Still More Apartments

Every time we turn around, someone else is announcing a new project with rental units.  Some are in Hartford, some in the suburbs all over, but New Haven is garnering (still) the biggest share.  There seems to be no end to the demand, or at least, we haven't seen it yet.  We all know that it will come, but who can say when the demand will dry up?

There are a few signs of increasing competition for tenants, which would indicate that the peak has passed.  However, we all know that the height of demand is usually demarcated in the rear view mirror.  Real estate is always cyclical.

This begs the question, however, of the other needs that all those tenants will have.  They tend to have high utilization of restaurants, entertainment, and convenience services.  The profile of a renter is different from that of an owner, if only because they aren't spending time or money on home maintenance or improvement.  That leaves them more time to work or play; if it's work, that leaves them also with more money, and a need for time-saving services.  Food places that deliver, pet and beauty options, and retail choices within walking distance will all increase. People who walk places can also drink in bars, since they are walking or Ubering home. Although they have been opening up regularly, the demand may be outpacing the supply, given all those new renters.

Why not try to be ready with commercial offerings. that will be ready when the units come on line?

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 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.

Investment Fever

The recent travails of the stock market have proven to be a boon for investment real estate.  The appeal of being able to see what you own, and touch it, is proving irresistible to investors from here and abroad.  We are seeing feeding frenzies for apartments, where buyers are making offers sight unseen, and office buildings, where we are surprised at the final sales prices.

Investors are being priced out of NYC and Boston, and are turning to us to look for available product.  We are happy to oblige, and are getting used to learning the nuances of moving money from country to country.  It's nice to know that the United States is still the place where people feel that their money is well spent.

If you are a buyer, you have new competition from overseas.  If you are a seller, you have new buyers.  This may be the time to cash out, and it may not matter whether you own apartments, retail, industrial, or commercial real estate.

Where Housing Grows, Retail Follows

I blogged last time about the low vacancy rate for apartments in New Haven, and I'd like to expand on why that matters to the commercial market.  When people move into an area, they want the services they use to be convenient.  So, once residential appears, developers, franchisors, and service providers follow.  Companies use demographic information to determine where they should expand.  They know that renters eat out, go to bars, and seek out entertainment, preferably without getting into a car.  After all, that's why they rented in a center city to begin with. Recently, 360 State Street opened in the Ninth Square in New Haven and is already up to 80% occupancy.  I noticed that a new Irish pub just opened on the corner of the open space behind 360 State.  Would we need another Irish pub (there are six between that one and the center of Hamden) if not for all those renters?  This is especially true with renters, who may have more disposable income than new buyers. Also, the vast majority of the 360 State renters bike, walk, or take the train to work, making close by services more enticing. Since 360 State Street is so far ahead of projected occupancy rates, it has already had an impact on the area around it, and that will continue.  Soon we will see the food co-op opening, and I expect that dry cleaners, convenience stores, and pharmacies to follow.  Already, the chain deli around the corner is one of the best-performing franchisees anywhere.  Why?  Location, location, location.

Downtown New Haven has retail opportunities that should excite both investors and business owners.  And that means that the time to act is now.