NORTHEAST SNAPSHOT, MARCH 2011
CONNECTICUT RETAIL MARKET
The Connecticut retail market has seen a modest uptick in the past few months mirroring retailer sales in the holiday season. The glut of stores available for lease has moderated since 2009 but stores remain readily available in all markets throughout the state. There has been a decline in rental rates — from Greenwich to Torrington to Danielson — estimated to be in the range of 20 percent since 2008 and these have not rebounded to date. It could be said this is a good time to be shopping for a retail lease.
Most Connecticut retail developments plans have been put on the back burner for the last few years, which means that little new space has come on the market in the past 2 or 3 years. A few, however, are being marketed aggressively, including Harbor Point in Stamford, Front Street in Hartford and Storrs Center in Mansfield/Storrs.
Harbor Point, formerly an Antares project and now being developed by Building and Land Technologies, is an 80-acre development on a national scale with 350,000 square feet of retail, 350,000 square feet of office and 4,000 residential units. Fairway Market opened to enthusiastic shoppers in the autumn in an 80,000-square-foot store.
Front Street District, developed by HB Nitkin Group, is the final piece of the Adriaen’s Landing project in Hartford. The Connecticut Convention Center, Marriott Hotel, Wadsworth Atheneum Museum of Art and Connecticut Science Center anchor it. When completed in two phases, the project will include 150,000 square feet of entertainment, restaurants and retail. Cinema Grill anchors the first phase.
Storrs Center, a Leyland Alliance project and also multi-use, is just getting under way with delivery of the first phase scheduled for summer 2012. Storrs Center is designed to complement the University of Connecticut and to create a village environment where none exists today. Approximately 165,000 square feet will be devoted to restaurants, shops and nightlife with another 26,500 square feet planned for second-floor office space. The 690 residential units will include rentals, condominiums, and townhouses.
The standout component of retail growth this past year and likely to continue in 2011 is the supermarket. While Shaws has decamped from the state and A&P has reduced its presence, Big Y, ShopRite and Stop & Shop are active players that have taken over the closed stores or opened new stores. While all sizes of store space appear to be readily available for most uses, big boxes suitable for super markets will not remain vacant for long.
Other bright spots are in value retailing. Discounters like TJ Maxx, Marshalls, Ocean Job Lot, Family Dollar and Dollar Tree are looking throughout the state with good success — except within Fairfield County, where higher rents tend to work against locating a store.
Strong searches are also prevalent in the fast food and restaurant areas especially among franchisees that commit to a number of locations when securing the franchise. Among the more active are Buffalo Wild Wings, Tenga, Panera Bread, Five Guys, Hungry Howie’s and Energy Kitchen. Of course, the old standbys, Dunkin Donuts and Subway, continue to add to their stables of sites.
On the dark side of the retail picture, AJ Wright, a division of TJX, will shut down entirely. Two locations of the company’s six Connecticut stores will open as another division of TJX. The other four locations will go dark, adding approximately 120,000 square feet of space to market availability. Towns affected by closures are Bridgeport, Hamden, West Haven and Wethersfield.
The prospects for 2011 are definitely reflective of the economy and, more to the point, the job market. Retail real estate tends to be a lagging indicator of change; if unemployment in Connecticut and the Northeast remains high, then retail real estate is unlikely to return to the robust times experience pre-2008 any time soon. Thus, owners will continue to lease in a very competitive market. At least brokers have the good fortune of having a good supply of inventory to present to their clients.
— William Grad, director of leasing for the Greenwich, Connecticut, office of Aries, Deitch & Endelson
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