A relatively new and growing Brooklyn-based real estate company headed by a former CBRE executive paid $33.2 million for five Connecticut industrial properties in 2022, targeting sites that could provide shelter for companies fleeing surging prices along Interstate 95.
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A relatively new and growing Brooklyn-based real estate company headed by a former CBRE executive paid $33.2 million for five Connecticut industrial properties in 2022, targeting sites that could provide shelter for companies fleeing surging prices along Interstate 95.
Snowball Developments bought industrial properties in Danbury, Norwich, Glastonbury, East Hartford and, most recently, in Watertown. Snowball is betting that companies getting priced out of the tight industrial market along the I-95 corridor will increasingly look afield for space.
“You have a land grab taking place along key I-95 interchange exits, where industrial tenants need to be, so they are close to the population base, but there’s not a sufficiently deep enough inventory of industrial land or industrial product,” said Brian Ker, president of Snowball Developments.
This is leading to “gentrification” of industrial users, with Home Depot, FedEx, Amazon and other high-volume players claiming prime spots, Ker said. That’s pushing less well-to-do users further toward the interior, to places like Wallingford, Watertown, Waterbury, Cheshire and Meriden, he said.
“Those are the places where the dominoes getting tipped over fall next, because the Merritt Parkway isn’t an effective trucking route, so they have to skip all the way into the interior,” Ker said.
Snowball’s 2022 Connecticut investments included:
- 5 Wisconsin Ave., Norwich: a 96,654-square-foot industrial building, built in 1970 on 5.5 acres. Purchased in a $6.8-million deal recorded Feb. 28.
- 2 Great Pasture Road, Danbury: a 114,408-square-foot industrial building, built in 1955 on 15.57 acres. Purchased in an $8.9-million deal recorded March 1.
- 172 Oak St., Glastonbury: a 50,644-square-foot office and warehouse building built in 1974 on 5.2 acres. Purchased in a $4.7-million deal recorded April 4.
- 47 Leggett St., East Hartford: a 71,500-square-foot building built in 1988 on 3.1 acres. Purchased in a $6.9-million deal recorded May 2.
- 169 Callender Road, Watertown: an 86,255-square-foot industrial building built in 1974 on 20 acres. Purchased in a $5.89-million deal recorded Dec. 13.
Ker said Snowball also owns three industrial properties in New Jersey.
On its website, Snowball said it was created to acquire underutilized and under-invested properties in the greater New York City region that have opportunity for future development. Ker said the roughly 2-year-old company tries to find properties where it can offer a stable home for existing, strong tenants and expand upon untapped potential.
Snowball is particularly interested in properties, like 169 Callender Road, which have room for outdoor storage. With ports congested, producers and users are holding onto greater portions of inventory for longer periods, putting storage at a premium.
The Watertown property is also appealing due to Amazon’s plans for a massive distribution center — equivalent to 2 million to 3 million square feet — on a municipally owned site straddling the Waterbury-Naugatuck town line.
“There will be no lack of suppliers, vendors and other groups that work within the orbit of Amazon,” Ker said. “It is going to have a positive economic effect.”
Ker has led Snowball since July 2021. Prior to that, he spent nearly three years working on real estate development efforts with the New York City Economic Development Corp., the city’s nonprofit economic development arm. Ker started his career with a 15-year run at global brokerage firm CBRE, where he reached the level of senior vice president before his departure in 2018, according to his LinkedIn profile.
Ker said his company is currently negotiating a purchase in South Windsor and another in Wallingford and continues to seek investment opportunities in the area. Connecticut has a stable and highly educated workforce, Ker said, along with relatively affordable real estate.
“Long term, whether our properties get redeveloped or just perform, the goal on all of our acquisitions is to improve them,” Ker said. “So, if it looks like a Class D now, it will become a Class B.”
