Hartford Business Journal

HARTFORDBUSINESS.COM | JUNE 16, 2025 5 Deal Watch Toby Nelson, vice president of leasing for New Jersey-based real estate company the Silverman Group, stands in front of a speculative 250,240-square- foot logistics building in Windsor Locks, at 30 Hamilton Road, that will be ready for occupancy in September. The building is still in search of a tenant. A rendering of a 140,000-square-foot logistics building planned in Manchester, at 71 Commerce Road. HBJ PHOTO | MICHAEL PUFFER Two Greater Hartford speculative warehouses hunt for tenants amid slowdown in industrial leasing First-quarter leasing activity in 2025 was also at a five-year low, with 261,092 square feet leased through March 31, versus 380,575 square feet for the same period last year, and 464,124 square feet during the first three months of 2023. Sean Duffy, an executive managing director with Cushman & Wakefield's industrial group, said federal tariff policies prompted companies to pause construction and leasing. That hasn't killed off activity, but it has cooled Connecticut's hot industrial market to more traditional levels. "Now, all that's happening is we returned to historic demand," Duffy said. "We just returned to the mean. The optimistic bounces have been removed from the market." Speculative buildings currently available in Greater Hartford — there are two, according to experts — are in a far better position than those in other East Coast industrial strongholds, Duffy said. Connecticut has not had the over- abundance of speculative development that's taken place in other markets, such as Boston and New Jersey, he said. Others agree. According to a recent market anal- ysis by commercial real estate tracker CoStar, although Hartford's industrial sector experienced a cooling period between 2023 and 2024, the impact so far has been less pronounced than elsewhere. CoStar estimates the 145.6 million square feet of industrial space it tracks in the Hartford region had a vacancy rate of 5.3% at the end of the first quarter of 2025, nearly flat from the end of 2024, but up from 4.1% at the end of 2022. The national industrial vacancy rate is 7.1%, according to CoStar. Rents, meanwhile, have continued to increase annually, ending at $9 per square foot at the end of last year, according to CoStar. "We are not bad," Duffy said. "Over- building is not a thing here. This market doesn't have a need for a downward adjustment (on rental rates) because there was no hyper-building." More development on the table In Windsor Locks, New Jersey- based real estate developer Silverman Group expects to have a speculative 250,240-square-foot logistics building, at 30 Hamilton Road, ready for occu- pancy in September. It does not yet have tenants. The building is going up on a portion of a 40-acre property near Bradley Inter- national Airport that Silverman Group purchased in late 2021 for $1.9 million from aerospace company Hamilton Sundstrand Corp. Meantime, a 199,000-square-foot, two-floor laboratory and office building that came with the Hamilton Sundstrand property is being converted into manu- facturing space for Aalberts Surface Technologies, which has signed a 10-year lease with options to extend. The multinational company provides By Michael Puffer mpuffer@hartfordbusiness.com N early a year after completing a 170,300-square-foot flex logistics building in Windsor, developers Luzern Associates, of Greenwich, and Boston-based Foxfield have yet to sign any tenants. They remain undeterred. In fact, the partners are so confident in Greater Hartford's industrial real estate market that they plan to launch another speculative development in July: construction of a 140,000-square- foot logistics building in Manchester, at 71 Commerce Road. The project is expected to wrap in October 2026. Nicholas Campofranco, Luzern's principal and chief investment officer, said industrial real estate activity is picking up following a quiet period. He attributes the slowdown to unease over higher interest rates and, later, uncer- tainty over federal tariff policy. He believes business leaders are nearing a point where they've digested both headwinds, and are increasingly ready to act on pent-up demand. "You are certainly hearing a lot of waiting and pausing, which leads me to believe user groups are putting off decisions on space," Campofranco said. "But ultimately, decisions on space will have to be made." Art Ross — senior managing director of the industrial practice group for brokerage firm Newmark, which is marketing Luzern's property — said there has been a recent uptick in users shopping for Greater Hartford warehouse space. About half of those potential tenants have been food-and- beverage companies, he said. "There are transactions that are getting signed and landing over the finish line," Ross said. "There certainly seems to be more activity of late, and it appears to be legitimate activity." Ross acknowledged companies continue to take extra time to shop around and perform due diligence. Tighter inventory shields CT Industrial leasing activity has been slowing for more than a year. In 2023, users signed leases for 1.9 million square feet of space in Greater Hartford, according to research by Cushman & Wakefield. That slowed to just under 1.2 million square feet in 2024. Continued on next page TOTAL SQUARE FEET LEASED 2020 2021 2022 2023 2024 TOTAL INDUSTRIAL LEASING ACTIVITY IN GREATER HARTFORD 1M 2M 3M 4M 5M 6M Source: Cushman & Wakefield

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