IRR-Hartford Mid-Year Viewpoint 2015 Local Market Report - Office
We expect to see modest absorption of office space in the downtown Hartford market over the next year after years of negative absorption. Rent should remain stable at between $21-$24 per square foot, quoted on a gross basis. Large space users, requiring over 100,000 square feet, have few options to choose from as there are few large, contiguous blocks of space available however, there are numerous options for those users needing space in the 5,000-25,000 square foot range. Market conditions should begin to stabilize in the near term allowing landlords an improved bargaining position.
The suburban markets are faring slightly better with modest absorption expected over the next twelve months. The bright spot is medical office absorption with several new developments showing relatively rapid lease-up as the health care market continues to grow in support of an aging baby boomer population.
The north submarket remains the weakest with a reported 30.5% vacancy rate and average rents of $16 per square foot. The south submarket is in the best shape with a vacancy rate of 14.2% due to continued growth in bioscience development moving up from the South. The conventional office market has not yet reached a point where new construction is economically feasible as rents remain below levels that would allow new construction. We expect the market to continue to slowly improve resulting in continued absorption of existing Class A space and renovation of Class B space. Rents will move slowly upward as space is absorbed and eventually new construction will enter the market.
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IRR Mid-Year Viewpoint 2015 comprises a National Overview report and 300+ two-page Local Market Reports for all key property types as well as additional resources, including metrics methodology, graphs, and tables; these free reports may be downloaded from IRR’s site here.