Commercial real estate stalled in state
Commercial real estate activity in Connecticut has been "relatively lackluster" in the fourth quarter of this year, though conditions are a bit better than they were a year ago, according to a statewide survey released Friday.
The report, prepared by the Connecticut Business & Industry Association in conjunction with the Connecticut Economic Resource Center and DataCore Partners LLC, cited "a slowdown in the overall economic recovery" for an "underlying sense of uncertainty" among investors in commercial real estate. The effects of Hurricane Sandy on real estate activity were minimal, the report said.
"Connecticut's commercial real estate sector is hanging in there against a backdrop of consumer fundamentals that leave much to be desired," said Don Klepper-Smith, chief economist of DataCore Partners and former chairman of the Governor's Council of Economic Advisors under Gov. M. Jodi Rell, in a statement.
The economic problems include disappointing jobs figures that have seen labor declines totaling 2,800 year-over-year, as well as a rising unemployment rate that fell just slightly last month to 8.8 percent statewide.
The McGladrey Commercial Real Estate Index showed statewide activity slowing in the fourth quarter, with a reading of 14.9 compared with 16.3 in the third quarter. But the index showed that there was significantly more activity during this year's last quarter than in the same period last year.
The index works on a 100-point scale in which 50 shows an average performance.
Looking at individual commercial real estate segments, the report showed that retail is on the mend and investment properties are starting to gain favor again, but the industrial and office markets are struggling.
Overall, though, there appears to be hope for the future. While only 25 percent of respondents said current conditions are "good" or "excellent," 58 percent of those in the investment sector expect the number of transactions to increase in the next quarter. And 63 percent expected sales prices to climb.
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