Hartford Business Journal

www.HartfordBusiness.com • October 30, 2017 • Hartford Business Journal 15 This CT realty brokerage succeeds, too, as a builder By Gregory Seay gseay@HartfordBusiness.com Last year was a very good one for the bro- kers and staff of New England Retail Proper- ties Inc. (NERP), a Wethersfield commercial- retail property broker and developer. So good that principals and co-owners Mark D'Addabbo and Matt Halprin treated employees to an all-expenses paid getaway to Puerto Rico last January. The jury is still out on whether 2017 has been good enough to warrant another reward trip, D'Addabbo said. Its staff is small; just nine, four of whom are broker-producers. D'Addabbo and his staff, including "Professor Smoo,'' the office dog and his pet "sheepadoo- dle," are housed at 150 Hartford Ave. "We didn't build as many buildings this year as last year," D'Addabbo said. While other commercial brokers and ad- visors key in on sales and leasing of office, industrial and residential properties, NERP has built its reputation — as well as a New England retail-property portfolio — deal- ing exclusively with retail properties, and with one U.S. retailer in particular. D'Addabbo started as a commercial broker in 1984, launching NERP in 1987. In 2005, he segued into commercial develop- ment, particularly retail. That business thrived amid the Great Recession. "It's just something I wanted to do,'' said D'Addabbo, a Connecticut native. In 2016, NERP oversaw development, he said, of three New England retail stores for Tennessee agri-retailer Tractor Supply Co. in Middletown and Orange, Conn., and another in Milledge, Mass. It also developed a pair of O'Reilly Auto Parts stores in Mas- sachusetts and Rhode Island. This year, NERP built two Tractor Supply outlets in Newtown and Naugatuck, and has approvals to start work next spring on a pair in Suffolk County, Long Island, N.Y. Tractor Supply declined comment on its relationship with NERP. Tractor Supply is an ideal retail-devel- opment partner, D'Addabbo said, because, as a publicly traded company with a solid business model and stellar credit, it makes it easy for NERP to approach its primary lender, PeoplesBank in Holyoke, Mass., and others about financing. NERP also works with Connecticut shopping-center landlords, many of whom find restaurants among their most eager tenant prospects. For instance, the shuttered Carrabba's restaurant near Manchester's Shoppes At Buckland Hills mall will reopen with a differ- ent tenant. D'Addabbo declined to identify the tenant until a lease is signed. Discount retailers, such as Family Dollar and Dollar General, are expanding their locations, as are pet-supply stores such as Petco. In turn, department stores such as Macy's and Sears are struggling, while Toys R Us is in bankruptcy. D'Addabbo witnessed first-hand Con- necticut's retail explosion in the mid- 2000s, building Kohl's first discount de- partment store in the state, in Rocky Hill, in 2005. Since then, the Wisconsin retailer has opened a dozen stores in Connecticut. But it's no easy task, D'Addabbo said, convincing Connecticut communities to embrace a "big-box retailer" like Kohl's or a chain supermarket, with stores that average 50,000 square feet or more. "Every town is different,'' he said, "but … if it's a somewhat healthy community, with a strong tax base, there's likely to be more scrutiny of a project proposal. Most towns today, with the economic circumstances we read about, are receptive to us. For the most part, towns have been good to us." But that, he said, is only the start to the development cycle. "I find the land, get [land-use] approvals, find the tenant, do all of the zoning and development … then sign a lease and do the construction buildout,'' he said. The process remains much the same, he said, except that much of NERP's realty activity these days is helping its landlord clients recast their retail centers to appeal to urgent-care and fitness centers and other non-traditional retailers. The struggles of department stores and other national retailers have left many land- lords vulnerable, said D'Addabbo and NERP co-founder Matt Halprin, who is the firm's resident retail expert. "I would say if you had to ask who has the upper hand, I'd certainly say it's ten- ants,'' D'Addabbo said. "There's more space than tenants.'' in-state sites, officials said. In Bloomfield, an urgent-care facility re- cently debuted in a pair of former storefronts in the Bloomfield Mini-Mall, 6 Mountain Ave. East Hartford gamble Restaurants, too, are springing up. So, too, are specialty retailers hawking every- thing from fashion and outdoor-sports ap- parel to baby clothes. But Halprin, of New England Retail Properties, harbors doubts as to whether the proposed shopping center at Rentschler Field in East Hartford will realize its full potential, at least in the near term. "We don't think there's enough busi- ness today in this market to support the concept of value retail,'' he said. "Where's the business going to come from?" Horizon Group CEO Gary Skoien said the Rentschler development is 60 percent preleased, "which is significant.'' While acknowledging the rising trend of national retail bankruptcies and a slowdown of new store openings from the rest, Skoien said he sees none of those impacting his East Hartford retail project scheduled to open in Nov. 2018. However, he said Horizon shrank the first phase of its East Hartford outlet mall to 282,000 square feet and some 70 stores vs. the 350,000 square feet and about 35 more stores originally planned, a response to the current state of the retail scene nationally. "We're still planning to expand to that level,'' Skoien said, "but we're just taking it a little slower going in.'' His positive pitch to prospective retail tenants is that central Connecticut has a dense population of some 1.5 million con- sumers, many of whom are in households whose incomes well exceed the national average. He declined to identify which retailers have signed on to the Shoppes at Rent- schler, but said "there definitely will be non-traditional'' retail, including more restaurants, among its occupants. Meantime, West Hartford is weighing a zoning-ordinance change that would allow food, alcohol and arcade-style entertainment under one roof, said Mark McGovern, the town's community devel- opment director. That could entice retail operators, such as Dave & Buster's, the Texas arcade-sports bar chain whose sole Connecticut store is in Mancheter's Shoppes At Buckland Hills mall. Dave & Buster's did not respond to a request for comment. Greater Hartford Retail Realty Census 2017 2016 Market size (square feet) 37,603,200 37,577,600 Retail properties 3,474 3,500 Retail establishments 8,128 8,100 Vacant square footage 4,177,058 4,176,200 Vacancy rate 11.1% 11.1% Source: KeyPoint Partners LLC (From left) Kathy's Urgent Care plans a downtown Hartford clinic; West Hartford's former Sears store is undergoing a major makeover; East Hartford's outlet-store mall coming in 2018. PHOTO & RENDERINGS | CONTRIBUTED

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