A group of real estate investors that recently paid $13 million for a nearly 188,000-square-foot Windsor manufacturing facility said they were attracted to the property by its longtime industrial tenant and the potential to develop unused land on the nearly 30-acre site.
The property at 600 Day Hill Road was sold by Delaware-registered Industrial Lease II PropCo LLC, which paid $10.43 million for it in January 2018, according to Windsor property records.
The 187,992-square-foot building, constructed in 1975, is fully occupied by Windsor-based Spencer Turbine Co., a manufacturer of industrial blowers, vacuum systems and gas-pressure boosters used in industrial processes and wastewater treatment.
The new ownership group includes entities tied to Weehawken, New Jersey-based Devli Real Estate; New York City-based Regal Ventures; industrial investor Snowball Developments; Florida investors Joseph and Sharon Anderson; and Samer Batraki, according to land and business records.
The largest interest — 52.51% — is held by an LLC whose principals are Christopher and Mark Devli. An entity affiliated with Regal holds a 20.2% stake, while a Massachusetts-registered LLC whose principals are Joseph and Sharon Anderson, of Palm Beach Gardens, Florida, holds 21.04%.
An LLC controlled by Batraki holds 3.27%. Another, operated by Snowball, holds the remaining 2.98%.
The buyers financed a portion of the acquisition with an $8.9 million mortgage from Morristown, New Jersey-based Valley National Bank, according to land records.
The property’s tenant, Spencer, has about nine years remaining on an absolute-net lease, which means the tenant is responsible for property upkeep, including structural repairs, according to Snowball President Brian Ker and David Lawrence, Regal’s director of acquisitions.
Lawrence and Ker said the combination of reliable income from a longtime tenant and the potential to eventually develop excess land made the property particularly attractive.
“This is a very large parcel and that aligns with our vision of acquiring functional industrial buildings on very large parcels where there’s a lot of excess underutilized land,” Ker said.
Ker estimates roughly 40% of the 29.69-acre property is excess land. Regal has already worked with an architect on potential development scenarios for the site, and Lawrence said the firm’s primary focus would be industrial development.
Ker noted that underused properties and excess land along the Day Hill Road corridor have been redeveloped in recent years.
“We believe that over time, there will be an opportunity to monetize the excess land at this property,” Ker said.
The existing building also offers the potential for higher rental income.
Lawrence said the tenant provides steady cash flow, but its rent is somewhat below current market rates. Ker and Lawrence believe Spencer is likely to remain for the long term because of the specialized equipment and other investments it has made in the Windsor facility.
“They’ve got a long-term lease. It’s secured,” Ker said. “And it’s a mission critical facility for them. To restart this somewhere else would be an extraordinary expense.”
Snowball has acquired a series of older industrial properties in Connecticut over the past few years, often targeting sites with excess land that could be developed. Its relatively small ownership stake in the Windsor property does not fully reflect its role in the acquisition, Ker said.
Snowball had independently bid on 600 Day Hill Road when it was initially marketed but lost out to another group. It later joined the deal after a mutual contact from Columbia University’s real estate program introduced Ker to Regal, which had already performed substantial due diligence and developed plans to increase the property’s value.
Ker said Snowball viewed the acquisition as an opportunity to expand its holdings in the Windsor industrial market and pursue development on the site over the longer term. Snowball also brought some of its existing investors into the deal.
“For us, this is another great acquisition in the Windsor market,” Ker said.
The acquisition marks Regal’s first industrial investment in Connecticut, Lawrence said.
Regal was formed in 2019 out of a family office that had been investing in New York real estate for more than 40 years, Lawrence said.
The company has historically focused on retail properties but has more recently expanded its industrial holdings, with investments in Bucks and Lehigh counties in Pennsylvania and Richmond, Virginia, Lawrence said.
The Windsor acquisition is part of a series of deals with the same seller, from which Regal also bought industrial properties in eastern Pennsylvania and Richmond, Lawrence said.
The seller had attempted to market a larger portfolio of similar properties together but was unable to sell it as a package, Lawrence said.
That gave Regal an opportunity to select individual properties it found particularly attractive.
“We were able to pick off a few of the assets that we were most interested in out of that portfolio,” Lawrence said.
Lawrence said Snowball’s local track record is a key asset in the Windsor deal.
“Snowball’s local market expertise is purely advantageous from looking at properties like this,” Lawrence said.
Both Ker and Lawrence said they would consider pursuing additional investments together, although they aren’t currently evaluating another joint acquisition.
