Hartford's Office-Vacancy Rate Hovers At 19 Percent
KENNETH R. GOSSELIN
March 31, 2009
UnitedHealth Group's plans to stay in downtown Hartford and move to CityPlace came as welcome news in the teeth of the recession.
But it won't do much for the city's office-vacancy rate.
UnitedHealth will vacate 460,000 square feet at Connecticut River Plaza near the city's convention center and is expected to occupy at least 400,000 square feet in the CityPlace I building next year after $35 million in renovations.
Although the UnitedHealth move plugs a hole left by the departure of MetLife from downtown last year, it will open up a large block of space by the riverfront.
New figures to be released this week show that downtown Hartford's vacancy rate for prime office space was 19 percent in the first quarter of this year, compared with about 14 percent a year ago, according to the commercial real estate services firm Cushman & Wakefield of Connecticut.
The jump in vacant Class A office space is significant, but commercial real estate brokers say it is almost entirely attributable to MetLife's move from downtown Hartford to Bloomfield. Otherwise, the office market has held fairly steady even as the recession has deepened.
"There's been a little slippage but nothing dramatic," said Jonathan K. Putnam, a commercial real estate broker at Cushman & Wakefield's Hartford office.
Putnam said he expects that some companies will vacate office space in the city's central business district in coming months, but he doesn't expect vacancies to rise to the mid- or high-20 percent range, as they did in the recession of the early 1990s.
The average asking rent for Class A space increased to $23.43 per square foot in the first quarter, compared with $22.48 a year earlier, Cushman reported.
The market would be considered robust if Class A space were hovering at about 10 percent vacancy.
A large block of space at Connecticut River Plaza could prove attractive to a large tenant once an economic recovery gets underway, said Christopher Ostop, a broker at Jones Lang LaSalle, the building's leasing agent.
It is rare for such a large block of space to come on the market, and there is ample parking.
"It's similar to what has been built up in the suburbs," Ostop said.
Reprinted with permission of the Hartford Courant.
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