NORTHEAST SNAPSHOT, JANUARY 2005
Hartford, Connecticut, Industrial
In 2004, the industrial market in Hartford, Connecticut, and
surrounding areas began to improve upon the low levels of
activity seen in the previous 2 years.
According to Mark Duclos, managing director of Sentry Commercial
Real Estate Services Inc. of Hartford, the market has become
increasingly active throughout the region, including cities
just north of Hartford into Massachusetts. The significant
difference between the past 12 months and the previous 24
months is the appearance of expanding companies versus a predominantly
investor-driven market, says Duclos. The combination
of local companies expanding and outside companies with large
distribution requirements entering the market is driving down
vacancy rates and fueling build-to-suit development.
Most development in the Hartford market is build-to-suit;
speculative development has been limited, albeit relatively
successful. The reason for the design/build success
can mostly be attributed to the lack of quality warehouse/distribution
product in the region, notes Duclos. The difficulty
in finding economically viable development opportunities is
one major reason for the scarcity of speculative building.
Even as industrial activity picks up steam, there have been
few new developments in the greater Hartford area that have
had a significant impact on the market. The most significant
speculative project completed in the past 12 to 18 months
is Griffin Lands multi-building high-bay warehouse development
on Rainbow Road and International Drive in Windsor. These
high-bay industrial buildings are filling a long-known void
in the marketplace, says Duclos. Tenants have
appreciated the product and paid premium prices as well.
Rental prices in the area run from $2.50 to $4.50 for triple-net
warehouse space with 16-foot to 18-foot ceiling heights; $4
to $6.25 triple-net rate for 22-foot to 30-foot-ceiling heights;
and $5 to $7 triple-net rate for tech space.
High-tech space has had limited demand; property owners are
trying to attract tenants such as warehouse users and sales/service
businesses. Manufacturers though continuing to experience
decreasing activity throughout Connecticut have completed
a number of transactions in the past 6 months, says Duclos.
As the economy improves and the real estate markets subsequently
follow, the industrial market in the Hartford area will continue
to build upon recent signs of growth. One area to watch for
growth in the near future is the Interstate 291 corridor from
Manchester to Bloomfield through South Windsor. Businesses
will continue to pursue these areas due to improved traffic
access to most markets along the relatively new I-291 corridor,
as well as the increase in new retail and residential developments
in the area.
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