Web Sites, Documents and Articles >> Hartford Courant  News Articles >

Happy Office Surprise: Downtown Hartford

By KENNETH R. GOSSELIN | Courant Staff Writer

May 20, 2008

Scott H. Smith looked at office space in downtown Hartford last fall for his insurance brokerage and was surprised by how many people were on the street at lunchtime.

Smith ran into at least half a dozen people he hadn't seen in months.

He had hoped to sign a new lease in West Hartford Center, the location of his firm for 26 years. But finding suitable space there proved impossible. Two weeks ago, Smith signed a lease for the 15th floor in the 20 Church Street office tower informally known as the "Stilts Building" in downtown Hartford.

Smith's firm, which provides insurance for hard-to-insure commercial clients including corporate directors, expects to move in October and bring 75 employees downtown from its West Hartford office.

The move from suburb to city isn't unusual as an increasing number of companies, particularly in financial services, are leasing smaller spaces downtown taking advantage of a tenant's market where many landlords are offering generous incentives.

What is out of the ordinary, however, is that downtown Hartford was Smith's second choice for his insurance brokerage, S.H. Smith & Co. Inc.

It's more typical for tenants moving to or staying in downtown Hartford to make that decision as their first choice, rather than as a backup plan. Then again, Smith didn't figure space in West Hartford Center would be so tight, even with new office construction at Blue Back Square.

Downtown Hartford won out because Smith didn't want the firm to move to an office park where you would have to jump into a car to get anywhere.

And he added, "Once we made the decision, there was the visceral appeal of doing something for the vitality of the city."

Over the years, the firm had come to see the walkable center in West Hartford as a perk for employees and a way to keep productivity up. Being close to restaurants meant not a lot of time was lost on the lunch hour, and it was easy to meet clients.

That, of course, was historically the draw for downtown Hartford, and Smith discovered it's still true.

"We wanted them in a place where they are not in the woods," Smith said.

The lease comes at a time when the downtown Hartford office market faces rising vacancy as MetLife moves to Bloomfield. Commercial real estate brokers say smaller leases like the one signed by S.H. Smith could help whittle away at the loss of MetLife, which is leaving 375,000 square feet in CityPlace I.

It's difficult to attract large tenants to downtown Hartford because there are few large blocks of space available. There hasn't been new office construction in the central business district in nearly 20 years because rents have not risen substantially.

That leaves openings for tenants such as S.H. Smith that are looking for smaller spaces at value pricing in a vibrant area. Average asking rents for prime office space downtown range from $20 to $23 a square foot, compared with $23 to $28 in West Hartford Center, said John M. McCormick, executive vice president at commercial real estate services firm CB Richard Ellis in Hartford.

Blue Back Square is an exception. Average asking rents are approaching $40 a square foot.

The cost of leasing office space in downtown Hartford used to be much higher than in the suburbs, but new construction in the suburbs in recent years has created high-end options outside the city.

McCormick said the departure of MetLife and the prospect of vacancy for prime space rising from 13 percent to 20 percent has made landlords more aggressive with incentives such as months of free rent or allowances for space renovations.

McCormick, whose firm represented both S.H. Smith and landlord Hampshire Cos., said the story isn't just about the numbers. The leasing is about growing confidence, with the convention center and more people living downtown.

"There's a buzz about downtown," McCormick said.

Smith isn't a stranger to the city, having served on the board of the Wadsworth Atheneum Museum of Art. He also flirted with the idea of moving downtown in the late 1980s, but he found the rents too high.

His company is just the kind of firm the city wants to attract. When Smith bought and renamed it in 1982, the company had three employees and $3 million in gross written premiums. Today, the company employs 112 75 of them in West Hartford and last year had $220 million in gross written premiums.

Smith's lease at 41 N. Main St. expires in October. The company now occupies two floors, and he wanted all employees on one floor so time wasn't wasted. The new lease in Hartford is for 21,000 square feet, about 5,000 square feet more than in West Hartford.

Employees will have to pay for parking, which is now free. But Smith said the company has decided to pay 80 percent of those costs.

Most of the feedback from employees has been positive; one employee quit over the move. Several employees are living in new downtown apartments, he said.

Smith, a resident of Washington, Conn., said the move will add at least another 20 minutes during rush hour to his 90-minute morning commute.

"My wife thinks I'm out of my mind," Smith said.

Reprinted with permission of the Hartford Courant. To view other stories on this topic, search the Hartford Courant Archives at http://www.courant.com/archives.
| Last update: September 25, 2012 |
Powered by Hartford Public Library  

Includes option to search related Hartford sites.

Advanced Search
Search Tips

Can't Find It? Have a Question?