Brokerage Outlook: Connecticut

• Connecticut Office  - New!

• Hartford Office

• New Haven Office

• Connecticut Retail

• Bridgeport/Stratford Industrial

Connecticut Office Submitted by Garland Warren, senior vice president with the Bethel, Conn., office of CBC Scalzo Group/ONCOR International. Posted 08-25-08. What area is your expertise? Connecticut — Fairfield County. What trends do you see presently in office development in your area? Slow to moderate growth in office demand.  An adequate supply of product is available but not many “lookers.” Who are the active office developers in your area?  Very little new development.  Mostly local developers without national recognition e.g. Building and Land Technology of Norwalk and The Davis Company, also of Norwalk. Please name one or two significant office developments in your area. What impact will these projects have on the market? Blackrock Realty’s new railroad station project is underway in Fairfield that will become Fairfield Metro Center office park.  The 100 Fairfield Metro Center building will encompass the first phase of the development and contain 200,000 square feet of Class A office space.  A pavilion building on-site will add another 70,000 square feet to the overall development.  Phase I is scheduled for completion in 2009.  Where is the majority of development taking place? Why is this area doing well? Lower Fairfield County.  It’s located along the commuter route to New York City. What area do you expect to be the next big development market? Why?  The 33-acre Wilton Corporate Park will expand with the addition of 40 and 60 Danbury Road consisting of 161,222 square feet and 81,000 square feet respectively.  The developer is The Davis Company.  The former is schedule for completion in 2008, and the later in 2009.  This is a desirable bedroom community in within commute range of NYC and Stamford. What areas are doing well in terms of office leasing? Which areas are struggling with office leasing? The greater Danbury area is struggling.  Lower Fairfield County is doing better. Please give a measure of office vacancy rates.  Please give a measure of available sublease space.  Danbury area overall vacancy rates are running between 15 to 18 percent, the highest in Fairfield County.  Overall Fairfield County rates are slightly lower at around 12 percent. What impact do current interest rates have on the office market? What predictions do you have for interest rates and their effect on the office market in the next year?  Lower rates will help stimulate and encourage investment.  We don’t expect much change in 2009.  What is the status of job growth/(un)employment rates and what bearing will it have on the office market?  Growth is slow to negative.  Slow growth will adversely impact office development.  Is there any type of office tenant absorbing a majority of space? What industries do you expect to expand in the next year to absorb a great deal of office space? What areas will be affected?  Technology and energy-related companies have the greatest potential for growth.  No particular area is affected more than any other.

Hartford Office Grieco Submitted by Joel Grieco, senior director with the Hartford, Connecticut, office of Cushman & Wakefield. Posted 12-30-05. click here to see chart What area is your expertise? • My area of expertise is office leasing in Hartford County, Connecticut. What trends do you see presently in office development in your area? • Hartford County has seen very little new office development in the past 12 years. The economics of the market do not support speculative construction. We are seeing some build-to-suit development driven by large users that can not satisfy their needs with older, outdated product. Who are the active office developers in your area? • Northland Investment Corporation, The Matos Group, Cornerstone (Mass Mutual), New Boston Fund, Capital Properties, and Griffin Land are all active developers/owners in the Hartford County market. Please name one or two significant office developments in your area. What impact will these projects have on the market? • Hartford 21 is a mixed-use project with 106,000 square feet of office space currently under construction at 241 Trumbull Street in downtown Hartford. Scheduled to be completed in early 2006, it is being developed by Northland Investment Corporation. In addition to the office component, the project, which is adjacent to the Hartford Civic Center, includes retail space and the tallest apartment building between New York and Boston. The YMCA has already signed on to occupy approximately 38,000 square feet of the office space. The remaining space represents one of the few large blocks of contiguous available space in the downtown market. • Blue Back Square in West Hartford is expected to bring more than 60,000 square feet of class A space to the suburban market in 2007. Where is the majority of development taking place? Why is this area doing well? • The West Hartford submarket is enjoying a boom from its very unique pedestrian retail center and strong housing market. The new Blue Back Square mixed-use development is riding this wave and delivering new multifamily housing, retail, office and medical office space. What area do you expect to be the next big development market? Why? • The Rentschler Field development in East Hartford is poised to be a major new development for the Northeast. This 920-acre site is home to Pratt & Whitney's headquarters, United Technologies Research Center and 700 acres of developable land. A master plan calls for development of millions of square feet of mixed-use space, including R&D, office, manufacturing, education, hospitality, recreation, residential and other uses. This development has commitments from a couple of large retailers and a 500,000-square-foot corporate office user. What areas are doing well in terms of office leasing? Which areas are struggling with office leasing? • The entire Hartford County market is seeing rather anemic leasing activity. The towns of Rocky Hill, Glastonbury and Windsor have seen pockets of recent success with some new large leases being completed in these markets. Please give a measure of office vacancy rates. Please give a measure of available sublease space. Third quarter 2005 vacancy rates: • Hartford County total (inventory = 24.7 msf): 17.9 percent overall vacancy rate, 16.3 percent direct vacancy rate • Hartford CBD (inventory = 7.7 msf): 21.6 percent overall vacancy rate, 20.7 percent direct vacancy rate • Downtown Periphery (inventory = 2.0 msf): 12.4 percent overall vacancy rate, 12.0 percent direct vacancy rate • Western Hartford County (inventory = 5.7 msf): 12.7 percent overall vacancy rate, 10.4 percent direct vacancy rate • Southern Hartford County (inventory = 3.0 msf): 21.4 percent overall vacancy rate, 20.3 percent direct vacancy rate • Eastern Hartford County (inventory = 3.2 msf): 8.9 percent overall vacancy rate, 8.7 percent direct vacancy rate • Northern Hartford County: (inventory = 3.0 msf): 28.6 percent overall vacancy rate, 22.8 percent direct vacancy rate What is the status of job growth/(un)employment rates and what bearing will it have on the office market? • Job growth in the Hartford area has been slow, and the Department of Labor indicates that the employment level for Connecticut has risen 0.8 percent from October 2004 to October 2005. The Hartford labor market area saw growth of just 0.5 percent over the same period. The unemployment rate for the state of Connecticut has also gone up slightly, rising somewhat steadily since the beginning of the year, but that has largely been attributed to more people trying to enter the workforce now that they are seeing companies start to hire again. Is there any type of office tenant absorbing a majority of space? What industries do you expect to expand in 2006 to absorb a great deal of office space? What areas will be affected? • Hartford County continues to be dominated by large insurers and financial services companies. There is not an "engine of growth" that this area can expect to add office jobs. In fact, further mergers and consolidations in the insurance sector could have a negative impact on the local market. Would you like to make any additional observations about the office market in your area? • Connecticut is known as the "land of steady habits." True to this, our office market has proven to be rather steady and predictable, without large peaks and valleys. There has not been over-building, and we stand poised to take advantage of any positive economic changes. Downtown Hartford is witnessing tremendous private and public investment in apartments, retail, convention space, educational space and parking structures. The city of Hartford has a certain "buzz" that seems to be growing and catching on.

New Haven Office Motley Submitted by Robert Motley, director with the Hartford, Connecticut, office of Cushman & Wakefield. Posted 12-30-05. click here to see chart What area is your expertise? • I specialize in office leasing in New Haven County. What trends do you see presently in office development in your area? • New office development is almost non-existent, there have been only five or six sizeable speculative office buildings constructed in the New Haven area in the past 10 years — and none since 2003. Given the current demand and supply, it is unlikely that any new office development is likely to occur in the foreseeable future. Who are the active office developers in your area? • Key developers in the New Haven area are Winstanley Enterprises, Fusco Corp. and College Street LLC. Please name one or two significant office developments in your area. What impact will these projects have on the market? • As part of the city of New Haven's Gateway Downtown Development Project, Gateway Community College is going to utilize 300,000 to 400,000 square feet of commercial space. This is not traditional office space, but it does represent the most significant activity in the New Haven downtown area. • Mortgage Lenders Network USA (MLN) will break ground on a new 230,000-square-foot headquarters building in Wallingford (located in northern New Haven County) in the spring of 2006. Workstage has been hired to design, develop and construct the new facility, which will be light and modern with European influences. The development is aimed at pleasing employees by providing a more modern, efficient and pleasant working environment. MLN will close its Middletown, Rocky Hill and current Wallingford locations when the building is completed in 2007. MLN currently has more than 600 employees and is expected to add 1,000 more over the next 8 years. Where is the majority of development taking place? Why is this area doing well? • As mentioned before, the largest commercial development is The Gateway Downtown Development Project in downtown New Haven. On June 3, 2004, the state of Connecticut and New Haven Mayor John DeStefano Jr. jointly announced a historic $230 million development project — including $180 million in state bond funding — to relocate Gateway Community College and the Long Wharf Theatre to brand new facilities in downtown New Haven. Ultimately, the entire project will revitalize a long-vacant downtown area, including a hotel and conference center, new residential and retail space, and the finishing touches of infrastructural and streetscape improvements. What area do you expect to be the next big development market? Why? • Once the Gateway Downtown Development Project is completed, older, less functional buildings in the downtown New Haven submarket will be upgraded to be more competitive. What areas are doing well in terms of office leasing? Which areas are struggling with office leasing? • The northern and eastern New Haven submarkets are seeing active leasing and positive absorption. Unfortunately, the New Haven CBD has been slow for the last 12 months. Please give a measure of office vacancy rates. Please give a measure of available sublease space. Third quarter 2005 vacancy rates were: • New Haven CBD (inventory = 3.3 msf): 17.1 percent overall vacancy rate, 14.5 percent direct vacancy rate • Downtown Periphery (inventory = 2.0 msf): 15.1 percent overall vacancy rate, 12.0 percent direct vacancy rate • Western New Haven County (inventory = 1.8 msf): 23.8 percent overall vacancy rate, 21.9 percent direct vacancy rate • Eastern New Haven County (inventory = 0.4 msf): 22.6 percent overall vacancy rate, 22.6 percent direct vacancy rate • Northern New Haven County: (inventory = 2.7 msf): 15.9 percent overall vacancy rate, 12.8 percent direct vacancy rate What is the status of job growth/(un)employment rates and what bearing will it have on the office market? • Over the past 12 months, job growth has been flat. The Department of Labor reported that the employment level for the New Haven labor market area saw growth of just 0.1 percent from October 2004 to October 2005. This definitely has affected the absorption of office space in New Haven County. Until real job growth begins, we are likely to continue to see a relatively flat overall office market. Is there any type of office tenant absorbing a majority of space? What industries do you expect to expand in 2006 to absorb a great deal of office space? What areas will be affected? • Healthcare and educational tenants are absorbing about 100,000 square feet per year in and around New Haven. Would you like to make any additional observations about the office market in your area? • Life sciences continue to suffer due to limited venture capital investments.

Connecticut Retail Healey Submitted by Annette Healey, first vice president with the New York City office of CB Richard Ellis. Posted 1-3-06. What area is your expertise? • I'm involved with retail leasing nationally, often in southwest Connecticut, primarily as a tenant representative. What trends do you see presently in retail development in your area? • Connecticut downtowns are historically resistant to new development as a result of their strong zoning and architectural review boards, while the exurban commercial corridors are flypaper for the big boxes like Home Depot, Costco, Stew Leonard's (a Connecticut institution) and Lowe's Home Improvement. What type of retail product is doing well in your area? • The big box retailers are doing well along the corridors, while boutique shops and restaurants are doing well in towns such as New Canaan, Greenwich and Westport. However, national retailers are expanding their presence in these markets, which have historically had more exclusive retail offerings. What retailers are new to your area? • Raymour & Flanigan, Lowe's Home Improvement, Best Buy, Target, Burlington Coat Factory and Costco are all fairly new. LA Fitness recently opened in the Ridgeway Shopping Center in Stamford. Who are the active retail developers in your area? • The most active developers are Starwood Ceruzzi, Edens & Avant and F.D. Rich Company. Please name one or two significant retail developments in your area What impact will these projects have on the market? • Starwood Ceruzzi and Westfield are changing the face of Milford along the Post Road where Westfield is expanding the regional mall and Ceruzzi is leasing a power center. Ceruzzi has also been very active on Federal Road (another big box mecca) in Danbury where it is completing the Lowe's Home Improvement and Best Buy centers. Where is the majority of development taking place? Why is this area doing well? • The only significant new developments in a downtown recently have been in Stamford where F.D. Rich and Target teamed up to develop a portion of Broad Street between Summer Street and Washington Boulevard. Target has been open for some time now, and the ground floor is being leased to smaller tenants. Citibank will open a 5,000-square-foot branch there in several months, and there are deals pending on the remaining 7,100 square feet. • Around the corner at Atlantic and Broad, a vintage office building called the Landmark was purchased by Reckson. New ownership is taking advantage of that underutilized corner and is developing 36,000 square feet over two levels. The new owners would like to sign a white tablecloth restaurant and a bookstore, but no leases have been signed to date. • Also in Stamford, Antares has won the right to develop the former Pitney Bowes campus south of I-95. Plans have not yet been unveiled but the expectation is for a mixed-use project including residential, hotel, office and retail. What area do you expect to be the next big retail development market? Why? • Another downtown looking at rejuvenation is Norwalk, where three local developers — Seligson, Poko Management and DiScala — are carving up the project to compete with the glamorous downtown ambience and high rents experienced on Greenwich Avenue in Greenwich and Main Street in Westport. Along the highway at Exit 15, a to-be-determined mixed-use project will be undertaken at the former Connecticut Limo site at Exit 15 and I-95. Please describe the retail leasing activity in your area. • The market has been relatively active, but much of the activity has been driven by the banks and big boxes. We may be seeing a bit of a slowdown over the last quarter. What major leases have been closed recently? • Best Buy recently inked 45,000 square feet on Eagle off Federal Road in Danbury. What types of retailers should look into your market in the coming year? What type of retail is needed? • I expect Whole Foods to start sniffing around and other food retailers to follow.

Bridgeport/Stratford Industrial Wettenstein Submitted by Bruce Wettenstein, SIOR, partner with the Westport, Connecticut, office of Vidal/Wettenstein. Posted 2-17-06. What area is your expertise? • the Bridgeport/Stratford metropolitan area What trends do you see presently in industrial development in your area? • Prices are going to escalate slightly due to the moderately low interest rates and a limited number of available properties. What type of industrial product is doing well in your area? • warehouse, distribution, packaging Who are the active industrial developers in your area? • Robert D. Scinto Inc., Winstanley Enterprises, Peter DiNardo Enterprises Please name one or two significant industrial developments in your area. What impact will these projects have on the market? • none recently Where is the majority of development taking place? Why is this area doing well? • Shelton, Connecticut's location is close to the urban Bridgeport market but is in the suburban area, directly on Route 8. Land is more available in the valley area (Shelton, Ansonia, Derby, Naugatuck) than in the developed inner city of Bridgeport. What area do you expect to be the next big industrial development market? Why? • The next market in the southern part of the state will probably continue to be the valley area consisting of Shelton, up to Naugatuck. The reason is the lower cost of land, and the availability of land. There is nothing available that is sizable in Fairfield County unless you demolish an existing complex. Please describe the industrial leasing activity in your area. • Two years ago, 80 percent of the transactions were sales. Last year it was approximately 50/50 split. During the past 12 months, the leasing activity has increased by approximately 20 percent. Please describe the industrial sales activity in your area. • As long as there is inventory available for sale and at a reasonable price, it will sell. Please give a measure of industrial vacancy rates. Please give a measure of available sublease space. • The greater Bridgeport metro area has approximately 25 million square feet. There is about 6 percent vacancy in the properties that are marketable. If you include the economically obsolete, multi-story old mill buildings, the vacancy rate goes to 12 percent. What impact do current interest rates have on the industrial market? What predictions do you have for interest rates and their effect on the industrial market in 2006? • Sales were very active in 2004 and 2005, due to the low interest rates. This year we suspect the sales activity to continue, not so much because of the interest rates but because of the appreciation that one comes to expect in our market. What industries do you expect to expand in 2006 to absorb a great deal of industrial space? What areas will be affected? • Most sales are to distribution and assembly operations. There are some fabrication companies looking for expansion.