The latest semi-annual online survey of Connecticut commercial real estate conditions, conducted by the Connecticut Economic Resource Center, Inc., indicates that respondents are generally positive about markets, except for the office market and overall economy. The 72 respondents included brokers (65%) and economic development professionals (22%) from Connecticut and out-of-state. Almost one-third of respondents (32%) were from New Haven County.
Respondents generally rated local market conditions as satisfactory, with a majority saying the industrial, investment, and residential markets in their respective geographic areas were “Excellent” or “Good” (53%, 50%, and 62%, respectively). Respondents were more pessimistic about their local office markets, with one-quarter rating it as “Poor” and 56% rating it as “Fair.” At the state level, residential was the only market for which a majority (51%) said it was “Excellent” or “Good.” One-quarter (25%) said the office market was “Poor,” and one-third (30%) said the overall economy was “Poor.”
Respondents are also seeing tangible improvement in the real estate markets in the state. Over half of respondents (57%) reported seeing an increase in buyer interest or inquiries compared to this time last year. Nearly half (48%) also reported an increase in the number of deals. There was an increase of those reporting increased number of deals (from 38%) and buyer interest or inquiries (from 48%) from Q1 of 2016.
“As the need for large office space continues to decline, the demand for modern industrial manufacturing and distribution space continues to increase. End-users have communicated that they are willing to pay a little more, if it translates into occupying a space that can satisfy their operational needs,” said Erron Smith, CERC’s Real Estate Program Manager.
More than half of respondents thought sale prices for industrial, retail, investment, and residential properties would increase in the state in the next three months (63%, 51%, 61%, and 57%, respectively). Most expected this gain to be less than 5%, but over 10% of respondents thought there would be a gain of at least 5% in sale prices for residential.
“There was a similar pattern for lease prices, with expected gains in sale prices for industrial, retail, investment and residential, and a loss for office,” noted Alissa DeJonge, CERC’s Vice President of Research.
The CERC SiteFinder Real Estate Survey measures the health of Connecticut’s commercial real estate market. The survey polls real estate professionals across all eight Connecticut counties asking for perspectives on local conditions in residential and four key sectors of commercial markets (office, industrial, retail, and investment). Respondents include real estate brokers and developers, bankers, appraisers, and economic development officials from around the state.