Wednesday, August 28, 2019

Greater Hartford, CT Report Preview

With the releases of the KeyPoint Reports on Eastern Massachusetts/Greater Boston and Southern New Hampshire behind us, it’s time to move on to the report for Greater Hartford, Connecticut, based on our proprietary GRIID™ retail database. As with the other reports, our modus operandi is to share some of the regional highlights while the complete version is still “baking.” In Greater Hartford, the 2019 retail market was a relatively stable one.

Retail Inventory and Vacancy: Total retail space in Greater Hartford currently stands at 37.6 million square feet, an increase of 166,300 square feet from last year. The modest change is primarily attributed to a low level of new development offset by a number of conversions to non-retail space. However, the region still could not escape a slight uptick in the vacancy rate from 10.6% to 10.8%.  At the same time, the region was able to avoid any large format chain liquidations or multi-store closings such as it had experienced in years past. As a result, Greater Hartford experienced its third consecutive year of positive absorption, netting an incremental 50,700 square feet of occupied retail space.

Size Classifications: During 2019 changes in vacancy rates among size classifications were generally mixed. Size ranges under 25,000 square feet, which represent nearly two-thirds of the total number of tenants in the region, all experienced increases in vacancy rates. The most significant impacts were in size classifications of 2,500-4,999 square feet, which increased from 13.1% to 14.8%, and 5,000- 9,999 square feet, increasing from 12.7% to13.7%. The overall vacancy rate for tenants under 2,500 square feet rose 70 basis points while those in the 10,000-24,999 square foot bracket only experienced a 40 basis point swing. Vacancy rates of size classifications above 25,000 square feet either declined or reflected full occupancy. The 50,000-99,999 square foot segment showed the most improvement, lowering its vacancy rate from 8.1% to 6.4% on the backs of Target filling the vacant Walmart Neighborhood Market in West Hartford and Urban Air Adventure Park, which is planning a fall 2019 opening in the former Bob’s Stores unit in Manchester. Also the vacant Showcase Cinema in East Hartford, which has remained an eyesore for the community for a number of years, was purchased by the town with plans to redevelop the site as a residential or mixed-use project. The vacancy rate in the 25,000-49,999 square foot segment also improved by 100 basis points, a result of backfilling several vacant units. Segments larger than 100,000 square feet remained fully occupied.

Town Rankings: The ten largest retail markets among Greater Hartford communities, based on square feet of retail space supply, have remained unchanged for the past three years. It should be no surprise that the top three towns are Manchester, West Hartford, and Enfield, all regional retail hubs serving Greater Hartford. Manchester dominates the region with 5.4 million square feet of retail space; West Hartford comes in a distant second with 3.0 million square feet. However, it should be noted that the 1.2 million square foot Westfarms regional mall, which straddles the West Hartford/Farmington line, has a Farmington address but is very much rooted in the West Hartford retail hub. Consequently, West Hartford is effectively a 4.0 million square foot market. Regarding vacancy, the lowest rate was found in Rocky Hill, coming in at 4.5%. Glastonbury, which last year held the number one spot, finished 2019 in the runner-up position at 5.4%. Farmington, finishing the year at 6.1%, rounds out the top three. Among towns with the highest vacancy rates, Enfield again finished the year at 20.9%, impacted largely by vacant Macy’s and Sears stores at Enfield Mall. East Windsor followed at 19.4%, followed by South Windsor at 15.9%. Only one of the top ten towns managed to hold its vacancy rate below 10.0%.

Retailer Activity: Planet Fitness led all retailers in square footage gain this year, a result of its acquisition of five Cardio Express locations in the region. Target opened a smaller prototype in the vacant Walmart Neighborhood Market in West Hartford, ranking the discounter in second place. Raymour & Flanigan opened its fourth store in the region, in Avon, to finish in third. The Cardio Express exit from the market represented the largest space contraction among retailers in the region. The 84,200 square foot Kmart closing in Vernon ranked second. It was the largest single store closing in the region. Fallas closed its Wethersfield store, coming in third place.

People’s United Bank added the most locations in the region through its acquisition of Farmington Bank, picking up 12 branches. The Planet Fitness acquisition of five Cardio Express fitness centers was good enough for the runner-up spot. A number of retailers added two stores, including Cost Plus World Market, O’Reilly Auto Parts, and Chick-fil-A among others. Farmington Bank declined by 19 locations, the most in the region. Payless ShoeSource liquidated its seven stores and Subway closed six units, finishing in second and third, respectively.

The full report will be released soon. Stay tuned!
Bob Sheehan, Vice President of Research
BSheehan@KeyPointPartners.com

The KeyPoint Report examines the retail real estate marketplace for Greater Hartford, Connecticut, with a focus on changes between August 2018 and August 2019. This report provides an analysis of changes in the region’s retail activity and examines supply, vacancy and absorption, retailer activity, and market composition by store size and retail categories. The Greater Hartford market includes 26 cities and towns and represents more than 835 square miles. The complete report contains much more detailed information on these categories and more, and will be available soon at KeyPointpartners.com.

KeyPoint Partners’ GRIID™ database maintains detailed information on virtually all retail properties in three key regions: Eastern Massachusetts, Southern New Hampshire and Greater Hartford, Connecticut. These markets encompass approximately 44% of all retail space in New England. GRIID™ has information on nearly 262 million square feet of retail space and nearly 60,000 retail establishments. The KeyPoint Reports contain a summary and analysis of market trends and activity for each studied area.

The 2019 KeyPoint Reports for Eastern MA/Greater Boston
& Southern NH are available now at
KeyPointPartners.com/Retail-Reports. 
The Report for Greater Hartford, CT will follow soon.

No comments:

Post a Comment