Hartford Business Journal

14 Hartford Business Journal • August 1, 2016 www.HartfordBusiness.com 111 Founders Plaza leases to 97% full A series of recent lease signings/renew- als at East Hartford's 111 Founders Plaza has pushed that office tower to near full occupancy, brokers say. According to Goman+York Property Advisors, the building's leasing broker, seven office leases covering 31,200 square feet were signed to push occupancy to more than 97 percent: • Engineering firm Quest Global Services expanded by 8,000 square feet and now occupies more than 28,000 square feet. • Workplace-injury Law firm McGann Bartlett & Brown renewed its lease on 8,300 square feet. • Connecticut Association of Real- tors has renewed its lease on 4,700 square feet. • Professional staffer KForce signed for 3,200 square feet. • Tax-accountant Case, Corrado, Yazmer & Co. leased 3,200 square feet. • Staffing firm CoWorx leased 2,000 square feet. • Wealth manager Financial Vision leased 1,800 square feet. Merchant 99-111 Founders LLC is landlord. Windsor retail center in $3.36M refi A Windsor retail property recently under- went a $3.36 million mortgage refinancing, its owners say. Built in 1989, the property is a single-sto- ry, 34,084-square-foot building on 6.69 acres at 555 Day Hill Road. 555 Day Hill LLC has owned the prop- erty for more than 20 years. Educational Playcare Ltd. is the anchor tenant, the landlord said. Rhode Island's Washington Trust was the financing institution. $900K E. Hfd. sale The 40,200-square-foot industrial build- ing on Prestige Park Road in East Hartford recently sold for $900,000, brokers say. 166 Prestige Park Road LLC bought the building on 1.84 acres at 166 Prestige Park Road. 55 Pent Highway Associates LLC was the seller. Sentry Commercial represented the seller; CBRE-New England represented the buyer in this transaction. Bob's Chalet sites sold The pair of Bristol buildings that have been home to Bob's Sports Chalet for more than 35 years were sold recently for $420,000, brokers say. Both storefronts and four residential apartments are at 805 & 809 King St. Robert and Estelle Abrams sold the properties to BillBel LLC. Bob's Sports Chalet, a ski shop and sports apparel store, will continue oper- ating both stores at their location. Advance Realty CT LLC was sole bro- ker in the sale. Bristol foreclosure sale The 6,196-square-foot Bristol com- mercial building at 116 Riverside Ave. was recently sold for $215,000, brokers say. Desmarais Properties LLC acquired the property from United Bank Commer- cial Properties Inc. The purchaser's Desmarais Property Maintenance LLC affiliate, a property- servicer specializing in snow removal, will occupy the building, according to sole broker Advance Realty CT LLC. n Deal Watch wants to hear from you. E-mail it, along with contact informa- tion to: gseay@HartfordBusiness.com. Gregory Seay is the Hartford Business Journal News Editor. Gregory Seay DEAL WATCH 111 Founders Plaza, East Hartford. 805-809 King St., Bristol. P H O T O | C O N T R I B U T E D P H O T O | C O N T R I B U T E D P H O T O | H B J F I L E 116 Riverside Ave., Bristol. Why restaurant recession fears are on the rise By Matt Egan CNNMoney A mericans eat out when they're feeling good about things. That's why a recent slow- down in restaurant sales is alarming some. In the past few weeks, McDonald's, Taco Bell owner Yum! Brands and Starbucks have all described a new wave of caution that has crept up among customers, keeping them from splurg- ing on meals out. The precise cause of the shift is not clear, with some blaming rising prices and slowing job growth, and others suggesting security fears or even the 2016 election are playing a role. No matter the catalyst, the deceleration is pronounced enough for Stifel Nicolaus to warn of a looming "restaurant recession" that may represent a "harbinger" to a widespread U.S. recession in 2017. "Restaurant industry sales tend to be the 'canary that lays the recessionary egg,' " Stifel analyst Paul Westra wrote in a research report published last week. The gloom-and-doom stands in stark con- trast with the consensus among Wall Street economists, who see low chances of an immi- nent U.S. recession. But Westra went even further, warning that such a U.S. recession could be the "worst ever" for restaurants because it would come just as they grapple with rising labor costs. He urged investors to sell Panera and Olive Garden owner Darden Restaurants, and warned that Chipotle could lose half its value. Even if they end up being too bearish, as some believe, it is clear that the restaurant industry is grappling with a slowdown. Here are the possible drivers: Prices are rising: McDonald's executives believe at least some Americans are choosing to stay at home because grocery store prices haven't risen as fast as restaurant menu prices. Prices have gone up because restaurant owners have been forced to give workers a long overdue pay raise due to minimum-wage hikes from local governments and tougher competi- tion for talent. Connecticut's minimum wage increased from $9.15 an hour to $9.60 this year, and will rise to $10.10 Jan. 1, 2017. Of course, the flipside is that the same people should now have more cash to spend on eating out. Job growth peaking: Americans have lately become cautious about how they spend their money. Despite low unemployment and rising wages, Buffalo Wild Wings CEO Sally Smith told analysts in a conference call last week that people are "very reluctant to spend a lot of discretionary dollars." That's why Hedgeye restaurant analyst How- ard Penney thinks there's some truth to the res- taurant recession worries. "People are cutting back because they feel insecure. The first thing that goes is restaurant spending," he said. Too many restaurants: The restaurant industry recently emerged from a big IPO wave that gave newer brands like Shake Shack, Zoe's Kitchen and El Pollo Loco the ammo to expand. But are all those new stores really needed? Rapid development may be exceeding demand, and eating into the traffic at existing restaurants, which are the ones that Wall Street focuses on. Terrorism: Howard Schultz, whose Star- bucks coffee giant operates over 24,000 stores, is known to have his finger on the pulse of consumers. That's why it was interesting to hear the Starbucks CEO recently explain that race- fueled "domestic civil unrest" and "terror" incidents have "created a level of anxiety" among consumers. The security excuse may sound just like that — an excuse — but some analysts think it makes sense. "I would take his word for it. Are there con- cerns about congregating in public places? Definitely," said Matthew Difrisco, an analyst at Guggenheim Partners. However, Difrisco noted that these secu- rity fears tend to only have a "very short-lived" impact on sales. While Penney said he can't tie a "direct cor- relation" between terrorism and restaurant sales, he does think it's playing a role. "It works into the social conscience of people," he said. Political jitters: McDonald's CEO Steve Easterbrook listed "elections" and "global events" as potential drivers of consumer caution. Schultz also cited a "very uncertain election." But are Americans really looking at the polls before deciding whether to buy a Big Mac? (If so, that's great news for polling sites like RealClearPolitics.com.) "I don't give that a lot of validity," said Difris- co. "Political discourse has been dysfunctional for more than just the past year." n P H O T O | C N N Slowing sales receipts among McDonald's, Starbucks and other national restaurant brands are fueling industry worries.

• Cover