Stratford – Many business owners see Stratford as a business-friendly city.
It’s one of the most affordable communities in Fairfield County, which benefits the city, according to Director of Economic Development Mary Dean. Stratford also has access to transportation, with the train station in the city center and easy access to Interstate 95.
However, one barrier to local business entry is the limited stock of commercial real estate available, some say.
Dean said the town has taken some steps to mitigate this. They recently asked the zoning commission to impose a ban on new self-storage facilities, which occupy large spaces with limited parking making it difficult to recycle the property for other uses in the future, she said.
Aside from town-owned property and regulatory measures such as a required moratorium, she said, there’s not much the town can do to increase this stock.
“If it’s not town-owned, we can just work with the various landlords and estate agents to try and make sure we’re on top of any new opportunities or opportunities that are available for businesses interested in getting into Stratford,” Dean said. .
Inventory for certain segments of the commercial market is limited in the city, said Steve Hodson, president of Hodson Realty. Specifically, there is a shortage of industrial warehouses and small retail spaces. He said the office space market, though, is where there is the most availability since the way the workforce conducts business has fundamentally changed during the pandemic.
This lack of supplies, he said, may prompt people to look for other places nearby if what they are looking for is not available.
“It’s always supply and demand in economics,” Hudson said. “If there is less exposure and more people looking for smaller spaces, and that becomes a challenge, they might expand their search and look at other communities.”
Hodson said there hasn’t been a lot of new construction in Stratford, as “there is really no noticeable vacant land” in the city. He said most of the town’s land is already “built up”.
He said one of the ways developers have started to increase this inventory is through mixed-use development. A popular option across the region is to add commercial space on the ground floor of an apartment complex. He said the complex at 382 Ferry Boulevard is one example, where initial concepts included a mix of 119 apartments and retail space.
John Angel, president of Angel Commercial in Southport, said the current market is strong due in large part to the “abnormally low inventory of available buildings” across the region.
“I’ve been in business locally for over 32 years, and I’ll tell you that throughout my time running business in these areas, I’ve never felt as lacking in availability as now,” Angel said.
Engel said the barrier to entering new business “has risen dramatically” over the past two years.
The demand for e-commerce has increased during the pandemic period. The US Census Bureau estimates that online retail sales totaled more than $870 billion in 2021, an increase of 14.2 percent over sales in 2020.
Thus, warehouses and distribution centers appeared in areas of need, including in neighboring municipalities. Among other things, in the past two years, Amazon bought a warehouse in Trumbull in 2020 and a developer purchased a 14-acre plot of land in Stratford to build on in February. Noting the strength of demand in the area, Angel, who brokered the 14-acre land deal, said it was entirely based on speculation.
Preliminary anecdotal data suggests warehouse prices are up more than 40 percent year-over-year, according to Alexander van de Meen, a real estate professor who studies commercial prices at the University of Connecticut. He said the best data for the past two years has yet to emerge, and most of it is proprietary. He said his department is raising funds to improve access to market data.
Van De Minne said the retail market has been fragmented, with larger retail settings such as malls and strip malls suffering while “street retail” is improving in the state.
“We’ve seen people move from cities to Connecticut in particular, or also all the way to Hartford even never before,” Van de Meen said. “And local street retail, especially restaurants, etc., have really benefited from it.”
Small offices in the suburbs have moved in-state, too, he said, as some didn’t want to go back to their Manhattan commute.
“There is some logic that there should be some growth, because a lot of workers are staying home and don’t want to move to Manhattan every day,” Van de Meen said. “So we might think that there is a greater demand, and there is some anecdotal evidence, for the local suburban offices that are closer to where people live.”
The future of the real estate market is a bit ambiguous as the Federal Reserve starts raising the Federal Reserve. Van de Meen said the impact on the market is not entirely clear, given that real estate investors usually look to the future.
