Branford, CT The Connecticut/ Western Massachusetts chapter of SIOR announced the results of its semi-annual membership survey of commercial real estate market conditions. The survey is based on market activity for the period July through December 2015 within the region.
SIOR member responses regarding market conditions during the last six months of 2015 indicated a continuation of the positive trend established earlier in the year. Members noting improving market conditions increased to 61% with 35% experiencing no change and 4% experiencing a decline in market conditions within Connecticut and western Massachusetts. Predictions for 2016 are split between neutral or optimistic with 48% anticipating no change in market conditions and 43% expecting improvement and the reminder expecting a decline (9%).
Predictions regarding lease rates for 2016 largely indicate status quo. No decline is projected for industrial lease rates as members either expect no change (71%) or an increase (29%). Office lease rates are overwhelmingly expected to remain unchanged (84%) and only 11% expect an increase while a small number expect a further decline (5%). Expectations regarding the direction of market vacancy rates for the first half of 2016 differ somewhat by market sector. The industrial sector has the more positive outlook as vacancy rates are expected to decrease (44.5%) or remain unchanged (44.5%) with 11% expecting an increase in vacancy rates. Predictions for office vacancy rates indicate a majority does not foresee a change (53%) and the remainder anticipates an increase (31%) or a decrease (16%). This is a shift in sentiment from the prior survey. A greater number of members previously anticipated a decrease in office vacancy rates.
Predictions for sales prices for 2016 generally point to stable pricing. However, results also suggest uncertainty regarding future market direction. Survey responses for industrial properties predict stable pricing (61%) with a group anticipating upward pressure on pricing (39%) and no responses expecting a decline. Survey responses for office differ slightly as a larger majority (70%) indicate prices have stabilized and a smaller component anticipate further price declines (20%) and a small group anticipate a price increase (10%). Results for investment cap rates include the majority anticipating they will remain unchanged (59%) or expect cap rates to increase (29%) which results in declining values for investment properties and the remainder anticipating a decrease in cap rates (12%).
The members do not anticipate significant new development in 2016. Expectations regarding growth by users indicate no change (66%) and the remainder divided between expansion (30%) and contraction (4%). Comments by members indicate an improving market but note difficulties such as softness in demand and tightening inventory in some sectors. Concerns regarding the overall business environment including growth, taxes and regulations are ever present and temper expectations for the future.
A sampling of recent member transactions, starting in New Haven County, include the sale of a 23,250 s/f industrial facility on 14.4 acres at 539 Oronoque Rd. in Milford, Conn. on behalf of Arrow Realty, LLC to a New York manufacturing firm. Alan Fischer, CCIM, SIOR handled this sale valued at $2.65 million for both parties.
In New Haven, Fischer represented Highville Charter School in the acquisition of a 108,000 s/f office building on 4 acres at 1 Science Park for $5.8 million.
Stephen Press, SIOR represented the seller, 117 North Main, LLC in the sale of a 3,000 s/f automotive facility on .66 acres in Branford for $620,000.
20 Peck St. in New Haven consisting of two buildings totaling 3,830 s/f on .61 acres and formerly used as a day center were sold on behalf of Press, representing the seller, K & J Holding, LLC.
A 4,000 s/f class A office suite at Hamden Center was leased to Erland Construction for their Northeastern regional offices. Press represented the landlord in this transaction.
Steven Inglese, SIOR represented Liberty Travel (aka FC USA, Inc.) in leasing 2,664 s/f of office space at Hamden Center II, also known as 2989 Whitney Ave., while Press represented the landlord in this transaction.
170 Pond View Dr. in the Medway Business Park in Meriden consists of a 23,000 s/f industrial facility on 4.27 acres. It sold for $1.1 million to Aperture Optical Sciences, with Press representing the seller in this transaction.
Mark Duclos, SIOR represented Amazon in the long-term lease of 29 Research Parkway in Wallingford, a modern 184,875 s/f distribution center featuring 30’ clear ceiling heights.
Two floors at 3208 Whitney Ave. in Hamden were leased to three tenants; Richard A. Chernes, LLC, Boyhen Associates, LLC, and Tomanelli Counseling. Stephen Press, SIOR represented the landlord in all of these transactions.
1130 Sherman Ave. in Hamden consisting of an 8,400 s/f building on .73 acres was sold for $460,000 to Michael Carrano, with Stephen Press, SIOR representing the seller.
Frank Hird, SIOR was part of the selling team for One Long Wharf Drive in New Haven, a class A medical office building totaling 300,000 s/f, which recently sold for $72 million to Healthcare Trust America, Inc. Hird’s team will continue to represent the property as leasing agents for the new owner.
In Fairfield County, Tom Pajolek, SIOR handled several office leases; a 43,563 s/f sublease at 201 Tresser Blvd. in Stamford, a 16,574 s/f lease to Castleton Commodities at Two Harbor Point Square in Stamford, a 28,466 s/f lease to Robinson and Cole at 1055 Washington Blvd. in Stamford, and the lease of 38,131 s/f at 45 Glover Ave. in Norwalk.
Jeff Ryer, CCIM, SIOR, Joe Wrinn, SIOR, and Chris Nagorski, SIOR from Michigan represented Training Direct, a training services firm for medical professionals, in the lease of 3,500 s/f of retail space in central Danbury.
Airgas USA was represented by Joe Wrinn, SIOR and Art Ross, SIOR in the lease of 17,200 s/f of retail showroom and industrial space at 604 Federal Rd. in Brookfield.
Tom Pajolek, SIOR represented the respective landlords in office leases of 33,466 s/f to Datto at 101 Merritt 7 in Norwalk, 84,504 s/f to Frontier Communications at 401 Merritt 7 in Norwalk, and 9,288 s/f to Regus at 15 River Rd. in Wilton. Pajolek also represented Ameripath in the lease of 22,480 s/f at 889 Bridgeport Ave. in Shelton.
In the Naugatuck Valley, Alan Fischer, SIOR handled the sale of a two story industrial facility in Derby totaling 150,000 s/f from Derby Cellular Products to an Ohio based investment group.
Art Ross, SIOR and Mark Duclos, SIOR represented the landlord of 64 Ave. of Industry in Waterbury, in a long term lease of 54,230 s/f to Great American Aquaculture.
Also in Waterbury, Ed Godin, SIOR handled the sale of a former manufacturing facility totaling 85,000 s/f on 3.7 acres at 182 East Aurora St. for $310,000.
South of Hartford, Michael Guidicelli, SIOR completed the sale of 99 Citizens Dr. in Glastonbury for $875,000 representing the seller of this 11,000 s/f investment property, Investment Realty of Glastonbury, LLC.
Phil Gagnon, SIOR represented the seller Worthington Properties, and Bob Pagani, SIOR represented the purchaser Sunset Hill Restoration in the acquisition of two Rocky Hill properties; 748-750 Old Main St., a 25,200 s/f office building and 100 & 200 Laura Lane, a 41-unit apartment complex.
Futurity First Insurance Group, represented by Larry Levere, SIOR leased 3,283 s/f of office space at 101 Centerpoint Dr. in Middletown. Michael Guidicelli, SIOR represented the landlord Centerpoint Management in this lease.
1030 -1040 Elm St. in Rocky Hill, a 56,936 s/f retail center was sold as an investment transaction for $14.615 million. Mark Duclos, SIOR and Steven Inglese, SIOR represented the seller DeMeo Family, and procured the purchaser Woodgreen Management in this transaction.
A long-term lease for 15,000 s/f was signed by a national medical tenant at 1 Herald Square in New Britain for doctor’s offices and medical space. Michael Guidicelli, SIOR represented the landlord, Opportunity Real Estate Equities, in a development that previously housed The New Britain Herald.
A 7,958 s/f office lease extension was completed by Horizon Technology Finance at 312 Farmington Ave. in Hartford, represented by Larry Levere, SIOR.
Industrial transactions in the immediate Hartford area include the sale of 33 Leggett St. in East Hartford, 43,983 s/f on 2.04 acres to Goodwin College for $750,000. Art Ross, SIOR and Mark Duclos, SIOR represented the seller New Boston Fund.
701 Marshall Phelps Rd. in Windsor, a modern 51,768 s/f facility on 7.78 acres was sold to Baronet Coffee for $1.8 million. Keith Kumnick, SIOR represented the seller Phelps Road LLC, and Art Ross, SIOR represented the purchaser in this transaction.
Nick Morizio, SIOR represented the landlord in the long term 100,000 s/f lease to Namco at 35 Manning Rd. in Enfield, for its warehouse/distribution operations.
In western Massachusetts, John Reed, SIOR handled the sale of the former Avery Dennison facility in Chicopee, a modern 291,714 s/f industrial building on 35.75 acres to Equity Industrial Partners for $6.28 million.
Mark Duclos, SIOR and Art Ross, SIOR represented the landlord in a lease of 86,031 s/f at 101 Almgren Dr. in Agawam, MA to OMG, Inc.
Outside the Connecticut/western Massachusetts region, Art Ross, SIOR and Mike Manzari, SIOR from Corning, N.Y. represented the landlord in a lease extension and expansion with Tall Timbers Distribution for 495,443 s/f at 200 Westinghouse Circle in Horseheads, N.Y. Following this additional lease commitment, the property totaling 860,000 s/f on 59.12 acres was sold to Northstar Partners for $18.44 million. Art Ross, SIOR and Mike Manzari, SIOR represented the seller Silagi Development and Management in this transaction.