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August 23, 2021

With apartment boom still raging, Greater Hartford developers focus on amenities to lure tenants

PHOTO CREDIT | STEVE LASCHEVER Developer Michael Belfonti inside his soon-to-debut Cromwell luxury apartment complex called “The Landon.”

Residents at the new 160-unit Cromwell apartment complex dubbed The Landon will have access to an upscale fitness center, coworking space and a dog spa, in addition to other perks.

About 5,000 square feet of the complex is dedicated to such amenities.

Up to about a decade ago a building with all those bells and whistles outside a major city would likely be an outlier, said Michael Belfonti, CEO of Hamden-based Belfonti Cos., which developed the Landon. But today, such features are necessary to compete for tenants.

“In the old days, if people could buy, they would never rent — rent was thought of as a second alternative,” Belfonti said. “That’s not the case anymore.”

In an effort to serve a combination of empty nesters and well-healed Millennials who are renting apartments instead of buying houses, Belfonti and other developers with projects in Greater Hartford say that highly-amenitized buildings are becoming their default.

And as many white-collar workers shift to a hybrid work setup in which they spend more time at home, features that once seemed opulent are becoming necessary to attract such tenants.

The trend of developers including more amenities in new residential buildings predates COVID-19 and the resulting work-from-home arrangements. A study by the Joint Center for Housing Studies at Harvard found renters with a household income of at least $75,000 accounted for three-quarters of the growth in U.S. renters between 2010 and 2018, a period during which apartment dwellers grew by 3.2 million.

Marty Kenny

Hartford-based developer Marty Kenny said that for about a decade developers seemed to be trying to outdo each other by including increasingly extravagant features to buildings and complexes geared toward young professionals and empty nesters.

“The amenities thing for a while was like a nuclear arms race,” said Kenny, president of Lexington Partners LLC. “Some of it’s silly, like do I really need a rock climbing wall in my building?”

But the market appears to have reached a new normal in which market-rate apartment developments cannot, for example, simply stick a treadmill and dumbbells in an open area to serve as a gym, and still be competitive.

Fitness centers with state-of-the-art equipment and common areas for socializing are must-haves for new complexes, Kenny said.

In June 2020, tenants started moving into The Borden, a $32-million apartment complex Lexington Partners developed on the Silas Deane Highway in Wethersfield. The five-story, 111-unit building includes a fitness center that has a golf simulator, rooftop lounge and pet spa.

It only took about five months for the building — which is currently advertising a studio unit for $1,560 per month and a two-bedroom at $3,068 — to reach 95% occupancy, Kenny said.

“Renters now aren’t renters by necessity, they’re renters by choice,” Kenny said. “People are looking for a social life, and for amenities that distinguish an apartment building from an ordinary… apartment complex.”

Critical lifestyle

If the market for multifamily housing was trending toward more amenities before COVID-19, the pandemic has increased the importance of features like coworking spaces and yoga studios, said Randy Salvatore, founder and CEO of Stamford-based RMS Cos.

As white-collar employers in Greater Hartford and across the country are largely converting their workforce to hybrid schedules, allowing employees to work from home at least one or two days per week, renters seem to be opting for buildings that have common areas for work and recreation, Salvatore said.

RMS is currently building the North Crossing development in downtown Hartford near Dunkin’ Donuts Park. The project’s $50 million first phase will include 270 apartment units at the corner of Main and Trumbull streets. It will also have about 14,000 square feet of space housing amenities like a gym with interactive training screens — similar to Peloton — outdoor grilling areas and a bowling alley.

There will also be a rooftop deck with views inside the baseball stadium.

The targeted renters are people who may start the day working from their apartment, migrate to a coworking area for coffee and a change of scenery, take a break to work out at the gym and finish their day on the rooftop, where they can relax and socialize once they’re done with work.

“These are critical lifestyle things that are so much more than ... the four walls where you’re going to sleep,” Salvatore said. “We’re elevating things because of the amount of time people are now spending in their apartments.”

Many prospective tenants won’t even look at buildings without 5G internet, not amenable to pets and that lack at least some upscale features in common areas, said Michael Freimuth, executive director of the quasi-public Capital Region Development Authority (CRDA). But now-a-days, many are also seeking out an urban lifestyle complete with easy access to transportation, and restaurants and entertainment within walking distance.

In the past, young professionals working in Hartford opted for buildings in nearby suburbs like Manchester and Rocky Hill, said Freimuth, who has overseen the conversion of downtown office buildings into more than 2,000 residential units in recent years.

That’s not really the case anymore, he said.

“Today, they’re more likely to be headed to downtown [Hartford], and are comfortable with downtown,” Freimuth said. “The folks who are coming downtown are generally new to the area … [and] receptive to urban living.”

City living

For Kenny’s two current projects in downtown Hartford, urban living is the main amenity the buildings offer, he said.

Kenny is part of a development team — that also includes LAZ Parking’s Alan Lazowski and Shelbourne Global Solutions — that is converting a former office building at 99 Pratt St. and 196 Trumbull St. into 127 residential housing units, and will break ground on a project converting 42 townhouses on Temple Street into multi-tenant apartment buildings in September. As the projects move forward, Kenny and partners are also trying to revitalize Pratt Street in an effort to make the area a draw for prospective urbanites.

In order for downtown buildings to really attract the rising demographic of renters-by-choice, the city will need to add more restaurants, entertainment and retail options, Kenny said.

There is a window of opportunity for growth, Kenny said, with a number of residential buildings set to come online in the coming months and years, and vacant commercial and office buildings in the area. If the right mix of arts and entertainment venues, restaurants and services open to serve people moving into apartments, every downtown apartment building will be able to offer prospective tenants the city living they desire without the price tag of New York or Boston.

Kenny said a tenant at one downtown Hartford building Lexington owns, Spectra Pearl, moved from an apartment in New York’s Theater District into a penthouse unit in Hartford.

“He’s found something where he has a quality of life he didn’t have,” Kenny said. “He’s got more space, and he’s still living an urban lifestyle.”

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