Hartford Business Journal

19 HARTFORDBUSINESS.COM | MAY 31, 2021 FOCUS: REAL ESTATE What Can We Do For You? 860.871.1111 www.nemsi.com 55 Gerber Road East, South Windsor, CT 06074 For over 50 years, clients have counted on NEMSI for: HVAC, Plumbing and Process Piping | Electrical Services Energy Management Systems | LEED Certification Programs Design-Build Construction | 24/7/365 Emergency Response Comprehensive Preventive Maintenance Programs NEMS's Recent Awards Include: » ABC Platinum Safety Award » ABC Accredited Quality Contractor (ABC-AQC) » ABC Excellence in Construction Award » ABC Specialty Contractor of the Year » Contracting Business First Place Design/Build Award License #s: E1-0125666 • S1-302974 • P1-203519 F1-10498 • SM1-192 • MC-1134 Offices in: New London | Trumbull | Pawtucket, RI Palmer, MA | Manchester, NH | Albany, NY So You Can Focus On Your Business We focus on your facilities ES_NEMSI HBJ Hlf pg_201221.indd 1 ES_NEMSI HBJ Hlf pg_201221.indd 1 12/21/20 5:05 PM 12/21/20 5:05 PM construction activity in recent years, developers are simply playing catch-up from a lengthy period in which building multifamily properties fell out of favor, according to Donald Poland, managing director of urban planning at East Hartford-based Goman+York. Poland, who has advised area planning boards and developers alike for nearly 20 years, said multifamily development activity plummeted after the 1990-1991 recession, as some blamed a recent condo boom at the time for economic woes. From then until after the Great Recession of 2007-2009, development activity was slow. For example, from 2004 to 2011, multifamily units represented just one-quarter of total building permits issued in Connecticut, according to U.S. Census data. However, apartment development turned the corner after that, with activity nearly doubling. Between 2012 and 2020, permits for multifamily units have averaged 47% of total permits issued in Connecticut. "The fact that there was an aversion to multifamily for 20 years means the majority of the existing stock is pre-1990," Poland said. So those older developments face competition from newer rental communities with open floor plans and more modern amenities. "The older, tired product starts becoming functionally obsolete and is falling out of the marketplace," Poland said. Amenities are a major focus for any new market rate apartments, developers say. For example, Salvatore said his new Hartford apartments will have a pool, modern exercise and yoga facility with interactive equipment including a golf and multi-sports simulator, bowling alley, and rooftop deck that will overlook Dunkin' Donuts Park with bleacher seating. It will also have coworking space for remote-working residents. Salvatore said he's targeting Millennials and empty nesters as residents. "For younger demographics it's all about quality of life," he said. "They will pay for that quality of life." The newer apartment offerings are putting pressure on the owners of middle-aged and older properties to try to keep pace with renovations, said CRDA's Freimuth. "There's been a new birth of product out there that is of a higher grade and that's forcing those buildings that have grown tired to pick it up a notch, and it's also causing a migration to a better product," Freimuth said. He believes some of the demand for new apartments in Hartford will come from suburban residents who didn't like what housing choices were previously available in the city. "The urban apartment downtown space just didn't see the product, so people were moving out into the suburbs, a garden apartment off the highway someplace," he said. There are other factors driving demand, including formation of new households by young adults fresh out of college with their first job as well as some modest population growth. Rental demand is also coming from Baby Boomer empty nesters. Some renters choose to rent, but many don't have enough savings to purchase a house, even if they want one. Homeownership has been declining in recent years in Connecticut, and booming demand and low inventory during the pandemic have only placed ownership further out of reach. Given those various factors, Poland sees the pipeline of multifamily projects remaining pretty steady for a while. "My feeling going forward is that Avner Krohn I think we're going to see probably at least five to 10 years of moderate demand or production of multifamily units," he said. New apartment stock in Greater Hartford Despite the COVID-19 pandemic, 2020 still saw a healthy number of new apartments delivered to the market. Year Net Deliveries 2006 310 2007 551 2008 399 2009 16 2010 2 2011 -159 2012 18 2013 232 2014 448 2015 1,159 2016 1,111 2017 1,446 2018 543 2019 1,298 2020 1,094 Source: Costar

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