Hartford Business Journal

HARTFORDBUSINESS.COM | JANUARY 12, 2026 31 INDUSTRY OUTLOOK | COMMERCIAL REAL ESTATE EXPERT'S CORNER Tenant market to persist in 2026 as high vacancies temper Hartford's modest office gains Downtown Hartford's office market continues to face high vacancy rates and limited deal activity. Photo | CoStar By John McCormick and Anna Kocsondy T he Greater Hartford office market continued to face headwinds in 2025 but made modest gains despite stubbornly high vacancy rates. CBRE's market research shows vacancy rates ranging from 12% to 50% across the five Class A Greater Hartford submarkets, underscoring a tenant market trend that has persisted since the pandemic. The office sector recorded an increase of 185,000 square feet in leasing activity during the first three quar- ters of 2025 over the same period last year. The higher volume reflects more transactions, though the average deal size has decreased. Hartford's central business district (CBD) recorded about 235,000 square feet of lease transactions — 60% renewals and 40% new leases — with an average deal size of 7,000 square feet. There were 10 large lease deals downtown involving tradi- tional corporate tenants, law firms and three nonprofit organizations that relocated to the CBD. Corporations continue to embrace hybrid work, with employees aver- aging three days in the office. Leasing and showing activity has been concentrated in amenity-rich buildings and strong neighborhoods, producing lower vacancy rates and higher effec- tive rental rates in areas such as West Hartford and Glastonbury. The West submarket, which includes West Hartford, recorded about 170,000 square feet of leasing activity through the third quarter of 2025, with very little available inventory. Hartford continues to struggle with high vacancy rates and limited deal flow — 2025 will mark the fifth straight year of negative absorption downtown, with an availability rate approaching 40%. Hartford's Class A towers total 6 million square feet across 13 buildings, and property owners are facing rising tenant improvement costs, shorter lease terms and higher operating expenses. It's important to note there has not been a mass exodus of downtown employers over the past five years. Instead, companies have been "right- sizing" their office footprints as hybrid work becomes mainstream. Hartford has continued to attract more than 20,000 square feet of relo- cations from the suburbs, extending a 12-year trend of tenants moving into the central business district. Several notable transactions took place in Hartford and the surrounding suburbs: Downtown Hartford • 280 Trumbull St. captured the majority of leasing activity, totaling 90,000 square feet. South submarket • In Rocky Hill, Hubbard Day School leased 45,000 square feet at 525 Brook St., while MTU Aero Engines expanded its presence with an additional 10,000 square feet at 400 Capital Blvd. • In Wethersfield, Johnson Brunetti renewed and expanded its lease at 100 Great Meadow Road, committing to 14,000 square feet, and Connecticut GI Alliance leased 10,000 square feet at 1290 Silas Deane Highway. North submarket • In Windsor, Sentry Insurance and Konica Minolta leased 12,300 and 16,600 square feet, respectively, at 200 Great Pond Drive. Fiducient Advisors secured 17,600 square feet at 5 Waterside Crossing. East submarket • In Glastonbury, GZA GeoEnviron- mental renewed 9,400 square feet, and Janney Montgomery Scott leased 10,000 square feet, both at 95 Glastonbury Blvd. Hope for a more vibrant downtown Looking ahead, 2026 is expected to remain a tenant market, with office space in West Hartford Center and Glastonbury Boulevard as the two notable exceptions. It's important to remember that the Hartford central business district is a relatively small area — about five by eight blocks — with many amenities: riverfront views, two major highways, a historic 37-acre park, a 16,000- seat PeoplesBank Arena, 6,000-seat Double-A baseball stadium, UConn's downtown campus, a convention center, science center, world-class theater and art museums, and a collection of historic sites. The city's apartment stock has grown by more than 3,000 units over the past five years, meeting rising demand. These assets form the foun- dation of Hartford and are valued by both major employers and residents. The recently announced Vision Committee for the future of Hartford will be led by The Hartford Financial Services Group and other corporate stakeholders. The committee has hired Streetsense to study and recommend strategies to enhance the downtown business district through improved placemaking. Placemaking is a process for shaping public spaces by harnessing the ideas and assets of the people who use them. The committee hopes the resulting report will serve as a blueprint for attracting and retaining large employers and creating a more vibrant downtown. John McCormick is an executive vice president and Anna Kocsondy is a vice president at commercial real estate services firm CBRE Inc.

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