Hartford Hartford Office and Industrial Markets Connecticut Commercial Real Estate Conference March 6, 2012 BARTRAM & COCHRAN National Industrial Trends BARTRAM & COCHRAN National Industrial Vacancy BARTRAM & COCHRAN National Industrial Rents BARTRAM & COCHRAN Hartford Industrial Market • 89,000,000 – 97,000,000 SF Market • Major firms are relying on CoStar for data • Functionally obsolete buildings distort the statistics • Industrial vacancy of 9.5 to 13.3% • Market has swung from negative absorption to positive • 400,000 SF of construction projected from 2012-15 • Market cycle – last phase of recession. Good buildings in recovery. Six- seven years for the market to balance • 8.5 to 9% going in cap rate for industrial/ manufacturing BARTRAM & COCHRAN Industrial Inventory East 25% City 6% North 34% South 16% West 19% BARTRAM & COCHRAN Industrial – Major Leases Tenant Address Coca Cola Company 555 Taylor Road Location Enfield Fostick Corporation 129 Worthington Berlin SF 278,207 250,000 InfoShred LLC ( short term temp) 8 Craftsman Road East Windsor 75,000 Fletcher-Terry Company, LLC 91 Clarke Drive East Berlin 45,000 Allstate Insurance Company 15 Bradley Park Rd East Granby 40,420 Environmental Office Solutions 130 Prestige Park Rd East Hartford 37,044 ATG Rehab 65 Inwood Rd Rocky Hill 23,420 HD Supply Waterworks Ltd One Hartford Sq. New Britain 21,035 Oxford Performance Materials 30 South Satellite Rd South Windsor 16,193 Northeast Air Time Gymnastics 215 Moody Road Enfield 16,000 Thermo Fischer Scientific 2-8 Progress Drive Manchester 15,000 BARTRAM & COCHRAN Industrial – Major Renewals Tenant Address City SF FedEx Ground Packing Systems 758 Rainbow Road Windsor 105,300 JDS Uniphase Corporation 45 Griffin Road S. Bloomfield 84,000 Gifted Expressions 60 Prestige Park Rd East Hartford 47,920 Keystone Automotive Industries 50 Utopia Road Manchester 45,000 Lego Systems, Inc 555 Taylor Road Enfield 30,000 Adaptive Optics Associates 121-141 Prestige Park East Hartford 27,581 Superior Electric Holding Group 28 Spring Lane Farmington 27,097 Cronin and Company LLC 50 Nye Road Glastonbury 22,557 DHL Express USA, Inc. 141 South Street West Hartford 22,000 Quality Inspection Services 275 Progress Drive Manchester 18,000 Pilot Freight Services, Inc. 25-27 Kripes Road East Granby 16,320 BARTRAM & COCHRAN Top Industrial Sales Building City SF Price $ / SF 1 Hartford Square New Britain 564,000 $3,500,000 $6 1 Griffin Road South (LESRO) Bloomfield 268,285 $4,292,415 $16 83 Gerber Rd (TicketNetwork) S. Windsor 194,000 $7,000,000 $36 180 Moody Rd Enfield 166,000 $2,200,000 $13 231 Weston Street Hartford 119,790 $1,100,000 $9 265 Rev. Moody Overpass (Restaurant Depot) Hartford 103,680 $4,100,000 $40 90 Meadow Rd Windsor 64,000 $2,220,000 $34 101 Industrial Park Road Vernon 40,000 $779,500 $19.50 10 Eastern Park Road East Hartford 40,000 $1,200,000 $30 97 Hammer Mill Road Rocky Hill 28,450 $1,150,000 $40 99 Hammer Mill Road Rocky Hill 27,500 $1,450,000 $53 170 Weston Street Hartford 26,576 $1,325,000 $50 BARTRAM & COCHRAN National Office Trends BARTRAM & COCHRAN National Office CBD Vacancy BARTRAM & COCHRAN National Office Class A Asking Rates BARTRAM & COCHRAN Hartford Office Market • 25,000,000 SF multi-tenant building market • Slowly improving activity – going from an average loss of 1,900,000 SF a year for three years to projected (depending on those interviewed) sharply slower losses to positive absorption • No major new-to-market leases • Market cycle: last phase of the recession, poised for recovery • Stabilized market 7-8 years for CBD, 5 years for suburbs • Going in cap rate 9.5% (CBD), 8.75% (suburban) BARTRAM & COCHRAN Hartford Office 4Q11 Market Rentable (SF) Vacancy Rate Sublease Rate 2Q11 YTD (%) (%) Leasing CBD 8,000,000 28% 0.70% -85,000 Average Asking Rate ($/ SF/ YR) $21.00 Outside CBD 2,200,000 10% 0.25% 5,000 $18.50 City Total 10,200,000 25% 0.60% -80,000 $20.30 North 3,235,000 24% 2.30% -39,000 $16.00 West 5,900,000 18.5% 4.20% -45,000 $20.25 South 3,200,000 20.8% 0.60% 78,000 $18.50 East 3,167,590 12% 0.40% -80,000 $20.00 Overall 25,670,000 22% 1.88% -166,000 $19.25 BARTRAM & COCHRAN Impact of Owner-Occupied Type Multi-tenant Owner occupied Total SF 25,670,000 12,500,000 38,170,000 BARTRAM & COCHRAN % Vacancy 22% ? 2011 Major Office Leases Tenant Location City SF UBS Realty Investors 10 State House Square Hartford 48,279 Paychex Corporation 714 Brook Street Rocky Hill 32,351 Marsh USA 20 Church Street Hartford 24,647 Pert Group The Exchange Farmington 23,000 Ct Children's Medical Center 500 Enterprise Drive Rocky Hill 22,071 Hartford Healthcare One State Street Hartford 22,000 Ovation Benefits 5 Batterson Park Rd Farmington 19,542 Hangar Prosthetics & Orthotics 10 County Line Road Cromwell 14,220 Jade Marketing Group, LLC 65 Memorial Road West Hartford 11,758 Integralis Inc. 310 West Newberry Road Bloomfield 11,361 ATG - Connecticut Inc. 1111 Cromwell Avenue Rocky Hill 11,170 Ameriprise Financial CityPlace II Hartford 10,000 AH Harris Corporate Center West West Hartford 10,000 BARTRAM & COCHRAN 2011 Major Office Renewals / Expansions Tenant Location City SF City of Hartford 960 Main Street Hartford 66,281 Conning & Company 755 Main Street Hartford 55,624 ValueOptions 500 Enterprise Rocky Hill 44,675 Tymetrix Inc. 20 Church Hartford 24,647 East Hartford 40,812 Ct Children's Med. Center 60 Hartland American Express 242 Trumbull Street Hartford 21,465 Stubhub, Inc. 2 Gateway Blvd East Granby 20,457 Carousel Industries 10 Griffin Road N. Windsor 18,000 Legal Aid 999 Asylum Hartford 18,000 Grump Group Farm Glen Farmington 17,684 Corporate Translations 77 Hartland Street East Hartford 17,330 Dechert 90 State House Sq. Hartford 15,544 BARTRAM & COCHRAN Office Sales Address City SF Price $ / SF 90-100 Avon Meadow Avon 20,000 $900,000 $45 1577 New Britain Avenue Farmington 21,000 $1,500,000 $71 135 South Road Farmington 35,000 $2,800,000 $80 100 Western Blvd Glastonbury 25,537 $3,400,000 $133 99 Pratt & 196 Trumbull Hartford 100,000 $1,000,000 $10 Talcott Plaza Hartford 103,000 $1,230,000 $12 1 Acmat Plaza New Britain 75,000 $2,800,000 $37 95 Glastonbury Blvd Glastonbury 148,000 $15,500,000 $104 BARTRAM & COCHRAN Academic Tenant Address CCMC 300 John Downey Dr. New Britain New Lease 48,000 CREC U of H Asylum Avenue Hartford Campus 229 Trumbull St Hartford 26,208 St Joseph's College City BARTRAM & COCHRAN Type Renewal & Expansion Expansion SF 10,000 Institutional • CREC buying land/ building/ leasing/ renovating seven magnet schools, including Avon, Hartford, Enfield and New Britain • Hartford Hospital building parking garage • UCONN Medical $1 billion expansion • Jackson Lab $1.1 billion development • State considering buying office buildings BARTRAM & COCHRAN Jackson Lab BARTRAM & COCHRAN Bio-Science State to create new bio-science enterprise zones in: • Hartford • Farmington • New Britain • Plainville • Bristol BARTRAM & COCHRAN Sources • • • • • • • • • • CBRE Colliers CoStar Group Cushman & Wakefield Grubb & Ellis Integra Jones Lang LaSalle RM Bradley Sentry Commercial S/L/A/M Collaborative BARTRAM & COCHRAN Thank You Maura M. Cochran, CRE, SIOR BARTRAM & COCHRAN 64 Pratt Street Hartford, CT 06103 860 549-5000 x 1 mcochran@bartramandcochran.com BARTRAM & COCHRAN