NORTHEAST SNAPSHOT, JANUARY 2006

Hartford, Connecticut Industrial Market

Robert Daglio Senior Vice President Partner CB Richard Ellis/ New England

Currently, rental rates for new construction product range from $5.75 per square foot triple net-leased to $6.75 per square foot triple net-leased. For existing properties, lease rates are running between $3.75 per square foot triple net-leased and $5 per square foot triple net-leased. Throughout the 68.2 million square feet of Hartford's industrial inventory, the overall vacancy rate stands at 11.5 percent.

Many industrial markets are most successful near airports, and Hartford supports this trend. Development has been strongest near in the North submarket, near Bradley International Airport. With good infrastructure and utilities already in place, the area is in excellent shape for new construction. In conjunction with these factors, and due to abundant land in the area, more than 3 million square feet of inventory has been added to the North submarket in the last several years. There is a variety of product as well, as some of the projects are speculative, and some have been build-to-suit. The build-to-suit projects are mostly being developed for retail companies desiring to locate closer to their stores and distribution centers.

The prolific industrial activity in the North submarket has yielded numerous significant projects. In Windsor, Connecticut, Griffin Land Properties has developed more than 500,000 square feet of industrial space, Ferraina Companies has developed 300,000 square feet of product, and Data Mail will occupy a 150,000-square-foot property currently under construction. In addition, TJX/HomeGoods is occupying a 443,000-square-foot space and Pepperidge Farms occupies a 264,000-square-foot property in Bloomfield, Connecticut; both buildings were constructed in 2003. Frank Sponzo currently is developing more than 100,000 square feet of industrial space and has already built 384,000 square feet of product in Bloomfield and Windsor. Furthermore, in Windsor Locks, Connecticut, Ford Motor Parts is occupying a 235,000-square-foot distribution center that was built in 2003, American Molding is under contract to utilize a 226,500-square-foot property, and Watkins Motor Freight just moved into an 81,000-square-foot facility.

Through the successes of current projects, developers are noting the possibilities that Hartford offers, and so new players to the market are planning industrial buildings in order to take advantage of these opportunities.

While there is not one major tenant absorbing a significant amount of space in the Hartford industrial market, most of the tenants are distributions users, although a few successful manufacturers are expanding as well. Recent lease signings in the North submarket include Northeast Utilities agreeing with Griffin Land to occupy 165,000 square feet in Bloomfield; Baron Institute of Technology leasing 290,000 square feet from Winstanley in East Windsor, Connecticut; Cuno signing on for 130,000 square feet in Enfield, Connecticut; and Bernies occupying 185,000 square feet in Enfield. In the South submarket, Asco has signed a lease for 315,000 square feet in Berlin, Connecticut, and in the East submarket, Hartford Provisions leased 128,000 square feet in South Windsor, Connecticut. In addition, Salamander Designs made a significant acquisition of an 83,000-square-foot space in Bloomfield.

The greatest abundance of land exists in the North submarket near Bradley International Airport; thus, most of the construction has occurred in this area, and development will continue to flourish here in the future. The airport's cargo traffic continues to increase, so the demand for space also has intensified. In addition to this area, in the Rocky Hill, Cromwell and Wallingford, Connecticut, areas, demand is still strong for industrial users, especially for those who need sites to serve exclusively the Connecticut markets.

— Robert Daglio is a senior vice president and partner with CB Richard Ellis/New England in Hartford, Connecticut.

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