October 30, 2017

This CT realty brokerage succeeds, too, as a builder

Last year was a very good one for the brokers and staff of New England Retail Properties 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 "sheepadoodle," 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 advisors 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 — dealing 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 development, 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 Massachusetts 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-development 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 different 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 Connecticut's retail explosion in the mid-2000s, building Kohl's first discount department 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 landlords 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 tenants,'' D'Addabbo said. "There's more space than tenants.''

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