HARTFORD MARKET OVERVIEW REAL ESTATE OUTLOOK · CB Richard Ellis - N.E. Partners, LP, a CBRE Joint...

CB Richard Ellis - N.E. Partners, LP, a CBRE Joint Venture

HARTFORD MARKET OVERVIEW

REAL ESTATE OUTLOOK

JEFFREY M. LIVINGSTONMANAGING DIRECTOR, PARTNER

WELCOME


2014 REAL ESTATE OUTLOOK



KEYNOTE SPEAKERS

Edward GuayPresident & Founder, Wintonbury Risk Management

Susan HerbstPresident, University of Connecticut

CBRE/NE HARTFORD OFFICE PANEL



John M. McCormickExecutive Vice President, Partner

HARTFORD CBDOFFICE MARKET

CAPITAL MARKETS

Patrick R. MulreadySenior Vice President, Partner

Christopher T. MetcalfeFirst Vice President

GREATER HARTFORDINDUSTRIAL MARKET

SUBURBAN OFFICE MARKET

Michael S. PuzzoFirst Vice President, Partner

PATRICK R. MULREADYSENIOR VICE PRESIDENT, PARTNER

CAPITAL MARKETS UPDATE




2013 TRENDS

DISTRESSED SALES DEBT MARKET DEMAND


CENTRAL CT OFFICE SALES VOLUME

$0

$50,000,000

$100,000,000

$150,000,000

$200,000,000

$250,000,000

$300,000,000

2005 2006 2007 2008 2009 2010 2011 2012 2013

Sales Volume ($)

$0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

Total SF Sold

SUBURBAN

2013 HIGHLIGHTED TRANSACTIONS

Sale Price: $106,300,000 or $236 psf

Property: 450,000 SF

Seller: Ronus Properties

Buyer: Starwood Capital Group

Lender: Wells Fargo

Occupancy: 97%

BLUE BACK SQUARE, WEST HARTFORD

CENTRAL BUSINESS DISTRICT


Sale Price: $22,700,000 or $78 psf


Seller: C3 Capital

Buyer: The Fremont Group

Lender: Farmington Bank

Occupancy: 83%

METRO CENTER, HARTFORD

SUBURBAN


10-50 STANFORD DRIVE FARMINGTON

2 BATTERSON PARK ROAD,FARMINGTON

195 FARMINGTON AVENUEFARMINGTON


Property: 61,000 SF

Seller: 627 Acquisition Co.

Buyer: Mark Siegal & Brad Baran

Lender: Peoples’s Bank (MA)

Sale Price: $900,000 or $47 psf

Property: 19,000 SF


Buyer: Industrial Builders & Realty

Lender: All Cash


Property: 41,000 SF


Buyer: UConn Health Center

Lender: All Cash

Farmington Portfolio

CENTRAL BUSINESS DISTRICT & SUBURBAN


45O COLUMBUS BLVDHARTFORD

525 BROOK STREET ROCKY HILL

103 WOODLAND STREETHARTFORD

55 FARMINGTON AVE HARTFORD

Occupier Driven Sales



Seller: The Hartford

Buyer: State of Connecticut


Property: 55,000 SF

Seller: VNA Healthcare

Buyer: Keystone Companies

Tenant: St. Francis Hospital


Property: 54,000 SF

Seller: Mutual of Omaha

Buyer: MGRE Real Estate

Tenant: CREC



Seller: FBE Limited

Buyer: State of Connecticut

SUBURBAN




Seller: SJW Land Company

Buyer: Georgia Pacific Corp.

Lender: All Cash

Occupancy: 100%

1 HELMSFORD WAY, WINDSOR

SUBURBAN




Seller: Winstanley Enterprises

Buyer: Inland Real Estate Group

Lender: People’s United Bank

Occupancy: 100%

383 MIDDLE STREET, BRISTOL

SUBURBAN

2013 FORECLOSURES

200 EXECUTIVE BOULEVARDSOUTHINGTON

400 EXECUTIVE BOULEVARDSOUTHINGTON

155,000 SF

GRIFFIN PARK NORTHWINDSOR

378,000 SF123,690 SF


2014 MARKET FORECAST

� 2014 = “Bridge” Year

� Active Market

� Strong Refinance Market

� Premium for Stabilized Assets

SUBURBAN

2013 CMBS ISSUANCE

Source: Commercial Mortgage Alert, October 2013

JOHN M. MCCORMICKEXECUTIVE VICE PRESIDENT, PARTNER

HARTFORD OFFICE MARKET



HARTFORD CBD


“LIVE, WORK, PLAY”

480 Units Under Construction

179 ALLYN STREETUnits 63Delivery 2014

201 ANN STREETUnits 26Delivery 2014

HARTFORD CBD

MULTI-HOUSING UPDATE

FRONT STREETUnits 119Delivery 2014/2015

5 CONSTITUTION PLZUnits 193Delivery 2014

COLT GATEWAYUnits 79Delivery 2014

1

1

668 Additional Units

99 PRATT STREETUnits 30Delivery 2015

HARTFORD CBD

MULTI-HOUSING UPDATE

101-111 PEARL STREETUnits 157Delivery 2015

3 CONSTITUTION PLZUnits 195Delivery 2015

777 MAIN STREETUnits 286Delivery 2015

1

1

HARTFORD CBD - CLASS A

2013 AT A GLANCE

5.8M SFINVENTORY

17.7%VACANCY

53K SFABSORPTION

$22.94ASKING RENT

556,000 SF

CONNECTICUT RIVER PLAZA

HARTFORD CBD

2013 GAME CHANGER

State of CT executes Phase I of consolidation

strategy

HARTFORD CBD

OFFICE LEASING UPDATE

One StateStreet

CityPlace I CityPlace II GoodwinSquare

100 PearlStreet

280 Trumbull Street

242 TrumbullStreet

One FinancialPlaza

10 StateHouseSquare

90 State HouseSquare

One ConstitutionPlaza

100 ConstitutionPlaza

20 Church Street

Metro Center

ASKING RATES: $20 - $25/SF GROSS

HARTFORD CBD HORIZON STUDY

Building Systems & ParkingLeased SpaceSpace Available-Full or Partial

HARTFORD CBD

LARGE BLOCK VACANCIES

1

910

13

5

6

7

14

8

HARTFORD CBDCLASS A OFFICE PROPERTIES

CityPlace II

CityPlace I

Goodwin Square

7

8

12

9

11

10

13

1

350 Church Street14

15

One State Street

100 Pearl Street

280 Trumbull Street

242 Trumbull Street

One Financial Plaza

10 State House Square

90 State House Square

1 Constitution Plaza100 Constitution Plaza

20 Church Street

1112

57,000 SF 175,000 SF166,000 SF

52,000 SF

116,000 SF

HARTFORD CBD

TYPICAL CORPORATE DEMAND

HARTFORD CBD

URBAN MIGRATION

280 TRUMBULL STREET

8,500 SF

100 PEARL STREET

8,500 SF

ONE STATE STREET

15,000 SF

280 TRUMBULL STREET

25,000 SF

CITYPLACE II

9,000 SF

HARTFORD CBD

NEW TO CBD

HARTFORD CBD

KEY EXPANSIONS

20 CHURCH STREET

25,000 SF

ONE AMERICAN ROW

62,000 SF

ONE FINANCIAL PLAZA

70,000 SF

HARTFORD CBD

KEY RENEWALS

1 CONSTITUTION PLAZA

125,000 SF

UNITED HEALTHCARE CTR

23,000 SF

ONE STATE STREET

23,000 SF

HARTFORD CBD

RETAIL & ENTERTAINMENT

FRONT STREET: - Spotlight Theatres

- Capital Grille - Infinity Music Hall (Spring 2014) - Ted’s Montana Grill (Spring 2014) - Nix’s Seafood (Summer 2014)

Retail:

75% Leased

Residential:

115 units

HARTFORD CBD

RETAIL & ENTERTAINMENT

XL CENTER:

- New Management with Global Spectrum - $1.8M in Renovations - UCONN Athletics-Hockey East - AHL (Hartford Wolfpack)



� The Changing Landscape

- “Live, Work, Play, LEARN”

- Continued Absorption in the CBD

- Financial Services, Law Firm, Healthcare Demand

- Downtown North Development Plan


CHANGING LANDSCAPE DOWNTOWN NORTH

HARTFORD CBD

2014 THE CHANGING LANDSCAPE

MICHAEL S. PUZZOFIRST VICE PRESIDENT, PARTNER




SUBURBAN MARKET OVERVIEW

� Demand and Supply

- Key Renewals, Relocations & New Leases

- Healthcare/Medical Office Expansion

- Limited Availability in Key Markets

- New Vacancies

� 2014 Forecast and Trends



-90K SFABSORPTION

$20.12AVG. RENT

SUBURBAN OFFICE MARKET - CLASS A

2013 AT A GLANCE

9.0 M SFINVENTORY

17.5%VACANCY


DEMAND: KEY RENEWALS

93,000 SF

80 LAMBERTON ROADWINDSOR

9 FARM SPRINGS ROADFARMINGTON

69,000 SF

1690 NEW BRITAIN AVENUEFARMINGTON

49,000 SF

5&7 WATERSIDE CROSSINGWINDSOR

55 CAPITOL BOULEVARDROCKY HILL

34,000 SF

500 ENTERPRISE DRIVEROCKY HILL

18,000 SF29,000 SF


DEMAND: KEY RELOCATIONS


DEMAND: NEW USERS

22,000 SFnew corporate hq

18,000 SFnew to connecticut

86 HOPMEADOW STREETSIMSBURY

5 BATTERSON PARK ROADFARMINGTON

1290 SILAS DEANE HIGHWAYWETHERSFIELD

5 BATTERSON PARK ROADFARMINGTON

30,000 SF

406 FARMINGTON AVENUEFARMINGTON

15,000 SF41,000 SF


DEMAND: HEALTHCARE


SUPPLY: LIMITED AVAILABILITY

Somerset Square: 6% Vacancy

West Hartford Center:

5% Vacancy


SUPPLY: NEW VACANCIES

192,000 SF

26,000 SF

38,000 SF

41,500 SF

RIVERVIEW SQUAREEAST HARTFORD

SOMERSET SQUAREGLASTONBURY

RIVERBEND OFFICE PARKEAST HARTFORD

PONDVIEW CORPORATE CENTERFARMINGTON


FORMER OWNER OCCUPIED SPACE

641,000 SF 500,000 SF

SIMSBURY BLOOMFIELD



� Forecast and Trends

- Modest 2014 Absorption

- Renewals vs. Relocations

- Demographics & the Workplace

2010 2020

14% 33%

Workforce: Echo-Boomers


CHANGING DEMOGRAPHICS


THE CHANGING WORKPLACE


THE CHANGING WORKPLACE

HARTFORD

CHRISTOPHER T. METCALFEFIRST VICE PRESIDENT

INDUSTRIAL MARKET UPDATE



13.6%AVAILABILITY

356K SFABSORPTION

$4.66AVG. RENT

HARTFORD INDUSTRIAL MARKET

2013 AT A GLANCE

ASKING RENTS PROJECTION

Flex/R&D $6.00 - $7.50/SF

Manufacturing $4.00 - $5.00/SF

WarehouseNew $5.75 - $6.25/SF

Warehouse10-20 Yrs Old $4.50 - $5.50/SF

Warehouse20+ Yrs Old $2.50 - $3.50/SF


2013 AT A GLANCE

(2,500,000)

(2,000,000)

(1,500,000)

(1,000,000)

(500,000)

0

500,000

1,000,000

1,500,000 $

2008 2009 2010 2011 2012 2013


HISTORICAL ABSORPTION

(2,500,000)

(2,000,000)

(1,500,000)

(1,000,000)

(500,000)

0

500,000

1,000,000

1,500,000 $

2008 2009 2010 2011 2012 2013 2014

Forecast


HISTORICAL ABSORPTION


2013 INVESTMENT SALES ACTIVITY

Sale Price: $8,300,000 or $44 per SF

Property: 185,000 SF Warehouse/Distribution Center

Seller: First Industrial REIT

Buyer: The Fremont Group

29 RESEARCH PARKWAY, WALLINGFORD


2013 USER SALES ACTIVITY



Seller: New Boston Fund

Buyer: Nixon Medical Uniform

71 GEORGE STREET, EAST HARTFORD


2013 USER SALES ACTIVITY



Seller: Winstanley Enterprises

Buyer: Connecticut Spring & Stamping

28 SPRING LANE, FARMINGTON


2013 LEASING ACTIVITY

Size: 310,000 SF

Landlord: The Hampshire Cos.

Tenant:

353 ALUMNI ROAD, NEWINGTON



297 STATE STREET, NORTH HAVEN

Size: 105,000 SFLandlord: Mountain Development/Marcus Partners

Tenant:



311 PRESTIGE PARK ROAD, EAST HARTFORD

Size: 111,000 SFLandlord: The Fremont Group

Tenant:


2013 NEW CONSTRUCTION ACTIVITY

1,016,116 SF Footprint1,502,022 SF GFA977,959 SF Ground Level474,772 SF Mezzanine41,704 SF O�ce79 Loading Docks231 Trailer Spaces900 Car Spaces

DAY H

ILL ROA

D

Property: 1,000,000 SF Regional Distribution Center

Seller: Griffin LandTenant:


2013 NEW CONSTRUCTION ACTIVITY

Property: 200,000 SF Regional Distribution Center & Showroom Seller: DiScalaBuyer:

641 MIDDLE STREET, MIDDLETOWN



� Pricing Stabilization

� Emphasis on Labor Study

� Continued Large Build-to-Suit Activity

� Continuing Trend of User Sales

HARTFORD MARKET OVERVIEW REAL ESTATE OUTLOOK · CB Richard Ellis - N.E. Partners, LP, a CBRE Joint...

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