Sustained Economic Growth Continues in the Region

Population Trends

State and federal census bureau statistics uphold what many local residents, builders and developers have known - population growth along New Haven County's east shore has increased dramatically and projections call for much of the same for the remainder of the decade.

Reasons for this growth may include: shoreline towns have always been desirable places to live with above average public school systems; the housing boom of the past five years has trended towards newer and larger homes requiring larger lots than those available in the more populous towns west and north of New Haven; and steady to rising incomes, for area professionals, combined with lower mortgage rates has increased the likelihood of affording homes in a market otherwise closed to them.

The result is that as this population has increased so has its demand for the retail, medical and professional services. Also, shoreline residents are faced with 10 years of major road and bridge work along I-95 into New Haven, creating an opportunity for a wide array of new commercial development.

Prior to the recent population boom much of the demand for services during the last 20 years had been met by local retailers, professionals and medical practitioners with primary or satellite shops and offices in the towns from East Haven through Madison. There was a market equilibrium.

With the exception of Wal-Mart in Branford, there have not been any major additions along the shore since the construction boom of the early-mid 1980's when 100's of thousand of square feet of retail, office, light industrial and flex facilities sprang up - most notably in Branford's east end where accessibility to I-95 and to town sewers (none in Guilford and Madison) was a key driving factor for developers.

Retail Rising

For generations, Connecticut's and New Haven's shoreline towns have been destinations for landlocked dwellers in the state as well as for out of state visitors traveling I-95 or U.S. Route 1 enjoying a weekend drive in the country. Many shoreline towns offer quintessential New England Greens, historic buildings and churches, but most of all they offer access to the water, public beaches, quaint shops, restaurants serving up lobster rolls, and roadside stands dishing out ice cream. In short, they offer an opportunity to spend money - a fact that has not gone unnoticed by major regional and national retailers.

Growing population and CT's steadily increasing tourism industry have caused these retailers to sit up and take notice of New Haven's once sleepy east shore towns as possible locations for their stores and outlets. Instinct tells these retailers that they should be here. Ironically however, it is this unique geographic location - on the water - that is at the same time a deterrent to the brand name shops sprouting up like mushrooms. The reason - their demographic computer formulas come up just short of the requisite population densities. As does the aggregate disposable household income that is essential for a store to hit the sales number they require to be successful.

Intuitively local developers and commercial property owners have known that their towns are "on the bubble" with breaking through and hitting those required parameters for attracting these and other prospective retail tenants. To that end many developers/owners have taken the initiative and broken ground on numerous projects. Madison's Dowler Group, LLC is one such ground breaker, undertaking several adaptive reuse and new projects from one end of their town to the other. Most ambitious of all is their Hammonasset District development of The Parkview of Madison (32,000 SF office/medical) and The Marketplace of Madison (20,000 SF retail/service) properties. The success of these properties has prompted the group to move forward on plans to construct an additional three buildings (Marketplace phase II - 2005) adding 56,000 SF of retail, restaurant, banking and residential opportunities directly across U.S. Route 1 from the recently approved 124 unit Madison Landing - an upscale residential development (Leyland Alliance, LLC) on the 42-acre Griswold Airport site.

Branford Town Square with 10,000 SF of retail/restaurant space on the main floor with apartments above - literally rising out of the ashes of the December 1999 fire that destroyed three buildings in Branford's retail district across from the Green and Town Hall - is scheduled to open early in 2005.

Demands for retail space have been high in each town's preferred buildings and locations and owners have taken heed. Asking rents in these prime locations have blossomed by as much as 30-50% in the last 24 months - prices ranging from the high teens to mid twenties per square foot net - as owners are sprucing up buildings and electing to not renew lease contracts with older tenants in favor of securing more upscale retail concepts/tenants (e.g. chick clothiers, day spas, trendy restaurants and coffee bars) - willing to pay these higher rates. This trend in the retail market segments promises to increase as demand continues to be under served by current merchants.

Medical House Calls

Doctors may not make house calls anymore but recent moves by our area's largest medical institutions suggest that hospitals do. Yale New Haven Hospital, the Hospital of St. Raphael, and Middlesex Hospital have either recently opened or are near opening new medical facilities along the shoreline.

Once again the simple formula - a lack of supply and pent up demand has led to a substantial expanded presence by each institution on the shoreline. YNHH has lead the way with the construction and recent opening of its 80,000 SF full service Shoreline Medical Center off I-95 in Guilford - complete with its own helipad for emergency flights. St. Raphael's Hospital immediately followed suit by announcing plans to consolidate several of its Branford and Guilford supported/affiliated practices under one roof in a new 24,000 SF shared medical facility at the intersection of Cedar Street and U.S. Route 1 in Branford. and MSH increased its presence by expanding its Guilford operations to 3,000 SF.

In addition to the hospitals, numerous other partnerships have arisen to meet the shoreline's medical demand - most notably Stony Creek Medical Center, LLC which is construction a 30,000 SF facility bearing its name just off I-95 at Exit 56. This private venture has targeted physicians and practices that do not have hospital ties or affiliations and that recognize the importance of grouping their practice with complimentary practices in one medical center affording them an opportunity to compete effectively with the new institutional facilities. Early leasing activity and strong interest indicate that Stony Creek Medical Center will be 75-80% leased prior to its anticipated opening early in 2005.

This transformation along New Haven county's east shore may be disconcerting to some of the long-time residents who have stout-heartedly petitioned to keep things as they were but for most of the populace these changes are a welcome addition that fosters in a new era offering a higher quality lifestyle.

H. Pearce Commercial Real Estate specializes in Connecticut’s central, south-central, and Shoreline markets, with offices in North Haven and Rocky Hill. Commercial property offerings can be found in color on the web at www.HPearceCommercial.com.