Rental market slowdown has partners questioning
if downtown can support more housing
October 16, 2006
By MATTHEW L. BROWN, Hartford Business Journal Writer
One of the biggest boosters for housing in downtown Hartford may have concluded that the area now has all the housing it can handle.
But maybe not all the guest rooms it needs.
According to city officials, the Connecticut Housing Finance Authority and its Trumbull Centre partner, developer Martin J. Kenny, are abandoning plans to convert 111 Pearl Street to apartments in favor of a plan to build a small hotel there.
Hartford Mayor Eddie A. Perez said last week he was “very enthusiastic” about Kenny’s hotel plan.
“It’s a great reuse for that building…His partners know what they’re doing.” Perez said. Kenny’s project “adds a hotel option” to an area surrounded by housing.
Kenny and CHFA partnered to build the Trumbull on the Park apartment building, which opened this past summer. CHFA bought 111 Pearl Street from the city in February 2004, when the city was feverishly pushing the development of downtown rental housing.
CHFA also partnered with Kenny to redevelop 111 Pearl Street as apartments.
As part of its sale agreement with the city, CHFA agreed to set to work on 111 Pearl without delay.
But nearly three years later, the building sits vacant and untouched, a young, but neglected eyesore in the heart of downtown Hartford.
Too Much Inventory
Bruce Perry is CHFA’s vice president of multifamily housing, and he also runs Trumbull Centre-CHFA Inc., manager of 111 Pearl Street Associates. He said as massive housing developments like the 262-apartment Hartford 21 tower were being built, questions about how much housing the city could bear couldn’t be ignored.
“There was really an issue about, ‘should Pearl Street also be housing or should it be something different? Has [Hartford] got plenty of housing?’ ” Perry said.
He said development of 111 Pearl Street is “in a holding pattern at the moment.”
John Palmieri, city director of development services, said Kenny “has an exciting proposal that he is putting in front of investors. Marty has been in to see the mayor, and the mayor expressed his support.”
Kenny did not return calls as of press time.
Palmieri also noted it’s been three months since Kenny first discussed his plan with the city.
People familiar with the proposal said it calls for a European-style small hotel with 70 rooms and suites. Perez said Kenny’s hotel would be a small, “extended stay” hotel.
Perry said CHFA and Kenny are asking themselves, “what opportunity is there for 111 Pearl Street? Nothing is being considered right now, but more retail? Is that good right now? It’s all sort-of in the offing. Is it the time to put more residential on the market before we get a handle on absorption?”
Kenny, however, may already know what’s happening to absorption. In August, he and other downtown landlords say they saw a dramatic decline in the number of rental inquiries.
“August was a slow month for us, slower than I’m used to seeing, but I wouldn’t say it was dead,” said Tina Bisson, property manager for the Trumbull on the Park development.
Bisson said she chalks up the slowdown to Hartford’s peculiar real estate cycle, and the fact that hundreds of city apartments, including Trumbull on the Park and the Colt Gateway became available almost simultaneously.
In early summer, that was the nightmare scenario for Rebekah MacFarlane, senior director of business management for Homes for America Holdings, which owns the Colt property.
In June she and Kenny said it was better that not all the city’s new apartments were becoming available all at once.
But while those apartments didn’t all open on the same day, they did all open during the slowest part of the year for landlords.
“I wouldn’t say [August] was a tough month, but we all came on line at once,” Bisson said. “It’s not just 55 on the Park anymore.” Hartford 21 opened to renters in September, Trumbull on the Park opened in June and the Colt Gateway apartments on the city’s east side opened over the summer as well.
Bisson said the 100 apartments between the Trumbull on the Park tower and the Lewis Street apartments are 83 percent occupied.
“The busiest time for Hartford is now, and it’ll slow down again in January,” Bisson said. She said property owners should expect slow Augusts in Hartford.
She and other city property owners said the more employees being brought into Hartford by insurance and financial companies as well as the likely development of a grocery store downtown all bode well for the future of the city’s rental market.