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Back from the Abyss
Hotchkiss head Guerney
says the rising demand for downtown space may not yet be measurable, but it's ‘making people feel better'
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Business New Haven
2/23/1998
By: Kirah Ramage
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Raymond Guerney is president of the William Hotchkiss Co., a real estate sales and property management firm headquartered in downtown New Haven. Guerney is a founding member of the New Haven downtown Real Estate Brokers Committee.
What type of the properties do you manage or lease?
We manage residential, retail and office properties downtown. We manage the New Haven Savings Bank Building at 195 Church Street, and 284 Orange Street, a residential property. We also manage the Malley property at the corner of Temple and Chapel [including retail properties owned by the Malley family].
What is the status of the retail market in downtown New Haven?
There is a lot more activity, especially the area around the Omni Hotel. We've had a lot of calls in reference to the Malleys' property, including existing tenants looking to extend their leases. There is more activity generally throughout downtown.
What is the price range for retail property downtown?
You have to look at each individual property. But it is somewhere around $17 per square foot depending on what the tenant has to do with improvements. And that goes down a bit and up a little depending on what type of store and the location.
How about residential properties?
What we do at 284 Orange Street is 100-percent occupied, and our other residential property is 80 to 90-percent. Two-bedroom apartments are more in demand than one bedroom.
How do you think the market would react to the SNET headquarters building at 227 Church going residential?
It depends on what type of apartments they put in. Upscale-type apartments might hold some attraction. It really has to do with how they market it, what size they are and amenities. The downtown apartment market is pretty firm; it would depend on how many apartments come on line in what period of time. I would rather see an office building use.
Why?
If you can rent the office space and fill it up, you have more people in a building then if it were apartments. More people that can go shopping, or eat lunch, and get out into the marketplace. The apartments will probably be a viable investment and will be occupied over a reasonable period of time, but I don't think it would be as good for downtown.
Downtown New Haven still has a very high vacancy rate in office space. Is that changing?
It's changed to a certain extent. There is more interest; we have had some large users looking and deals haven't been cut yet. There are a lot of small tenants in the 1,500- to 4,000-square-foot range looking downtown. That's a viable market for absorption. However, it takes a lot of those tenants to absorb the space unoccupied.
Do you foresee a tight downtown market in the next 24 months?
Your first-class office space probably will get to that point along the Green in the high-rise type buildings. Some of which have some vacancy but have been reduced from where they were. That could happen. I'm not sure Class B or C buildings will be relieved.
What is the price range of Class A office space?
From $17 to $28 per square foot.
Will the current garage renovations impact properties vacancies?
They'll have an impact. At one point there was talk of building a garage on Elm Street. That would be terrific for the buildings in that area.
Have Real Estate Investment Trusts discovered this market?
I've seen certain investors coming out of New York look at certain properties. They're looking at the larger buildings that might be in excess of $5 million. There is a real interest in looking at the New Haven area for viable real estate projects. Overall there is a much more upbeat attitude to what is taking place. Whether that has come down to statistical improvements of any great magnitudes, I'm really not sure. But it makes people feel better. BNH
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