Our News
The Market for Medical Space
The commercial real estate market for medical space is quite active in Connecticut. At the end of February, Northwell Health, the largest healthcare provider in New York state, announced it would be coming into Connecticut, joining forces with Nuvance Health, based in Danbury, which operates throughout western Connecticut. This points up the increased need for medical space as healthcare organizations continue their efforts to expand community-centric care.
To answer this need, we have multiple locations that are ideal for medical tenants. These include properties available for either purchase or lease. Please contact us if you are interested in these types of properties, or if you are considering listing such a space. We have a great deal of valuable experience serving clients in the healthcare sector.
Lyman Real Estate Brokerage and Development has been active in eastern Connecticut commercial real estate for more than 30 years. If you’re interested in selling, buying, or leasing commercial property for any reason, we’d be happy to help you through the entire process. Please call, text, or email us today.
Self-Storage Continues to Be a Strong Sector
The fact is, more than one-fifth of the people in the U.S. rent storage units, and that number is expected to grow, as the huge cohort of baby boomers (age 60-78) continue to downsize. In addition, people who already rent storage units often need additional space, a more convenient location, or climate-controlled capability.
The highest value locations for self-storage facilities are next to high traffic locations—such as shopping centers and other prime retail areas—or with visibility on major corridors, such as I-95 and I-395. There’s an opportunity to command higher rents by taking advantage of the national trend for climate-controlled spaces that protect renters’ contents from mold and mildew. Many developers purchase land to build their self-storage facilities; others look for an older building to repurpose—an especially good option if it’s in a high-traffic area.
Why Student Housing Is Such an Attractive Sector
The term “student housing” covers off-campus apartments, dormitories, and purpose-built student housing (PBSH), and it’s emerged as a significant sector in the Commercial Real Estate (CRE) market. Demand for off-campus accommodations rose as colleges and universities expanded and faced budget constraints, while student populations grew. This opened up an opportunity for developers and investors to cater to this CRE segment, and take advantage of its three unique benefits:
· Predictable Demand Thanks to Consistent College Enrollments. The number of students pursuing higher educations tends to remain relatively stable year to year, especially with the influx of those coming from China and India.
· Resilience in Economic Downturns. When the economy slows, college enrollments frequently increase, since many people decide to go back to school to increase their earning power. After the 2008 economic crisis, for example, there was an uptick in college enrollments, as many pursued higher education to deal with a challenging job market. Families also tend to prioritize spending on education, even in tough times.
· Higher Returns than Other CRE Investments. Student housing frequently brings higher returns because of its unique rental structures. Typically, students rent by the bed rather than by the unit. So, a single apartment or house, divided appropriately, can generate multiple income streams. Plus, the consistent, predictable demand, mentioned earlier, makes sure occupancy rates stay high.
Dealing with Planning and Zoning.
Commercial real estate deals often require Planning and Zoning (P&Z) approval from the town in which they’re located. Every town is different in terms of how P&Z boards and residents will feel about a commercial real estate proposal. Over the years, we’ve found the following strategies give us the best shot at getting optimal results for our clients.
· Emphasize the economic and quality of life benefits. Commercial properties expand the tax base, keeping taxes low for town residents. They also enhance everyday life by having nearby more of the products and services people want. Some projects also offer special benefits, such as having affordable housing in the town for the police officers, firefighters, and teachers who serve the community. The overall message is that your commercial real estate proposal is in the best interests of the town.
· Be proactive. Let P&Z know upfront that you’re willing to abide by their requirements—such as square footage limits; architectural and landscaping standards; traffic signal updates; water and sewage requirements.
· Be willing to go above and beyond P&Z mandates. Offer to add special features to the property, such as pavers, stone walls, mature trees, and shrubs. Or suggest using part of the property for a dog park, playground, or picnic area.
· Be open-minded. Listen to suggestions from P&Z and town residents—people like to be heard. Plus, when people feel you’re listening to their ideas, they’re more open to listening to yours.
Of course, whatever P&Z requires has to pencil out over an acceptable time frame.
Senior Housing and Workforce Housing: Made for Each Other!
Senior housing and workforce housing are big opportunities today in multifamily real estate. Analysts project that senior-housing demand will be sustained for a long time, powered by baby-boomers, who make up approximately 22% of the U.S. population—an estimated 73 million people born between 1946 and 1964. Workforce housing is also in demand, as elevated home prices and interest rates have made home ownership unaffordable for many people who have been forced to remain in the rental market.
Developing workforce housing along with senior housing makes sense because both workers and seniors need affordable units. This presents an attractive development opportunity. Under Connecticut Statute 8-30g, local Planning & Zoning boards cannot deny developers approval for projects where 30% of the units are deed restricted affordable units. Workforce and senior housing also makes sense because there are workers who provide services to seniors, such as home care and house cleaning.
If you are interested in an 8-30g development, please contact us for the full details. We have solid 8-30g experience and can show you properties that would qualify.
Hot Market for Land in Census Tracts
An attractive part of the commercial real estate market today is for sellers and buyers of land in Low-Income Housing Tax Credit Qualified Census Tracts (QCTs). These are areas where 50% of the households have incomes below 60% of the Area Median Gross Income (AMGI) or the poverty rate is 25% or higher. Also of interest are Small Difficult Development Areas (DDAs) that have high land, construction, and utility costs relative to AMGI. These areas are mapped here: https://www.huduser.gov/portal/sadda/sadda_qct.html. Land in QCTs and DDAs can be advantageous for affordable multi-family developers.
Opportunity Zones also offer attractive tax incentives for industrial, as well as multi-family, developers. Projects can be either new developments or existing structures needing substantial renovation. Qualified investments include: multi-family and single-family housing, commercial, retail, industrial, and mixed-use developments. Here’s more on Connecticut Opportunity Zones: https://portal.ct.gov/DECD/Content/Community-Development/04_Incentives_LiabilityRelief/Location-Based-Incentives/Opportunity-Zones
As with all tax matters, consult with a tax professional before making any decisions.