Commercial and Residential Market Analysis for the City of Norwalk, Connecticut March 2006
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COMMERCIAL AND RESIDENTIAL MARKET ANALYSIS FOR THE CITY OF NORWALK, CONNECTICUT MARCH 2006 Prepared for: City of Norwalk Redevelopment Authority 125 East Avenue Norwalk, Connecticut Prepared by: RKG Associates, Inc. Economic, Planning and Real Estate Consultants 277 Mast Road Durham, New Hampshire 03824 Tel: 603-868-5513 FAX: 603-868-6463 And 300 Montgomery Street, Suite 203 Alexandria, Virginia 22314 Tel: 703-739-0965 FAX: 703-739-0979 Economic Planning Web: www.rkg1.com and Real Estate Consultants Norwalk, Connecticut - Retail and Residential Market Analysis March 2006 TABLE OF CONTENTS I. Executive summary ..................................................................................1 A. Key Findings ............................................................................................................ 1 1. Demographics........................................................................................................................... 2 2. Retail Market............................................................................................................................ 2 3. Office Market .......................................................................................................................... 2 4. Residential Market .................................................................................................................. 3 B. Conclusions.............................................................................................................. 3 1. Retail Development Potential................................................................................................ 4 2. Residential Development Potential....................................................................................... 4 II. Demographic indicators............................................................................6 A. Demographic Conditions.......................................................................................... 6 1. Population ................................................................................................................................. 6 2. Population by Age .................................................................................................................. 6 3. Households ................................................................................................................................ 7 4. Household Income .................................................................................................................... 8 5. Race and Ethnicity ................................................................................................................... 9 6. Conclusion.................................................................................................................................. 9 B. Housing Characteristics and Trends ....................................................................... 10 1. Housing Tenure and Occupancy .........................................................................................10 2. Building Permit Trends ..........................................................................................................11 3. Conclusion................................................................................................................................11 III. Retail Market Indicators..........................................................................12 A. US Census of Retail Trade...................................................................................... 12 1. Sales.........................................................................................................................................12 2. Store Count .............................................................................................................................13 3. Sales Productivity ..................................................................................................................14 4. Comparative Market Shares...............................................................................................16 5. Conclusion................................................................................................................................16 B. Shopping Center Inventory..................................................................................... 16 1. Broker Interviews ...................................................................................................................20 2. Conclusion................................................................................................................................20 C. Consumer Demand and Sales ................................................................................ 21 1. Demand ...................................................................................................................................21 2. Sales.........................................................................................................................................22 3. Conclusion................................................................................................................................23 D. Sales Leakage and Supportable Retail ................................................................... 23 1. New Households.....................................................................................................................24 2. Conclusion................................................................................................................................24 E. Retail Inventory – Norwalk Assessor..................................................................... 25 RKG Associates, Inc. Page ii Norwalk, Connecticut - Retail and Residential Market Analysis March 2006 IV. Office Market Indicators .........................................................................27 A. Office Market Overview......................................................................................... 27 1. Norwalk...................................................................................................................................28 B. Broker Interviews ................................................................................................... 29 1. Conclusion................................................................................................................................29 V. Residential Market..................................................................................30 A. Condominium Market Indicators............................................................................ 30 1. Recently Approved or Pipeline Projects............................................................................30 2. Sales Volume..........................................................................................................................30 3. Median Values .......................................................................................................................32 4. Comparable Condominium Properties...............................................................................34 5. Conclusion................................................................................................................................40 B. Modern Rental Sector ............................................................................................. 41 1. Recently Approved or Pipeline Projects............................................................................41 2. Pricing and Availabilities .....................................................................................................41 3. Conclusion................................................................................................................................44 VI. Appendix................................................................................................45 RKG Associates, Inc. Page iii Norwalk, Connecticut - Retail and Residential Market Analysis March 2006 I. EXECUTIVE SUMMARY RKG Associates, Inc., a professional real estate and economic development consulting firm has been retained by the Norwalk Redevelopment Agency, of the City of Norwalk, Connecticut, to prepare an independent and impartial analysis of the City’s capacity to absorb additional retail, residential, and to a lesser extent, office space in terms of new properties, projects and square feet (SF) of development over the next several years. The need for such an assessment has arisen, in part, because of several proposed redevelopment initiatives and projects pending before the City. Included among these projects are two downtown, urban core projects, referred to as the West Avenue Corridor and Reed Putnam. As of the date of this research, proposed redevelopment for these downtown projects is as follows: West Avenue Corridor – proposed new development to include 400,000 SF of retail development, 75,000 SF of office space and approximately 350 residential units. Reed Putnam – proposed new development to include 215,000 SF of retail space, 500,000 SF of office space and approximately 300 residential units. This analysis reviews trends and baseline data for the City of Norwalk and surrounding regions, with respect to demographics, real estate market indicators (for retail, residential and office), and retail/consumer spending demand and sales activity. Recent and pending real estate development activity, from primary in-field analysis and from interviews with real estate brokers,