Sunday, March 12, 2017

New Haven is a Great Place to Retire

I was scrolling, or trolling, on Facebook today, and I noticed a post about New Haven being third on a list of places that are attracting retirees.  New Orleans was first, but we don't have its weather!  However, when you factor in healthcare, culture, free events, and walkability, New Haven stacks up very well.  We have been selling houses in the suburbs to couples who downsize into apartments downtown.  We have also relocated people from out of the area, many with connections to Yale, who come here for their golden years.

What does this mean for commercial real estate?  Providing services in the center city has become more important than ever, not only for retirees who want to be (mostly) car-free, but for busy millennials, as well as for professionals who may live here during the week, or people who just work in the city.  Food places that deliver seem to be more and more popular, as well as places that offer dining options like takeout and/or prepared foods.  There also seems to be no end to the number of restaurants that are prospering in every corner of downtown, and in every ethnic possibility. 

We already knew that many entrepreneurs want to open businesses in the hub of the region, but we expect that trend both to continue and to accelerate.  We know that convenience is important, and that people will pay for it.  We know that time is at a premium, and that walking or biking have become top of mind reasons to live and work in certain communities.  If you have space that could work for someone to open a business, either stand alone or as part of another enterprise (think of the fast-food chains that team up together in urban and suburban locations), give us a call.  And, if you want to become part of the great wave of small business owners, here's your chance.  We're ready to help.

Monday, February 20, 2017

Follow the Out-of-Town Investors

If you drive around New Haven these days, you will see building after building that is being renovated, remediated, or repurposed.  Many of them have been bought by investors that can no longer afford the prices commanded by properties in New York City or Boston.  Once someone makes his or her first purchase, there is a good chance that he/she will continue to buy other offerings, especially given the prices on some of the older industrial buildings.  In addition to the lower acquisition costs, it's also cheaper to renovate here than in a bigger city. 

Some of these purchases are being driven by the desire to diversify investments, while some are opportunistic, and others are for specific purposes. The rash of new rental options will inevitably lead to other retail and commercial needs in those neighborhoods.  There will be money made, as early adopters get ahead of the curve. Organizations and companies that are renting should consider now the possibility of buying, before prices rise further, even though current rental rates may seem like (and often are) a bargain.

What does this mean for those of us who live here?  Will we continue to watch as others grab what's on the market?  Or will we make the classic mistake of sitting on the sidelines until it becomes so clear that outsiders are making money, that we buy at the end of the cycle, or buy something that is more problematic or risky?  Only time will tell, but it's our job to point this trend out, and the job of readers to think about their own portfolios.

Friday, January 27, 2017

CERC survey: View of CT realty upbeat

Written by Gregory Seay

Connecticut landlords and other realty professionals feel better about the near term prospects for the residential-property market than they do the commercial-space sector, a new survey shows.

According to the Connecticut Economic Resource Center (CERC), its latest SiteFinder semi-annual online survey of Connecticut commercial real estate conditions indicates that respondents are generally positive about markets, except for the office market and overall economy.

The 72 respondents included brokers (65 percent) and economic development professionals (22 percent) from Connecticut and out-of-state. Almost one-third of respondents (32 percent) were from New Haven County.

Respondents generally rated local market conditions as satisfactory, with a majority saying the industrial, investment, and residential markets in their respective geographic areas were "excellent" or "good" (53 percent, 50 percent, and 62 percent, respectively).

Respondents were more pessimistic about their local office markets, with one-quarter rating it as "poor" and 56 percent rating it as "fair."

At the state level, residential was the only market for which a majority (51 percent) said it was "excellent" or "good." One-quarter (25 percent) said the office market was "poor," and one-third (30 percent) said the overall economy was "poor."

Respondents are also seeing tangible improvement in the real estate markets in the state. Over half of respondents (57 percent) reported seeing an increase in buyer interest or inquiries compared to this time last year.

Nearly half (48 percent) also reported an increase in the number of deals. There was an increase of those reporting increased number of deals (from 38 percent) and buyer interest or inquiries (from 48 percent) from the first quarter of 2016.

"As the need for large office space continues to decline, the demand for modern industrial manufacturing and distribution space continues to increase,'' said CERC Real Estate Program Manager Erron Smith. "End-users have communicated that they are willing to pay a little more, if it translates into occupying a space that can satisfy their operational needs."

More than half of respondents thought sale prices for industrial, retail, investment, and residential properties would increase in the state in the next three months (63 percent, 51 percent, 61 percent, and 57 percent, respectively). Most expected this gain to be less than 5 percent, but more than 10 percent of respondents thought there would be a gain of at least 5 percent in sale prices for residential.

"There was a similar pattern for lease prices, with expected gains in sale prices for industrial, retail, investment and residential, and a loss for office," said Alissa DeJonge, CERC's research vice president.

Nonprofit CERC is a public-private partnership that provides economic development services. Its SiteFinder Real Estate Survey measures the health of Connecticut's commercial real estate market.

Thursday, January 26, 2017

Multifamily Still Strong

Despite talk in the NY area that prices for residential property are overheated, and although Connecticut is considered to be one of the places where buying makes more sense than renting, both have more multifamily properties in the LoopNet weekly report of the most viewed properties.  In the NYC region, 7 out of 10 of the listings mentioned were multifamily, and 8 of the 10 in CT were in the same category.

What this suggests is that it may be less about demand for the end product, and more about demand for investment properties for mostly smaller investors, at least in Connecticut.  By that, I mean that REITs may be looking at other things, but that much of what would be considered "affordable" purchases for individuals are now falling into the multifamily basket.  It could also mean that sellers are beginning to put those investments up for sale, either to reap the profits to reinvest, or to lock in gains before there is an oversupply.  Or that the stock market is getting the proceeds from any sales.

Under any scenario, it's clear that the action lately is strongest in the investment realm.  Since LoopNet is telling us that buyers are looking largely at those types of listings, it makes it a good time to list. 

Wednesday, January 18, 2017

Change in town grand list values over time

Many towns experienced an increase in their grand list between 2013 and 2014 but the vast majority are still below where they were in 2008, according to an analysis of recently released data from the Office of Policy and Management.

Only 15 towns, including Stamford and Bridgeport, have rebounded from the Great Recession and seen an increase in the aggregate valuation of taxable properties.

Click here for interactive map.

The most recent grand list data for municipalities is from 2014, but more recent data from a different study, which looks only at home values, shows that a downward trend in that category might be continuing statewide.

Home values in all other states increased between 1 and 10 percent from 2015 to 2016, but Connecticut’s decreased by half a percent, according to a recently released report from CoreLogic.

Connecticut was the only state in the country to show a valuation decline from 2015 to 2016.  Connecticut also was one of five states in the study furthest from peak home values – 20.1 percent below.

Article from Trend CT