This is the first of a two-part series on the Hartford-Springfield market. Today, multifamily and other investment properties in the Hartford, CT, market are trading more actively for the first time since the end of the recession. Part of this uptick is attributable to the higher returns that investors are seeing in secondary and tertiary markets. In fact, capitalization rates for multifamily properties in Hartford are typically 250 to 300 basis points above those for similar properties in other Connecticut cities, and up to 500 basis points above Boston and New York multifamily. While the cash returns for Hartford investors are higher than most, there is also renewed economic activity that should result in greater demand and rent growth for Hartford multifamily and commercial assets.
Of the various development projects currently planned or underway in Hartford, the key driver is the proposed 6,000-seat minor league baseball stadium in the Downtown North area. Three groups are currently vying to develop this area into a retail-residential-commercial hub with proposals that run as high as $350 million.
The neighborhoods of Clay Arsenal and Upper Albany have been separated from the central business district, but the redevelopment of Downtown North promise to utilize these parcels of property to their full potential and extend and enliven downtown Hartford. The ballpark will mean more jobs during and after construction, an increase in tax revenue, more affordable activities for families and more customers for local businesses. It also can drive the development of more services and housing.
The number of apartments already under construction and the new downtown University of Connecticut campus will also change the face of the city. Currently, 1,500 apartment units are being constructed in downtown Hartford. This will contribute to more people being able to live downtown – particularly young people – and with more companies having employees that live in the city, walk to work and stay downtown after work and on weekends. This will spur the development of new businesses that cater to these new residents, further strengthening the job market and tax base.
Hartford’s new 500-seat Infinity Music Hall and Bistro is an example of this synergy. It just recently opened with Gov. Dannel Malloy and other local leaders on hand and is already planning to host 250 music and comedy shows a year. It also offers a four-star restaurant and bar. The Hartford location is an extension of the Infinity Music Hall and Bistro in Norfolk, CT, which has been in business since 2007.
Hartford Mayor Pedro E. Segarra was recently quoted in HartfordBusiness.com that in the next 10 years Hartford won’t be New York City or Boston, but it doesn’t need it to be. “We will be Hartford,” he said, “a great small city that is diverse, that attracts innovators and people with ambition of every age.”
With offices in Connecticut, New York, Massachusetts and Rhode Island, our investment sales teams are well positioned to support commercial real estate investors looking at opportunities in Hartford and across the region. If you’re a property owner or an investor in the mid-market segment and want to discuss this blog or your investment goals and how we can help you achieve them, please give us a call.