Hartford, Conn. and Springfield, Mass. are both markets offering upside for value-added investors. With the expansion of transportation along the Hartford-Springfield corridor and job creation from the new MGM Springfield, this is an opportune time to consider acquiring a Class-B or Class-C property to reposition as part of your investment real estate portfolio. Here are some of the trends currently shaping the Hartford-Springfield market.
Adaptive reuse remains viable
The Capitol Center office building near Bushnell Park, which has been vacant for nearly 20 years, is slated to become a 60-unit apartment complex. This building joins a long-line of formerly empty office buildings in Downtown Hartford which have found new life as apartments. Eyes are now on Allyn Street as the next area poised for redevelopment, as what was once dubbed the “downtown dance and bar district” fades away, according to the Capital Region Development Authority and Hartford Courant.
Similarly, in nearby Springfield, a once vacant mill in Ludlow is now home to a 75-unit apartment complex for ages 50 and over.
“As formerly vacant buildings find new life as residential and mixed-use assets, downtown communities become more vibrant and, in turn, are able to lure more tenants to the urban core,” according to Taylor Perun, senior associate at Northeast Private Client Group. “A number of properties viable for adaptive reuse remain available in both the Hartford and Springfield markets, offering investors the opportunity to buy at or below market value and create the conditions to maximize returns.”
Proximity to transportation remains important
The CTfastrak bus line has brought a new means of transportation to Greater Hartford. Following creation of the bus line, developers are now seizing opportunities to establish multifamily housing near CTfastrak stations. The latest illustration of this trend is the recent groundbreaking of Columbus Commons in New Britain which is slated to house 160 apartment units with ground floor retail or office space.
Similarly, developers recently broke ground at Willow Creek, a mixed-income rental community in Hartford’s Blue Hills neighborhood, which offers easy access to mass transit.
Of note, regional transportation in the Hartford-Springfield market stands to get even stronger with the launch of the Hartford Line, the commuter rail service which will connect Hartford to New Haven and Springfield come late spring 2018.
Job creation drives demand for workforce level housing
With MGM Springfield under construction and Governor Malloy authorizing an East Windsor casino for Conn. this past July, new job creation stands to keep fueling the multifamily housing market. In Springfield, the City and MGM have reached an agreement to build market-rate apartments at two locations, according to 22News. Beyond the new casino, Massachusetts is experiencing additional job growth. In September 2017 alone, Massachusetts added 9,300 new jobs, according to the state executive office of Labor and Workforce Development and the federal Bureau of Labor Statistics.
On the market
Among Northeast PCG’s current Hartford listings are two value-added multifamily opportunities:
- a 42-unit multifamily portfolio on Congress Street valued at $1.69 million with a cap rate of 8.0-percent on net operating income, and
- the 58-unit Ritz Grande Apartments, at an asking price of $4.25 million with a 7.5-percent cap rate.