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More Connecticut Tenants Becoming Landlords

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Article by Jim Cronin (Commercial Record Staff Writer)

Low interest rates and cheaper financing are perpetuating a trend of tenants becoming landlords by purchasing the properties they have been renting.

The owners of North Haven-based Executive Landscaping are purchasing the building the business has occupied for about $945,000, or $35 a square-foot, according to information from Colliers International in Hartford.

Executive Landscaping had rented the 27,000-square-foot Nettleton Street property for the last two years, but with interest rates low, in the long run the company will save money on rent, said Nicholas Morizio, president of Colliers’ Hartford office.

A second transaction of note was a 9,100-square-foot lease deal with Maine Oxy, a Maine-based welding materials supplier. The company has offices in Maine, Massachusetts and New Hampshire, and this is the first in the Nutmeg State.

"Connecticut is still the richest state in the union," Morizio said. "It’s still viable for businesses. The industrial market has been very stable. There’s not a lot of activity, but it hasn’t gone crazy up or down … in Hartford County or the state in general. Fairfield County is the exception … because it goes up and down with the New York City market. It’s not as vibrant as it could or should be. Everyone just has a negative attitude, but deals still need to get done. People are adding space or cutting back."

That negative attitude comes from the fact that Connecticut’s overall leasing market has been relatively flat for the last year or so. Colliers International handled only 74,888 square feet of industrial, office and retail space in July, showing that even in as flat a market as Connecticut’s commercial real estate has been in the last year or so, deals will still occur.

"It’s been a quiet year," Shawn McMahon, executive vice president for Jones Lang LaSalle in Hartford, told The Commercial Record. "Many office tenants have already taken advantage of soft market conditions. Landlords are still very aggressive. There’s not much lower we can go in terms of pricing. Tenants can get up to a year of free rent, depending on the deal.

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