Hartford Business Journal

8 Hartford Business Journal • November 12, 2018 • www.HartfordBusiness.com FOCUS: Retail By Sean Teehan steehan@hartfordbusiness.com T he times, they are a-shiftin' — in central Con- necticut's retail real estate scene, at least. A new study shows Greater Hartford's retail vacancy rate fell 4.5 percent over the past year to 10.6 percent. It's a surprising number given recent news of major retail chains like Toys R Us, Babies R Us, Sears and Lowe's clos- ing stores, and other brick-and-mortar retailers reportedly struggling to keep pace with online competitors. But traditional brick-and-mortar retail isn't dead yet. In fact, department and sporting-goods stores added the most space over the past year and sev- eral major retailers — Burlington, Saks Off Fifth, Cost Plus World Market and At Home — have opened new storefronts. However, shifting dynamics are impacting the market, including an increasing number of developers con- verting retail properties into mixed- use and residential space, and medical and health-focused businesses moving into storefronts traditionally occupied by retailers. And, of course, internet sales' increasing role will continue to put pressure on the industry. "It was a relatively good year com- pared to recent history for Greater Hart- ford," said Robert F. Sheehan, research vice president of Massachusetts-based KeyPoint Partners Inc., which authored the study. "Developers held the line on new construction while a significant number of vacancies were replaced by growth-oriented retailers or by non- retail conversions. This was enough to lower the vacancy rate in the region, despite contending with the Toys R Us liquidation and a Sam's Club closing." The amount of unoccupied retail space in Greater Hartford shrunk by 211,000 square feet over the past year, the report found. Total retail space in the 26 towns and cities surveyed contracted by almost 50,000 square feet. That's a nominal decrease, but it's mostly attributable to retail spaces being converted to non-retail uses. One example is the former Showcase Cinema in East Wind- sor — more than 59,000 square feet of space — being razed in anticipation of a proposed casino there. Meantime, the 10.6 percent vacancy rate is considered a significant drop from 2017's 11.1 percent vacancy rate, Sheehan said. Happy holidays Michael Gallon, managing broker at Newington-based Reno Properties Group LLC, is a firm believer that traditional brick-and-mortar retail still has a future, even if it's not as robust as it once was. In fact, he's bullish about the upcom- ing holiday shopping season — retail's make or break period — and thinks many stores will enjoy healthy rev- enues as 2018 comes to a close. Consumer confidence heading into Black Friday remains high, and shoppers are expected to spend 4.1 percent more on average this year compared to last, according to the National Retail Federa- tion and Prosper Insights & Analytics. "At the end of the day, my gut feeling is that brick-and-mortar retail is going Mixed Bag Amid brick-and-mortar shakeup, Greater Hartford's retail vacancy rate shrinks Greater Hartford retail realty sector 2018 2017 % change Market size (square feet) 37,556,000 37,603,200 -0.1% Retail properties 3,300 3,500 -5.7% Retail establishments 8,200 8,100 1.2% Vacant square footage 3,965,200 4,177,100 -5.1% Vacancy rate 10.6% 11.1% -4.5% Source: KeyPoint Partners Greater Hartford municipalities with highest retail vacancy rates Enfield 20.6% East Windsor 19.4% East Hartford 17.2% South Windsor 14.4% Hartford 13% Source: KeyPoint Partners Greater Hartford municipalities with lowest retail vacancy rates Glastonbury 4.2% Newington 5.4% Rocky Hill 5.4% Bloomfield 6% Plainville 6.3% Source: KeyPoint Partners HBJ PHOTO | SHARON BORDONARO Greater Hartford retail has had a mixed year. Newcomers like Saks Off Fifth, buybuy Baby and Cost Plus World Market filled new retail space in West Hartford, while Sears and Toys R Us closed several locations around the state. Meantime, healthcare facilities, like GoHealth Urgent Care (shown right) have filled traditional empty retail locations. PHOTOS | CONTRIBUTED

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