Hartford Business Journal

HARTFORDBUSINESS.COM | MAY 18, 2026 25 FOCUS | COMMERCIAL RE AL ESTATE LENDING in 2021, before rebounding above pre-pandemic levels in 2022 and rising to 4,612 units in 2025. Carusone said growing free-rent periods and slowing lease-ups are trends banks should take seriously, though he said he has not heard wide- spread concern among his contacts in the Connecticut banking industry. Selective lending Andreas Kapetanopoulos, regional president for Connecticut and Massachusetts at NBT Bank, said his organization still sees opportu- nities to finance apartment projects, but is closely watching how long it takes some new developments in Connecticut to fill units. He also said property values for mid-tier "Class B" apartment buildings have declined from a year earlier. Kapetanopoulos said there is no broad concern about the outlook for multifamily projects in Connecticut, although some markets, including New Haven, have seen numerous developments open simultaneously, prompting banks to more closely track tenant demand. Still, Kapetanopoulos said his New York-based bank, which has $15.9 billion in assets and six branches in Connecticut, has not adjusted its multi - family lending targets and continues to follow its playbook of partnering with proven developers in strong locations. The 175-unit Luminary Simsbury Meadows project is a good example. NBT provided a loan covering about 60% of the development's $52 million cost. The first units at the apartment complex in the center of Simsbury are expected to begin leasing in early July, according to developer Chris Nelson, owner of Nelson Construction. Early demand appears strong. As of May 7 — before pre-leasing officially began — the project had generated more than 500 online inquiries from prospective renters, Nelson said. "We want to grow those rela- tionships," Kapetanopoulos said. "We are focused on properties in excellent locations, in areas that we know well." FASTEST-GROWING MULTIFAMILY LENDERS IN CT These CT-based banks grew their multifamily real estate loan portfolios the most in 2025. Multifamily real estate loans BANK 4Q 2025 4Q 2024 % CHANGE CHELSEA GROTON BANK $55.7M $24.2M 129.82% THOMASTON SAVINGS BANK $87.9M $50.3M 74.64% NORTHWEST COMMUNITY BANK $56.9M $36.2M 57.29% FIRST COUNTY BANK $236.3M $151.3M 56.18% TORRINGTON SAVINGS BANK $45.9M $31M 48.03% ION BANK $348.8M $251.3M 38.80% FAIRFIELD COUNTY BANK $104.8M $77.9M 34.55% ASCEND BANK $93.4M $71M 31.43% DIME BANK $130.6M $112.9M 15.64% IVES BANK $106.3M $94.1M 12.88% Note: This list includes only banks headquartered in CT and with over $1 billion in assets. Source: HBJ analysis of FDIC data By Michael Puffer mpuffer@hartfordbusiness.com C onnecticut's new environ- mental cleanup law was expected to make it easier to buy and redevelop commer- cial properties by eliminating a decades-old regulatory hurdle. But even after the state dismantled the Transfer Act this year, banks are expected to continue demanding extensive environmental testing before financing deals — effectively becoming the new gate- keepers for contamination risk, experts say. When Connecticut lawmakers agreed to replace the 40-year-old Transfer Act, officials estimated a less-onerous environmental review and cleanup process would unlock $3.78 billion in growth over five years. Experts still expect the change to spur investment in properties that once might have fallen under Transfer Act review. But costly environmental testing is unlikely to disappear, as lenders move to protect themselves from liability. "It doesn't matter what you want, or I want in the transac- tion," Lee Hoffman told an audi- ence of commercial real estate brokers in April. "It matters what the bankers want." Hoffman, chairman of law firm Pullman & Comley, spoke during a panel discussion hosted by the Connecticut and Western Massa- chusetts chapter of the Society of Industrial and Office Realtors. SIOR members were key in a yearslong effort to replace the Transfer Act with a "release-based" system similar to those used by most other states. Approved last year, the new system took effect March 1, although properties already undergoing environmental review and cleanup under the Transfer Act will still need to meet the old standards. Supporters of the new system say it eliminates what critics long described as the Transfer Act's "guilty-until-proven-innocent" approach. Under the old law, prop- erties that generated, stored or processed more than 220 pounds of hazardous waste in a month trig- gered state review whenever they changed hands. The review alone could cost tens or even hundreds of thousands of dollars, including on sites where no contamination had ever been documented. Under the new system, property owners are required to address contamination as it occurs, or when evidence of a release is found. Banks emerge as key gatekeepers under CT's new environmental cleanup system Lee Hoffman, chairman of Hartford-based law firm Pullman & Comley, said banks are likely to remain key drivers of environmental due diligence under Connecticut's new cleanup system. Contributed Photo Continued on next page

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