Hartford Business Journal

8 Hartford Business Journal • December 10, 2018 • www.HartfordBusiness.com By Gregory Seay gseay@hartfordbusiness.com N ew York office landlord Adam Stark is used to his metropolitan-area buildings being at or near tenant capacity. But the downtown Hartford skyscraper he bought a year ago for $4.5 million and spent more than $1 million to refurbish is well off its full-occupancy mark. Still, Stark is confident that his 17-sto- ry, century-old skyscraper at 750 Main St., now The Stark Building, will meet his lease-up expectations in a city some see as having momentum at its back. Roughly 70 percent of his building's 102 office suites are occupied, he said. "What we're trying to do is get the right tenants to the building,'' Stark said, " … folks looking for a long-term home.'' Stark's optimism about his newly ac- quired building and downtown Hartford in general mirrors sentiments shared by other center- city landlords and brokers who see Hartford as an increasingly attractive location for employers. In fact, the central business district is getting the most ten- ant attention in Greater Hartford, brokers say, as the trend of companies relocating from the suburbs to downtown is still active. Even so, there is a sizable footprint of empty space downtown as the city, region and state contend with a slow- growing economy and tenants' overall desire to occupy less office space. Downtown's current vacancy rate for all office buildings is estimated at 15.5 percent, according to commercial realty adviser Cushman & Wakefield vs. an 18 percent vacancy level in the third quarter — the same as it was at the end of 2017. Vacancies for down- town's best office, or Class A space is estimated to be 13.7 percent. At the end of 2017, CBRE/New England pegged downtown Hartford's office vacancy rate at 18.7 percent. Moreover, downtown Hartford's rents are now at $20.91 a square foot — about 10.5 cents a square foot lower than the third-quarter of 2017, Cush- man's data shows. "Rents are flat at best,'' said Christo- pher Ostop, managing director of re- alty investment adviser-broker Jones Lang LaSalle LLC in Hartford. One of the key issues blunting the center-city's leaseup is tenants' pro- pensity to pack more workers into less office space, brokers say. Also, the rise of co-working and other shared office spaces as well as the option to telecommute is prompt- ing some downtown tenants to shed space almost as fast as newcomers can absorb it, brokers say. Privately, some area office-lease brokers lament the rise in tenant con- cessions, such as discounted rents and greater allow- ances for space improvements and upgrades. In addition, they say the high cost of parking — ac- counting for as much as $7 a square foot of the office rent — remains a barrier for many pro- spective tenants. Downtown attraction A downtown Hartford office lease, said senior broker Jon Putnam, an execu- tive director at Cushman & Wakefield in Hartford, "has become more attractive to companies than it used to be.'' A major reason, Putnam said, is employers are eager to tap downtown's workday, night- life and cultural amenities to attract and retain young Millennials, especially as Center-city Attraction Optimism helps fill more downtown Hartford office space, but economy, other factors still leave vacancies Jon Putnam, Hartford Executive Director/Broker, Cushman & Wakefield Christopher Ostop, Hartford Managing Director/Broker, Jones Lang LaSalle LLC (Top) New York landlord Adam Stark shows off the aquarium he added to his recently acquired and renovated 750 Main St. office tower in downtown Hartford. (Below) Accounting and consulting firm PwC recently renewed its lease at CityPlace I in Hartford and renovated its space to be more modern and collaborative. HBJ PHOTO | GREGORY SEAY PHOTOS | CONTRIBUTED

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