🔒CT’s largest commercial landlord upping investments in state ‘hungry’ for biz

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Last year’s sale-leaseback of JCPenney’s sprawling Manchester distribution center signaled more than an ownership change for one of New England’s largest warehouses.

The $70-million acquisition by Winstanley Enterprises, Connecticut’s largest owner of warehouses, further solidifies the Mass.-based developer’s bullish outlook on the state’s rebounding industrial real estate market.

The family run realty shop, which controls and owns more than 10 million square feet of commercial space in the state, is in the midst of investing another $45 million to upgrade the nearly 2 million-square-foot building on 163 acres to attract more e-commerce delivery companies.

“We see evidence of e-commerce companies selecting Connecticut as their long-term home because they like the location of where road systems are,” said principal Adam Winstanley. “We believe Connecticut is a great place to do business and we are going to continue to look for investment opportunities.”

Winstanley Enterprises is repositioning its Tolland Turnpike Manchester warehouse following a recent spike in its vacancy rate. JCPenney has ceded about half of its space there, shrinking its footprint to 635,000 square feet.

That move significantly impacted the region’s industrial real estate market.

National commercial broker-advisor CBRE in a recent report examining the Interstate 91 industrial corridor said JCPenney’s downsizing caused availability and vacancy rates in the area to increase from 8.2 percent and 7.7 percent, respectively, in the first quarter to 10.1 percent and 9.5 percent, respectively, in the second quarter.

But at least 1 million square feet of JCPenney’s recently vacated space will soon be occupied by an unnamed tenant planning to finalize a multi-year lease with Winstanley by October. There’s also another prospective tenant eyeing the distribution center’s remaining vacant space, Adam Winstanley said.

Tenant interest has grown as Winstanley this summer began renovations that include replacing the building’s roof, updating sprinkler systems and landscaping, and repaving the site, which has some 2,000 truck and car parking spaces.

“We’ve had good leasing activity there, and finding replacement tenants this quickly is not only a good sign for the region — the market is responding to the reinvestment we are making,” he said.

Recent activity

Winstanley — overseen by Adam, his father David, and brother Carter — has been one of Connecticut’s most aggressive realty investors in recent years with purchases or developments in Windsor, West Hartford, Hartford, Enfield and South Windsor, among other locales.

Of note, Winstanley and its redevelopment partner Eastpointe LLC began construction in Nov. 2018 on the long-delayed Great Pond mixed-use development in Windsor, which will eventually house 230 apartment units and hundreds of thousands of square feet of retail, office, senior-living and industrial space.

Adam Winstanley said Great Pond’s first four-story apartment building is about half complete and will make its debut by year-end with 50 apartments coming online. ABB Group is also a partner in redeveloping the 633-acre property.

The residential development is somewhat of an outlier project for Winstanley — about 80 percent of its Connecticut real estate holdings is dedicated to logistics space, while the remaining 20 percent is in biotechnology medical facilities, parking garages and retail space. One of its most notable retail tracks is the Plaza At Burr Corners shopping center near The Shoppes at Buckland Hills mall in Manchester, which it acquired for $22 million in 2015.

Its focus on industrial real estate is part of the reason why Winstanley in June scrapped an ambitious effort to remake a commercial building in Hartford’s Asylum Hill neighborhood into an education hub. The property at 85 Sigourney St., which has converted dormitory space opposite of Aetna’s headquarters campus, is now owned by People’s United Bank of Bridgeport.

Adam Winstanley spent more than a year shopping the eight-story, 367,406-square-foot building for a suitable tenant after Lincoln Culinary Institute closed there in late 2016. But it came up empty-handed and recently handed off the building to People’s United Bank.

“We had a tenant that needed to downsize … and we pursued some options for the building, which ultimately did not work out,” said Adam Winstanley, whose company has invested in 50 projects in Connecticut since 1994.

Why Connecticut?

For all the debate over Connecticut’s purported stifling business climate, Adam Winstanley is unabashedly bullish about the state’s prospects.

He credits several factors in justifying his past and future investments in Connecticut, and why he intends to continue focusing on industrial real estate here.

Winstanley, who said he has lured numerous distribution operators to the state, said e-commerce companies are attracted to Connecticut because of its central location in the Northeast and easy access to major highways, including Interstates 84 and 91, and Bradley International Airport in Windsor Locks.

The advent of companies like Amazon and others placing warehouses to meet demands for next-day or even same-day delivery is also increasing demand for distribution space in the state closer to where customers actually live — so truckers can fulfill that critical “last-mile” haul.

There’s also a surplus of unused land in the state and a host of municipalities “hungry for new business,” he said.

“If I come to a certain town and ask about a company coming to a building in 60 days, every community says ‘how can we help you, we will work quickly to get this company here,’ ” Adam Winstanley said. “I think that shows Connecticut is a little hungrier than other states.”

Winstanley admits lawmakers have room for improvement, especially in terms of the state’s high taxes. But the veteran developer is optimistic about Gov. Ned Lamont’s newly developed recruiting strategies and believes the state is a faithful business partner.

And if you don’t believe him, consider that half of the Concord, Mass.-based company’s staff is based in offices in Hartford, New Haven and Bristol, and that the majority of its real estate holdings are located in Connecticut.

“Connecticut has been steady, and for us, it’s been a great place to do business,” he said. “I think Connecticut gets a lot of negative press for its business taxes. They are higher and it has impacted some in Connecticut but, in general, I think the state is doing a lot to support economic activity.”