Shapiro notes that the market has seen some tired office buildings undergo "Manhattan-style" conversions to luxury apartments as well as several upgrades of core properties in the City of New Haven. Another significant development last year was the start of construction of the Chapel Square Mall development and a speculative office building at 1 Audubon St.

The largest and most significant deal in 2002 was the purchase of the long-vacant 183,000-sf 500 Sargent Dr. office building at the end of 2002 by IKEA Corp. That deal helped boost leasing in Downtown New Haven by 112% from December 2001 to 509,910 sf. According to Insignia/ESG figures, leasing in New Haven County rose 32% in 2002 to 851,310 sf. Officials with the brokerage firm note that while IKEA's deal was substantial and skewed the leasing numbers somewhat, without the retailer's transaction, the City of New Haven and New Haven County's leasing velocity still surpassed 2001's levels by 36% and 4%, respectively.

Another factor that helped the market in 2002 was the lack of major corporate downsizing programs. In fact, Insignia/ESG reports that only one major giveback of space, totaling 75,000 sf, occurred in the central business district of New Haven last year. Sublease space actually remained stable in the City of New Haven in 2002 and actually dropped 8% countywide from 2001. The availability rate fell almost six percentage points in the City of New Haven to 13.1% at year-end 2002 and more than two percentage points in New Haven County to 13.6%.

Insignia/ESG reports that average-asking rents in the region rose in most areas of the county last year. Due in part to the addition of newly available space at 98 Elm St., average asking rent outside of Downtown New Haven rose $1.05 per sf, or 6%, from last year to $17.68 per sf. Asking rents countywide rose 42 cents per sf to $18.47 per sf. Space in downtown New Haven commanded higher rents than the suburbs at $19.46 per sf at year's end 2002, although the rate fell six cents per sf as compared to a year earlier, the firm reports.