Finally, Some New Development in New Haven

For too many years now, there has been little to no commercial development in New Haven.  Development goes in cycles everywhere, because, when there is a downturn in the market, there is no financing (or even appetite) for new projects.  In addition, there is often leftover space from buildings that have already been constructed or converted.  New Haven, as in all Connecticut cities, also has almost no clean land on which to build. 

All these factors mean that we haven't seen much that's new--outside of residential rental--in quite some time.  Just now, there are several things in the approval, preconstruction, or construction phase.  The biggest is a new proposed mixed-use project on the old Coliseum site, which replaces the prior proposal, scuttled when the market turned down.  Route 34 has more than one medical or biotech building in the works, and there is a big office building going up on College Street.

Other firms from out of the area are looking here as well, because of our housing, entertainment, and educational opportunities, particularly for younger workers, who choose city living more often than not. New Haven is more affordable than Fairfield County, New York, or Boston, but can be easily reached by train.  More residential projects are in the planning phase also, since there is a theory that we could provide housing for commuters.  For example, 360 State Street, which filled up faster than anyone predicted, sends 85% of its residents to work by foot, bicycle, or train.  Since that's a trend of the future--easy commutability--it's not a bad bet to think it will continue.  Those who flock here for dining, nightlife, and the arts may increasingly choose to live here, especially as young professionals or empty nesters.

This is all good news for New Haven, and for the real estate industry, and it's about time.  We're ready!

Incubator Space

New Haven, with its entertainment, restaurants, college scene, and new rental properties, has become a haven for start-up companies.  Often such companies look for cheap space (compare us to NYC!), cheap labor (all those recent college graduates!), an educated workforce, a fun place to live, and access to universities and their research facilities.  New Haven scores highly on all those variables.

It makes sense that entrepreneurship would be booming now, because it's hard to get a job working for someone else, especially in Connecticut, which is last in the country for jobs recovered from the recent recession (now at 48%).  More often than you might think, a poor job market leads people to start their own businesses.  Those businesses are almost always short of cash, and therefore can't pay premium rents.  Of course, they also fail more often than established enterprises.

On the other hand, they can grow rapidly, and end up expanding into additional space.  They may also migrate from one property to another, belonging to the same developer or investor.  Also, they usually don't require the kind of fit-up that bigger companies do, and may even find unfinished space funkier.  Layouts in start-ups can be freer, with open work areas without private offices common.  So, even if a landlord is taking one kind of risk, he or she could be saving in another expense category.

Think of it the way you might think of buying penny stocks.  You might lose a little money, but the upside potential is almost unlimited!

Post Storm Sandy

I am sitting in my empty office typing in comfort, as there isn't much else to do today.  Everything has been cancelled, including a few things that I was looking forward to, but it's no big deal.  I am very fortunate to have had no damage, and good friends with whom to stay while the storm raged outside.  We were in a mandatory evacuation zone, and the dog and I obeyed.  My husband refused to leave, so he's still there--stuck by high tides and flooded roads, without power or water, but otherwise fine.  I think I'm staying put in the city until the power comes back.

I went running early both mornings, and yesterday was a normal run.  Sandy really hadn't started yet.  Today there were lots of trees down in New Haven, and branches in places over the road, but the police had been out putting up tape and clearing in some places already, and many streets were passable.  It helped that there was no traffic, and few people who had to go to work.

The shoreline is a different story, judging by the pictures and the reports from my husband.  We were fortunate, because we are up so high (supposedly, we have the highest house on Long Island Sound in Connecticut).  It is really high--you can imagine Noah's Ark in our driveway--so we weren't worried about water, as was the problem for people with Irene, but wind.  My husband didn't clock any gusts that were higher than Irene, although I heard that there were 90 mph gusts in the next town over.  We had no damage, but our road, and the roads outside our neighborhood, all flood regularly, so I won't be getting home for awhile.  89% of Guilford is still without power, so I think that's not much of a deprivation.  My friends are very kind, and we're having lovely, homecooked meals complete with plenty of wine.  Compared to so many, lucky and I'm not complaining.

Have You Driven or Parked in New Haven Recently?

If you are interested in the health of commercial real estate, then you should spend some time in downtown New Haven.  There are new stores and restaurants opening all the time, and it's hard to find a place to park almost anywhere.  In fact, the meters now take credit cards, and must be fed until 9 PM.  Gateway Community College has begun operations at its new campus, right below the Green, and has brought traffic and activity to the area already.  Yale has negotiated new leases with the Shake Shack, out of NYC, and with a national Mexican restaurant chain, both on the Green.  Last Friday evening, it was "First Friday" in the Ninth Square, with music, crowds, and exhibits for all to enjoy, and the joint was jumping.

Existing businesses will be watching with interest.  Some will follow the activity, and move into empty spaces still available.     Others will move out, citing issues of traffic and parking, and will relocate to the suburbs, or away from the central business district.  In either case, change will bring more change, and that's always good for the real estate industry!