The entire state of Connecticut has long been thought of as bedroom community to New York City, and in lot of ways, that still holds true. The Connecticut economy is tightly linked with that of NYC, and the same holds true for its real estate market. The most obvious consequence of this is that, though real estate across the state is expensive, the commercial and residential real estate closest to New York is the most expensive. Indeed, prices in this area are second only to those in California's poshest areas.

Connecticut's real estate, like that in New York City, is almost completely developed, so investors or buyers in the Connecticut commercial real estate market will likely be looking at existing development. One way to break into this expensive market is through foreclosure. During the boom, businesses and individuals eager to move onto to any Connecticut real estate, bought or leased more than they could afford. Foreclosures are up in Connecticut in both the commercial and residential arenas, providing a window of opportunity into the Connecticut market.

Another way businesses are getting into prime urban real estate is with flex use. In the last few quarters, demand for flex industrial/office space has been growing, helping drag the sector out of the doldrums it fell into in the wake of 9/11. Experts attribute the demand to the changing nature of the American economy - transitioning from an industrial/manufacturing economy to a service/knowledge-based economy. Most of the takers of flex space are tech companies who have no manufacturing or very light manufacturing, packaging software or manufacturing electronic components on a very small scale.

Perhaps the cheapest way to get into Connecticut's commercial market is through its Urban Enterprise Zones and Enterprise Corridor Zones. These zones exist in depressed industrial areas such as Hartford, and are intended to encourage redevelopment and new residential and commercial development. Developers within the zones are given tax breaks and other incentives such as utility discounts.

In terms of pure office space, vacancies are low and steady across the board. If you're looking to enter the market, there's a little bit of dynamism in the New Haven, which is sort of a secondary market to Boston, Stamford or Hartford. Lessees and buyers in this market tend to be young businesses just beyond the start up phase and satellite offices of larger established businesses.

A relatively new and dynamic sector of the Connecticut market is vacation property - not just second homes but resorts built to accommodate Connecticut's tribal casinos. Unlike Indian casinos out West, Connecticut's casinos are more open to outside development. This is partially because the casinos don't sit on acres and acres and acres of sovereign tribal land. Development surrounding casinos includes hotels, resorts and theme parks.