Issue link: https://nebusinessmedia.uberflip.com/i/542399
www.HartfordBusiness.com July 20, 2015 • Hartford Business Journal 3 More CT users value owning space than leasing By Gregory Seay gseay@HartfordBusiness.com I n March, entrepreneurs Patrick Sweeny and David Connelly pulled off a feat they had been desperate to do for some time: They bought an office building in Glaston- bury to house their expanding wealth-man- agement practice. They paid $1.2 million for a vacant, 38,988-square-foot building at 151 National Drive, in the town's business park, that was once regional offices for financial-technology services provider Fiserv Inc. "It was a very unique building,'' Sweeny said. "This town is tough to buy business real estate in. It doesn't come on the market very often." Now, the partners in Winding Brook Capital LLC and affiliate Apella Capital, are budgeting $2 million more to gut and renovate the build- ing with upgraded décor, new technology and ventilation systems and amenities to accom- modate its 100 or so employees by next spring, Sweeny said. Their offices in town currently occupy 12,500 square feet at 638 Hebron Ave. Winding Brook/Apella is one of a growing number of commercial users who, area bro- kers say, are exploiting interest rates that are the lowest in generations and a growing roster of available properties, to buy and own their office space rather than rent. The same trend, too, is evident, albeit to a lesser extent, with industrial space, brokers say. FedEx's plan for a package-handling facility on Aetna's former Middletown hilltop site is but one example. Larry Levere, senior broker with Sentry Commercial in Hartford, who has represent- ed users and landlords in some of those deals, says the growing momentum of user-owned office and other commercial properties is yet another sign of the resurging realty market and the economy. Such demand also helps stabilize the broader realty market and is a boon to business parks and other landlords who suddenly find themselves stuck with a surfeit of unleased space. For buyers, it's a way to lock-in and stabi- lize operating costs, such as rent, observers say. Ownership, too, means flexibility to use their space however they want without ask- ing someone else's permission or risking breaching leasing terms. As always, there is a downside for busi- nesses that take the risk and tie up capital in real estate: If business falls off or the econo- my tanks it might be tough to sell at the price owners need to recoup their investment. As property owners, they, too, are on the hook for property taxes, and building maintenance and upkeep. But that appears to be a secondary concern for most user-buyers right now. "As they look into their crystal balls," Levere said, "there is all this space they are going to need ultimately.'' The sweet spot for user buyers is office and industrial-flex buildings, sized 16,000 to 40,000 square feet, he said. John Glascock, director of UConn's Cen- ter for Real Estate and Urban Studies, said smaller office buildings in the Hartford Greater Hartford user-office buys Some Glastonbury office buildings were bought … 151 National Drive 38,988 square feet purchased February 2015 by Winding Brook Capital. The owner plans to fully renovate the building for 2016 occu- pancy 855 Winding Brook Drive 32,976 square feet purchased March 2014 by Travel Insured (relo- cated from East Hartford) 769 Hebron Ave. 23,380 square feet purchased June 2012 by Gemma Power Systems (relocated from Main Street, Glastonbury) 100 Western Blvd. 25,537 square feet purchased July 2011 by Mike Grossman/AdviceOne (relocated from 95 Glastonbury Blvd.) … Along with a few in Farmington: 281 Farmington Ave. 18,000 square feet was purchased in October 2014 by CT Wealth Management/Kevin Leahy (moved from Waterside Drive in Farmington) 2 Batterson Park Road Women's Health bought 20,508 square feet in July 2014 195 Farmington Ave. UConn bought 41,950 square feet in January 2013 12-16 Brick Walk Lane 12,682 square feet in four buildings was purchased in June 2012 by Patrick Downend/Corporate IT 860- 676-2720 S O U R C E : S E N T R Y C O M M E R C I A L www.kelsercorp.com 111 Roberts St, Suite D East Hartford, CT 06108 860 610 2200 Learn how to elevate your business with Office 365 New Haven • Farmington • Springfield July 21 July 23 July 28 Contact Lisa Carroll for more info 860.610.2220 www.kelsercorp.com/three-city-tour/ 151 National Dr., Glastonbury Continued (Clockwise from top left) 100 Western Blvd., Glastonbury; 2 Batterson Park Road, Farmington; 769 Hebron Ave., Glastonbury; 855 Winding Brook, Glastonbury; 195 Farmington Ave., Farmington P H O T O S | C O N T R I B U T E D