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March 11, 2019 FOCUS: Greater Hartford Living

Amid continued demand, next major wave of Hartford apartments set to debut in 2019

HBJ Photos | Joe Cooper Cassandra Sanchez recently moved to downtown Hartford, taking residence in the 777 Main St. apartment high-rise. She said she enjoys city living, including her dog-friendly apartment.
(Top photo) 111 Pearl St. office-to-apartment conversion under construction. (Bottom photos from left to right) Outside shot of 777 Main St. apartment building; inside look at Front Street Lofts apartment; and 81 Arch St. apartments under construction.
Michael Freimuth, Executive Director, Capital Region Development Authority
Bruce Becker, Owner, 777 Main

Cassandra Sanchez landed the perfect new job at a Hartford law firm last year — but the two-hour round-trip commute every day from her apartment near the shoreline was killing her.

She wanted to move closer to work, yet living in the Capital City never occurred to the 30-year-old attorney, who grew up in Hartford's suburbs.

“Hartford has never really been a place where people think to live,” she said. “But my boss suggested looking at places downtown.”

She decided to take her advice and searched a few real estate sites. The number of hits surprised her.

“I was impressed that there were all these newer apartment buildings,” she said.

In December, Sanchez signed a lease at 777 Main St., the residential high-rise that opened in the former Bank of America building in 2015, and she's pivoted from skeptic to evangelist for downtown living. Her apartment is bright, dog-friendly, close to restaurants and most importantly, just a short walk to her law firm in CityPlace I on Asylum Street.

“There was something about this building right away,” she said. “I knew I could make it my home.”

The 285-unit residential skyscraper is part of a wave of office buildings-turned-apartments that have opened in the city over the last five years with the help of taxpayer-funded investments from the Capital Region Development Authority, a quasi-public agency charged with revitalizing the city.

By the end of this year, would-be Hartford renters will have hundreds more downtown living spaces to choose from as the next crop of CRDA-backed projects totaling $112 million debuts.

“This is a big year,” said Michael Freimuth, executive director for the economic-development agency, which has provided $32.6 million in supplemental financing to support the expected 491 new units, which aim to lure more residents — especially young professionals like Sanchez — to Hartford's central business district.

Major projects coming online in 2019 include the Great River Lofts, repurposed from the old Radisson Hotel at 50 Morgan St.; Teachers Corner, a 60-unit complex at 370 Asylum targeting educators; the amenity-rich Spectra Pearl, which will house 258 units in two adjacent converted office towers at 101 and 111 Pearl St.; and 81 Arch St., a newly constructed 53-unit complex in the Front Street entertainment district. Some 200 additional apartments are in the pipeline for completion in 2020 and 2021, Freimuth said.

Freimuth and developers are expecting the new apartments to fill quickly, just as they did when a similar burst of inventory came on the market simultaneously in 2015, the year 777 Main St., the Front Street Lofts and others debuted.

“Those units were absorbed inside of the first year,” Freimuth said, adding that downtown apartment buildings are still running occupancy rates of 95 percent and higher.

Teachers Corner, set to debut April 1, had nearly half its 60 studios, one- and two-bedroom units pre-leased as of late February, “which is a very positive indication of market demand given that the building is not even open yet,” said developer Ron Beit, CEO of Newark-based RBH Group.

Peter Christian, director of development and acquisitions for Greenwich-based HB Nitkin Group, builder of the Front Street Lofts and 81 Arch St., said “demand is strong and I think it's going to continue to be strong.”

He said the Lofts just hit 100 percent occupancy last month after posting occupancy rates north of 95 percent for the last two years. He expects similar success when 81 Arch begins lease-up in April for its targeted May opening.

“We've really had more of a supply issue than a demand issue,” said Freimuth, acknowledging there may be an initial adjustment period when the latest apartments first come online. “It'll probably take 12 to 18 months to absorb a lot of these (new) units once they hit, and they're going to hit throughout the year. The beauty of it is that they're coming on in phases.”

Although an expanding commercial office market and the opening of UConn's downtown campus in 2017 are among factors driving demand, there hasn't been a corresponding spike in monthly rents, which have plateaued at $1.80 to $2.30 per square foot, said Freimuth. Market-rate rents at Teachers Corner, for instance, run $1,000 to $1,980 a month; affordable units are $740 to $910.

“We still haven't reached a point where the rents are high enough to drive a wholly private” apartment-development project, Freimuth said.

The more, the merrier

Owners of existing apartment buildings say they aren't worried this year's additions will oversaturate the market. Instead, they welcome the infusion of new residents, saying it will drum up demand by enhancing the vibrancy of the city. Christian said he'd be more concerned if he was the only developer building apartments downtown.

“My own feeling is the more the merrier, and I'm really excited by the momentum,” said Fairfield developer Bruce Becker, who owns 777 Main. He said he sees Hartford following a similar track to New Haven, where he also developed a downtown apartment tower earlier this decade.

“The more housing that was built, the greater the demand was, and I think that's happening in Hartford, too,” he said, explaining that more tenants can also drive desirable retail development. He's most interested in what's being planned for some of the buildings at street level.

“I hope that they take the approach we did,” Becker said, ticking off a list of 777 Main's retail storefronts, including Blue State Coffee, a barber shop, hot yoga studio and a CVS. “Even if it doesn't make immediate financial sense, those are the things that help add to the quality of life in Hartford.”

Sanchez, his new tenant, hopes so too. While she praises how far Hartford has come as a livable city, she wishes there were more grocery and clothing store options downtown, which she said are plentiful in other urban centers known for attracting Millennials. Though she can now walk to work, she still needs a car to pick up weekly essentials.

“I think a perk of living in a city is being able to walk to almost everything,” she said.

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