership projections were surpassed. The busway has been popular with downtown workers who are averse to traffic congestion. Many municipalities have found the busway to be advantageous to their local economies as developers and small businesses have gravitated to areas near corresponding stops.
The Department of Transportation plans to build on ridership success by expanding their service east of the Connecticut River.
Infrastructure is a topic that will soon be front and center on the agendas of state and city officials. The I-84 viaduct project and the CTrail Hartford Line study are both large-scale public outlay projects that propose to reduce traffic congestion and boost the region's economy. Businesses will closely monitor the trajectory of these projects as they consider future real estate decisions.
Statistically, the Greater Hartford office market (a market CBRE/New England tracks by five subdivisions: north, east, south, west, and the central business district, or CBD) has shown stable real estate fundamentals in 2016.
In Hartford's CBD, renewal transactions have dominated leasing activity overall. Many occupiers in Hartford's CBD have found renewing in place to be cost effective and in alignment with their business strategies.
Three major renewals were signed in 2016; Lincoln Financial Group recommitted to approximately 185,000 square feet at Metro Center (385 Church St.), Prudential Financial renewed on its lease of approximately 250,000 square feet at 280 Trumbull St., and law firm McCarter & English renewed its lease of approximately of 33,000 square feet at CityPlace.
In 2015, Hartford's office investment market saw strong demand with four CBD assets trading hands over the course of the year. Office investment sales activity slowed in 2016 as investor capital demonstrated a growing interest in investment-grade industrial property in the region. However, operators have continued to remain confident on the foundation of the market.
After winning the asset at auction, the ownership group of Goodwin Square (225 Asylum St.) have instituted an extensive capital improvement package that will reposition the office tower in addition to the adjoining 124-room boutique hotel and restaurant that are slated to open in early 2017.
Barring major macroeconomic headwinds, Greater Hartford office market fundamentals should remain composed in 2017.
Suzanne Duca is director of research for CBRE-New England.
