Downtown Hartford’s office market faces structural challenges that go beyond the headline market indicators. While some sources report vacancy rates around 15 percent, analysis accounting for expiring leases and other factors suggests effective Class A vacancy rates approaching 40 percent in the post-pandemic era. The Shelbourne Company, a real estate development firm with interests in Downtown Hartford, engaged ESI to quantify the economic and fiscal consequences of continued decline and to develop a strategic policy framework to support repositioning and adaptive reuse of key downtown office properties.
ESI conducted a comprehensive market assessment of Downtown Hartford’s approximately 16 million square feet of office space using CoStar data, Hartford Office of Property Assessment records, and Bureau of Labor Statistics employment data. The assessment included an analysis of property tax records from 2014 through 2024 to quantify the decline in commercial office assessed values and the resulting annual tax revenue losses for the City; an evaluation of Census employment data to assess job losses in relevant sectors from 2019 to 2022; and comparative policy research examining successful office conversion programs in Ohio, Wisconsin, California, and Massachusetts to identify applicable policy models for Hartford. These findings were translated into a set of concrete policy recommendations to improve the downtown market.
Downtown Hartford’s office market experienced a 24 percent decline in assessed value over the past decade, a loss of $368 million in value translating to a $7.6 million reduction in annual tax revenue. Class A office buildings lost 36 percent of inflation-adjusted assessed value from 2019 to 2024.
ESI recommended establishing a tax credit program for commercial-to-residential conversions, coordinating with the Capital Region Development Authority to streamline project administration, and implementing complementary local incentives such as Tax Increment Financing and targeted tax abatement programs. The analysis provided Hartford and Connecticut officials with a policy roadmap for prioritizing legislative and budgetary resources for downtown revitalization.