NewHavenBIZ

n e w h a v e n b i z . c o m | J a n u a r y 2 0 2 1 | n e w h a v e n B I Z 13 is about 30,000 square feet — less than 10 percent of the 433,000 square feet of total rentable space, well below the central business district Class A average vacancy. "We haven't had anybody close their doors or downsize," O'Neil says. And there were some deals to be done. Carter Winstanley added to his growing empire of life-sciences properties with his $21 million ($70 per square foot) acquisition of the Temple Medical Center, a two-building, 300,000-square- foot complex in close proximity to the Massachusetts developer's other office and lab buildings on George and College streets. Outside of the central business district, a group of three Class B office buildings, totaling some 150,000 square feet, at 540-580 Ella Grasso Blvd., was sold to local investors Mendel Paris and Sim Levenhartz for $6.85 million, or $45 per square foot. But aside from a couple of opportunistic deals, most activity in the office market ground to a standstill. Frank Hird, vice president of OR&L Commercial, says diminishing demand for office space in the Elm City isn't linked solely to COVID. "ere's a long-term New Haven trend of office buildings being converted to residential use, largely because they weren't profitable [for office use]," he explains. "is has been a trend that started 10 years ago. e need for office space is diminishing, and the need for residential space and other uses [e.g., bioscience applications] is increasing." New Year, new normal? What will 2021 look like for the office market? No one really knows, of course. e brightest sign of hope locally and nationally is the continued roll out of COVID-19 vaccines. But the fix won't be instantaneous, most experts say. "I believe the first half of 2021 will look a lot like 2020," says Stephen Press. "Landlords will need to continue to work with their tenants as they reevaluate their space needs and determine COMMERCIAL REAL ESTATE Many offices are now spacing out desks further apart amid heightened concerns about maintaining social distance. CENTRAL BUSINESS DISTRICT Class A 1,815,265 146,381 8.1 Class B 1,224,081 92,975 7.6 Total 3,039,346 239,356 7.9 NON CENTRAL BUSINESS DISTRICT Class A 687,052 346,858 50.5 Class B 1,907,110 371,956 19.5 Total 2,594,162 718,814 27.7 SOURCE: COLLIERS INTERNATIONAL New Haven region office market Total available sq. ft. Inventory (sq. ft.) (including sublet space) Vacancy % Total available sq. ft. Inventory (sq. ft.) (including sublet space) Vacancy % Sean O'Neil A boardroom inside the office tower at 195 Church St. in New Haven. Garrett Sheehan the office market is unlikely to return to pre-COVID levels before 2025. Nevertheless, the study concludes, "The coronavirus remote work experiment will become a permanent trend, but at some point, employees will return to the office in numbers that match the past." n biotech uses, Hird adds. "The way Yale cranks out these biotechs you've never heard of — and then all of a sudden they get a $250 million investment. It's a really good thing for New Haven." A forecast released in late September by Cushman & Wakefield predicts that which employees may work remotely permanently." Will office occupancy ever return to pre-COVID levels? No one knows. "My best guess is that this will not permanently change the demand for office space in the future," said Garrett Sheehan, president of the Greater New Haven Chamber of Commerce, which itself rents office space in its 900 Chapel St. headquarters. "e way people work has definitely been changed, and I expect employers will be more flexible going forward as to whether someone works from home or at the office on any given day. "But there is still a very compelling argument for having an office," Sheehan adds. "In many ways it's easier to coordinate efforts, collaborate on ideas, and build a team when your employees are centrally located." "Regular office space [use] will continue to diminish — regardless of COVID," says OR&L's Hird. But New Haven's ace in the hole, as always, remains the presence of the city's two largest employers — the Yale New Haven Health system and Yale University — and unlike, say, General Electric in Fairfield, they're not going anywhere. The future belongs to bioscience and Leasing activity has slowed considerably at downtown New Haven's largest Class A building, the 467,500-square-foot Connecticut Financial Center at 157 Church St. PHOTO | COSTAR PHOTO | COSTAR PHOTO | COSTAR

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