When it comes to warehousing and logistics, what is the allure of Connecticut?
Three words describe what is motivating commercial buyers: “Compressed delivery times,” according to Adam Winstanley, principal at Winstanley Enterprises, a developer with a construction division based in New Haven.
Less time from Point A to Point B is now how we shop and transfer goods from business to business — a practice that shows no signs of stopping. Connecticut’s available land, main transit routes like I-84 and I-91 and existing infrastructure are ready and waiting.
“That’s the impetus driving the market,” he said of our new demands of faster delivery. “Whatever company you can think of requires a presence now in New England,” he said, with Connecticut central to that, with significant highway systems.
“Connecticut is really servicing Metro Boston, but also Western Massachusetts, Vermont, New Hampshire and Rhode Island,” said Winstanley, making the area a linchpin in logistics.
Tenants’ choice
The use of industrial space doesn’t encompass only one sector of the market, either, said Tim Lescalleet, executive vice president of Bloomfield-based INDUS Realty Trust Inc. Warehouse leasing activity is for both B2B and B2C uses, across industries, said Lescalleet, in various situations.
“Users are coming in and consolidating what they have already in the region. Or it can be a case where they are not in this market yet and new to the area. Then you have other distributors that are upgrading, or reconfiguring logistical patterns of their company,” he said.
Lescalleet said B2C eCommerce companies have more of a driving need to locate closer to their customer base.
“A tire manufacturer or distributor can still get to a UPS air facility as late as 3:30 in the afternoon and get its products out next day. But an eCommerce company that wants to do same-day or overnight delivery may need to have multiple locations closer to the metro areas it is serving,” he said. “It all depends on the use.”
Lescalleet said INDUS — which traces its corporate roots in Connecticut back to the 1900s — has seen the types of companies interested in Connecticut evolving, a sign of growth. Beyond just companies interested in industrial space for warehousing are advanced manufacturers and biopharmaceutical companies, for example, as well as food distribution.
“It’s not just one sector,” said Lescalleet. “Amazon is tilting it, but there is other activity, too. This generates other growth and there is diversification in tenant demand. There is growth occurring.”
This diversity is alive and well.
Mixing it up
INDUS sold a Bloomfield office building within its 600-acre Griffin Center business park in January to a plastic injection mold manufacturer, for example, for $1.4 million.
Meanwhile, Amazon’s last-mile delivery station at 100 Helmsford Way in Windsor, a 169,500-square-foot facility leased by Winstanley, is 80% complete, said Winstanley.
He said the firm’s largest Connecticut project, purchased in the summer of 2018, is the former J.C. Penney warehouse, which has been redeveloped into a multi-tenant distribution center. J.C. Penney will remain in 600,000 square feet of the 1.95-million-square-foot campus, with Amazon and Ahold Delhaize — the parent company of Stop & Shop and Hannaford — also leasing space.
Lescalleet and Winstanley agree Connecticut’s land supply and labor pool, especially for non-warehousing uses, isn’t infinite, however, and will require strategy moving forward.
“Connecticut’s on the radar,” said Winstanley. “We’re in busy times right now.”
