The 24.3-million-square-foot Hartford general purpose, multi-tenant office market is treading water, with the ninth highest vacancy rate among the top Reis markets as of the second quarter of 2012. That 22.3% rate was up 10 basis points during the second quarter on 9,000 square feet of negative net absorption, and up 50 from a year earlier. There is little difference in the second quarter vacancy rates for Class A, at 21.6%, and Class B/C, at 22.8%. The Class A segment had 39,000 square feet of positive net absorption in the first half of 2012, however, while the Class B/C segment had minus 76,000.
More positively, net absorption was positive in July and August and the vacancy rate slipped 20 basis points. The 96,000-square-foot Centerpoint in Middletown, forecast to complete construction in August 2013, is the only project under construction following the completion of the 11,250-square-foot 505 Main Crossing in Middletown in August 2012. Reis predicts a 22.2% vacancy rate for year-end 2012, but a subsequent turn to positive net absorption is expected to push the rate down thereafter.
Both the average asking rent and the average effective rent increased 0.2% in the second quarter to $20.94 psf and $17.04 psf. This brought the year-over-year gains to 1.0% and 0.9%, respectively. Each average rose an additional penny by August, and gains of 1.2% asking and 1.5% effective are forecast for all of 2012. Despite high vacancy, Reis predicts improving gains thereafter, with the effective average rising 2.8% in 2013, rising to an increase of 5.5% in 2016 despite a 17.8% vacancy rate expected that year.
Cushman & Wakefield reports a vacancy rate of 19.7% and an overall asking rent of $19.94 psf for 25.5 million square feet. With space abundant, most major leases are in Class A properties according to this source.