Will Jobs Follow Apartments?

New Haven and its surrounding area have seen a great deal of apartment activity over the past few years.  While housing prices have remained steady, or even declined, rents have risen by 50% or more in the central city.  The administration is banking on the continued desire of young professionals and empty nesters to live in the city, wherever they may work.

The most recent announcement, of a new apartment high rise, behind the new apartment high rise that used to be the Union Trust building, is a good example.  That site was talked about for years, as the potential spot for a new parking garage, but the selling out of the Union Trust units has led to a plan for more units directly behind it.

Once all of these luxury buildings have gone up, and professionals are living here, why wouldn't they want to work here as well?  And didn't General Electric say, on its way out of Connecticut for Boston, that its biggest concern was the recruiting and retention of talent.  Aetna made much the same argument, as it prepares to pull up stakes in Hartford and relocate to New York City.

It stands to reason that university and other startups, professional firms, and other businesses that depend upon finding educated workers would look in New Haven, if there already exists a population of people living here and working in similar jobs remotely or elsewhere.  So, doesn't it also make sense that we will see a wave of employers opening branches or firms in our city, to take advantage of what people here call the GSCIA (Greatest Small City in America)?  Let's hope so.

New Haven Outperforming Other Connecticut Cities

Fairfield County, with its big corporations, is still reeling from the actual, but even more the psychological, effects of GE's move to Boston.  GE is still leaving a lot of employees in Fairfield, but both the home and office market reflect the strain.  Hartford, on the other hand, is losing Aetna after a century and a half, and other big insurance companies have moved, downsized, or merged as well.  In addition, the city itself is teetering on the brink of bankruptcy, which doesn't improve its chances to pick up new office users.

That leaves New Haven, with its startups, biotech related to Yale, and medical complex, to pick up the slack.  New Haven also has an easier time of recruiting young professionals, since there is a vibrant nightlife scene, and many residential choices, from close-in city neighborhoods to high-rise condos and apartments.  New Haven officials and developers are banking that this will continue, and the future is looking bright for that trajectory. 

Now, if only Connecticut could solve its fiscal problems, we'd be all set.  Come on, legislators, help us out here!

Activity at Lower Price Points

One of our jobs as commercial real estate professionals is to educate clients about the state of the market.  That's a particularly difficult task just now, because the national news often diverges with what's happening in our own state.  In fact, Connecticut recently has been all alone in seeing prices fall.  Although we don't like to admit it, we are experiencing that in many instances. 

Everyone knows by now about Connecticut's fiscal problems, and is aware that GE, and most likely Aetna, are moving their headquarters elsewhere.  What that means for the rest of us is that prices are much less apt to rise here than in other places, where the economies are healthier.  In fact, we not infrequently have to tell sellers and landlords that prices are going down, not up.

Tenants and buyers are finding lots of bargains around our area these days.  It does depend upon the type of real estate, with investment and multi-family trending as the strongest sectors.  However, our continuing depletion of industrial users has made those properties decline or stay steady in value over the past number of years (some for as many as 25 or 30 years).  Unless we can get owners to understand these cold facts, they are prone to thinking that what's true in Boston and NYC is true here, and that's just not the case.

What's the silver lining?  As I've been saying, we have plenty of bargains available. We also should be able to attract investors, and maybe even some users, from higher-cost regions.  As long as sellers don't get greedy, there are deals to be made, and we are looking to help make them.