Thought
Amazon and Windsor speaking again.
Just in case you didn’t think they were speaking any longer…they are! Yes, Amazon is reportedly STILL under contract and still speaking with the Town of Windsor about plans to develop a new 1.5 million square foot distribution center just off of Day Hill Road. Apparently “rumors of Amazon not being interested in the town have been greatly exaggerated”.
See attached Hartford Courant article: Amazon and Windsor Back in Talks
CERC Sitefinder Event
I had the opportunity to attend the Connecticut Economic Resource Center’s Showcase event yesterday. It was held at the Northeast Utilities Berlin CT headquarters. A nice event attended by approximately 100 people in the real estate industry. The panelists for the event were Daniel Esty, Commissioner of DEEP, Catherine Smith, Commissioner of DECD and Jim Redeker, Commissioner of DOT. All three Commissioners gave a well thought, detailed account of what they are doing and the progress being made here in CT. And yes, there is progress being made here in CT! The question is…is it enough?
While it is clear that all three Commissioners are hard at work and indeed making progress, it is also clear that their efforts need to show increasing results in the coming years. No, the coming months. CT is getting impatient. Yes we’re growing…but very, very slowly. A recent report shows that CT not only lags behind the rest of the country in job creation, unemployment and economic growth, but it also lags behind its own New England states (see attached report below)…not a good thing.
So, while a lot of ground work has been done through the efforts of our Commissioners and their staffs, the fact remains (paraphrasing James Carville) “it’s the economy stupid”. And if we don’t start seeing more results on the street, I am afraid the efforts might be for naught.
Hartford Business Journal: CT Lags, but not the worst
Keep smiling!
Mark
Warehouse Markets Improve
Upbeat report from CoStar this past week. Coming off a strong finish in 2012, warehouse markets throughout the country have continued to improve at the beginning of 2013. 43 of the 54 markets in the US posted positive absorption. Even the weaker markets only had a combined 3.4 million sf of negative absorption.
Vacancy rates are down, rents are up and new construction is up. All good signs for a reasonably robust 2013!
See attached CoStar Group report: Warehouse Demand Strong
Gun Law Fallout
Whether you’re for or against the new gun control laws in the State of CT it is clear there will be financial fallout. Bristol CT based PTR Industries has just announced plans to relocate its operations elsewhere. Where is elsewhere? Well, they don’t know. They’re just saying anywhere but CT. That means 50 employees leaving the state (at a time when the state can’t afford the loss of 50 jobs).
Don’t believe for one minute this is the first fallout over the new laws…or the last. We know of at least two other manufacturers that haven’t expanded operations in CT in the last couple of months due to the uneasy political climate in CT. In fact, these companies are now thinking of reducing operations instead.
See attached Hartford Courant article: PTR Exiting CT
Keep smiling!
Mark
If you’re not moving forward you’re moving backwards.
It’s a pretty old saying but it’s true. Status quo is not a good thing and unfortunately our industrial markets are just that…stuck in cruise control! Why? The market needs to grow and they’re not growing! Yes, companies are moving and expanding here and there. Even better, there are numerous examples of companies expanding their existing facilities here in Connecticut.
But when it comes to real expansion, unfortunately we continue to struggle to convince out of state manufacturers to relocate or expand to our region. So while we continue to see internal growth we also continue to lose at the game of external growth. That means more of the same for the foreseeable future.
But again, if you’re not moving forward, you’re moving backwards.
Keep smiling!
Mark
Who says the condo market is soft?
OK, something a little off-beat today. Catching up on my Wall Street Journals and I saw this article on the Miami condo market. Specifically a loan made in the market for new construction (yes, new construction!). Not only new construction but new high rise condo spec construction! And the units being built? Prices start at $7.75 million!
So much for the recession!
Miami Condo Loan Marks Milestone
Keep smiling!
Mark
SIOR CT releases Q3 and Q4 2012 Survey
The Connecticut Chapter of the Society of Industrial and Office Realtors (SIOR) recently released its Q3 & Q4 2012 market survey. Overall the survey shows a slight positive outlook for 2013 although most members believe the positive year will not result in significant changes in lease rates, pricing or new construction. OF NOTE…an impressive list of transactions completed in the last half of 2012 by SIOR CT members.
Take a look and let me know if you have any questions.
Market Survey: CT/Western MA Chapter Market Survey
Keep Smiling!
Mark
Peter
Yesterday hundreds of Peter Gutterman’s family, friends, colleagues and business associates participated in the services and Shiva for Peter. Yesterday was a difficult day for all but it was also a wonderful confirmation of what we already knew. Peter was loved by many, many people. The speeches at the services and the many conversations that occurred at and after the services also confirmed what we already knew…in a world that is increasingly difficult to navigate, Peter remained true to his core values…he was a beautiful, giving, strong and unbelievably nice man.
And while we will always have a hole in our hearts and lives because of the loss of Peter, one thing I think we all need to take away from the day is what the Rabi said at the end of the day (and I’m paraphrasing)…we should all spend more time focused on how to live our lives than we do worrying about how our lives will end. Peter did that. And in doing so, he left all of us so much better for it. Yes, Peter’s legacy will live…because it lives in each and every one of us that he touched.
I’ll miss you Pete…but thank you so much for everything you have given me. We’ll all miss you Pete, but thank you so much for what you have given all of us.
Yes, nice guys do finish first.
Mark
In memory of Peter Gutterman.
In late May last year my partner and friend Peter Gutterman learned he had pancreatic cancer. The news was devastating, to Peter and to everyone who knew Peter. Unfortunately many of us learned this morning that Peter passed away after his seven month battle with the horrible disease. Peter leaves behind his wife Roz, daughter Nancy, son Andrew, his daughter in-law and his grandchildren. Peter also leaves behind a ton of people who loved him.
I find it very easy to write (and comment) on just about any news and subject. But, not surprisingly, it is very difficult to come up with the right words for Pete and the effect that he has had on all of us.
Selling mortgages straight out of college in 1983 one of the first sales calls I ever made was at Sentry Real Estate in East Hartford CT. It was a bustling, successful office. But beyond the obvious success, what I was most impressed with was just how nice all of the people were in the office. I quickly learned why. At the top of the stairs was the leader of the company, Peter Gutterman. A man with a smile and a warmth that made me immediately feel comfortable. Peter was already a legend by then but he had time and interest to talk and lend a helping hand to anyone…even me. The people in his company (all six of his offices) were simply a reflection of Peter’s values.
8 years later Peter and I became partners in Sentry Commercial. And while I learned a ton more about Peter and the secret of Peter’s success, the one thing I learned most was that Peter’s success wasn’t as much as what Peter did but more so in who Peter was. What was Peter’s secret? Peter was loved by everyone…because Peter loved everyone. Peter had time for everyone. Peter was interested in everyone. Peter was interested in you.
What is Peter’s legacy? His real estate companies? His real estate school? No, Peter’s legacy, beyond his family and friends, to me, is this. In a world that values efficiencies, productivity and technology, Peter never changed what he valued most…people and his relationships with people. Whether you were a conservative or liberal…a competitor or an employee…Peter had a kind word for you and Peter had time for you. He had time to lend you a helping hand. Time to give you advice. He had a smile, a handshake and a hug. Peter had time. No, Peter took the time.
I will miss you Pete. We will all miss you Pete. It was a great run. Nonetheless, a run that ended far too soon.
Mark
Positive Absorption in Greater Hartford
CoStar recently released its Q2 2012 industrial market results for Greater Hartford CT. Good news! Positive absorption (that means more space came OFF the market than went ON the market)! 1 million square feet of positive absorption! While I think one can challenge the actual number, no one can challenge the claim of positive absorption. More good news for a market that started to rebound a bit earlier this year.
See attached CoStar article: Positive Absorption Q2 2012
Keep smiling and Happy Thanksgiving!
Mark
Raise the Roof!
Not something that is done every day but in certain cases it might make sense. That is…raising the roof of your industrial building. If your building is well located but has low ceiling height think about the possibility of doing a “roof raise”. Cost runs from $15 psf to $30 psf but the total cost might pale in comparison to the increased value of the asset.
Attached is an article in the Commercial Record in which I was interviewed. Take a look. If you have further interest, call me and I can give you numbers to call.
Raise the Roof – Commercial Record Article
Keep smiling! (and Happy Thanksgiving!)
Mark
Say it isn’t so…New England rated as inexpensive.
OK, maybe not inexpensive as compared to all of the country…but this report by Deloitte shows us that lower Pioneer Valley MA and southeastern CT are more competitive regions than many parts of southern US! These areas might even be a better alternative for those Boston MA based companies looking for less expensive alternatives.
See attached Deloitte report: New England Can Be Inexpensive
Mixed Messages
Just when everyone thought the market was turning around, along comes the most recent unemployment rate in CT. 9%! Ouch! Yes, that is .9% WORSE than the national rate of 8.1%.
So, do you still think we are headed back? Well, if you look at the number of transactions in the last 60 days and the volume of activity in the same period, it would appear that the industrial re markets certainly look like they are taking a turn for the better. Not only the medium and small markets, but the big deal market too (Advance Auto/Enfield, Subway/Milford, WinWholesale/Middletown, Dollar Tree/Windsor)! Showing and contract activity has increased in the last few weeks as well, leading one to believe that the brokerage firms should have a healthy Q3 and Q4. That said enthusiasm is tempered by recent plant closings. We lost 6,800 jobs in CT this past month alone! These include just two in the last week…Finlay/Bloomfield, Unilever/Clinton. So while the increased market activity is great for transactional volume, it might not help in the appreciation side of the business.
At some point we need to stop the “win one, lose one” cycle. Thought that had stopped last year but looks like we are at risk of being on the cusp of another cycle of it.
Keep smiling!
Mark
The challenges of commercial re brokerage!
A little on the light side! A pic of a little critter we needed to deal with on a recent showing. And you thought brokerage was easy!
Keep smiling!
Mark
Lots of incentives to locate to Bradley International region!
In case you missed it…big happenings in the Bradley International Airport region lately! Expansion of the Foreign Trade Zone and the creation of the Bradley Airport Development Zone. The expansion of the FTZ to Griffin Land’s New England Tradeport gives companies doing business internationally additional options for places to do business and take advantage of the FTZ benefits. The Bradley Airport Development Zone provides manufacturers incentives to grow in the areas that the BADZ affects. Companies have already taken advantage of these benefits. NuFern has expanded its facility by 30,000 square feet and Dollar Tree has purchased land to build a 1.0 million square foot distribution center.
Learn more about both zones. See related information below.
Bradley Airport Development Zone
Keep Smiling!
Mark
Manufacturing continues rebound in US.
A lot of news recently about the rebound in manufacturing in the US. More specifically US companies bringing their manufacturing BACK to US plants. There are a number of factors that cause this…Value of the dollar, productivity, cost of utilities etc. Well, based on the article below, the good news is the majority of manufacturers believe this trend will continue into the foreseeable future. That’s great news for the US. And while the northeast region will be a benefactor of this…it won’t be THE benefactor. Unfortunately we are still on the high side of the cost spectrum and “right to work” states will benefit more.
CoStar Article: Re-Shoring: More Manufacturing Expected To Return to US
Keep smiling!
Mark
New Accounting Decision Delayed to 2013
For at least two years there has been a lot of concern in the commercial real estate world about coming changes to the accounting standards in the US. A switch to Global Standards potentially meant a change in the way many US companies will need to handle leases on their balance sheets. The projected change was expected to be in 2013. Well, it looks like not even a decision will be made until 2013 with the actual changes not being effective for a couple years thereafter.
See attached Wall Street Journal Article: Delays in Accounting Changes
Keep smiling!
Mark
Knowledge Corridor Event
Hats off to the folks at the Hartford-Springfield Economic Partnership for a great event this past week. I attended the Knowledge Corridor event held at the Holiday Inn in Enfield CT. The Knowledge Corridor is essentially the area that goes up and down Interstate 91, through Western MA and northern CT. The marketing of this area as one region (versus two regions/states) is a great concept and an effort that will certainly pay off in the long run (if it hasn’t already). The event was a nice mix of local and state figures.
That said; while it was refreshing to listen to DECD Commissioner Catherine Smith speak (relatively) specifically about the region and its accomplishments AND challenges, it was equally disheartening to listen to MA Secretary of Housing and Urban Development, Gregory Bialecki speak in such broad terms about the same. While Mr. Bialecki talked about the region and projected 2-2.5% growth rates I couldn’t help but think to myself, does he understand that Western Massachusetts has one of the highest unemployment rates in the region. The rate in Springfield? 10.1%!! Holyoke? 9.35! The vast majority of towns in Western MA are at or above the State of MA rate of 6.4%. Does he understand that Western Massachusetts has one of the highest industrial vacancy rates in the region? There are presently more than two dozen buildings over 100,000 sf available in Western MA!
I get increasingly bothered by “political speak”. You know, those political responses to questions that either don’t answer the question or answers them in such broad terms that, again, it really doesn’t answer the question. Western MA has always been the poor step child to its eastern brethren. It’s time that the state stops talking a good game about the region and instead offers solutions. Canned responses can not be accepted. Only solutions. Solutions that can be proven by the numbers. At this point the numbers show there haven’t been many solutions…only a lot of “political speak”.
See attached MassLive article
Keep smiling!
Mark
Duclos/Hartford Business Journal
Industrial Real Estate Looking Up – OK, a couple of quotes in an HBJ article – Not sure the headlines entirely reflect the sentiment of the article but…
Keep smiling!
Mark
SIOR World Conference
Fresh back from the SIOR World Conference at South Beach in Miami. Well, I haven’t been to South Beach in 10 years and I am happy to report that South Beach is still every bit South Beach! BUT, that’s not what I wanted to tell you!
Overall word from people attending the conference is generally upbeat! Most markets continue to improve AND maybe even the unthinkable…space shortages beginning to appear in select markets! Say it ain’t so! Lease rates firming and even increasing, although sale prices on vacant properties (for the most part), while stabilized, not showing significant increases.
Interesting enough, this pretty much sums up the Connecticut and Western Massachusetts region (although Western MA still showing significant weakness in the leasing market). Q2 2012 showing some positive signs but only after a very choppy Q1.
Keep smiling!
Mark