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June 10, 2024 Deal Watch

After bargain acquisition, owners breathing new life into long-neglected Windsor industrial/office complex; major warehouse expansion planned

HBJ PHOTOS | STEVE LASCHEVER Bradford Wainman (left), of Glastonbury-based commercial real estate investment firm Hollister & Moore LLC, and Steven Inglese, of the New Haven Group, teamed up last year to purchase the struggling industrial and office building at 175 Addison Road in Windsor for $9 million.
HBJ PHOTOS | STEVE LASCHEVER Steven Inglese and Bradford Wainman say 175 Addison offers tenants unique amenities, including: a fitness center, quiet courtyard, flex/industrial space and 200-person conference center.

Forgive Chuck Terrio if he was a little skeptical about the new owners of 175 Addison Road in Windsor.

Terrio has been the property manager for the site, which includes both office and industrial space, for 31 years, long enough to have worked for all four previous landlords.

“I’ve seen it sold for $67 million all the way down to $9 million,” he said.

He’s also seen a number of renovation plans over the years, most of which didn’t come to fruition.

A quick tour of the complex in mid-May, however, demonstrated that things are different this time, with Terrio expressing his satisfaction with the newest owners: Bradford Wainman of Glastonbury-based commercial real estate investment firm Hollister & Moore LLC and Steven Inglese of the New Haven Group.

The duo bought the site, which was appraised at $43.2 million, for just $9 million last year. Not only are they following through with over $1 million in renovations, they also have applied to the town of Windsor for a special use permit to add two 150,000-square-foot flex warehouse/manufacturing buildings on the property.

Changing hands

Located just 15 minutes north of downtown Hartford, 175 Addison, formerly known as the Addison Corporate Center, sits on 78.6 acres. It includes a 400,000-square-foot, one-story flex/industrial building attached to a 200,000-square-foot, four-story office building. The property also offers 2,200 parking spaces.

The complex was built in 1974 by Aetna Life Insurance Co., which sold it 30 years later for $23.75 million. Just 23 months later, in October 2006, it sold for $64.4 million.

Ten years after that, in November 2016, it was sold again, this time for $41 million to Addison Property Owner LLC, whose principal is Julia A. McCullough, of Mackenzie Realty Operating Partnership.

The region’s commercial office market, however, has changed dramatically since then, in part due to the pandemic. At the end of the first quarter of 2024, 23.7% of Greater Hartford’s 30.4 million square feet of office space was vacant, according to real estate firm CBRE. That was up from a 16.35% vacancy rate recorded at the end of 2016.

Windsor’s office market in particular has taken a beating. The Hartford north market, which includes the town of Windsor, had a 54.8% office vacancy rate at the end of the first quarter, according to CBRE.

The office building at 175 Addison has a 62% vacancy rate, Inglese said.

That allowed Wainman and Inglese — who each have portfolios of commercial, industrial and retail properties in Connecticut and elsewhere — to acquire 175 Addison last June for that bargain price of $9 million.

“The building had been owned by an out-of-state investment fund,” Inglese said. “It was underwater, so the value was well underneath what (the fund) paid for it.”

The previous owner had planned to redo the common areas, he said, but lacked the money to get it done.

“Because we bought the property when we did, we have the ability and the resources now to invest back in the building,” Inglese said.

They also have proposed using land across Addison Road from the building, currently occupied by 1,180 parking spaces, to erect two more flexible buildings for use as warehouse or industrial/manufacturing space, which has remained in demand despite the office market’s struggles.

“There’s expansion potential,” Wainman said.

‘Never goes dark’

The new owners said they are making the investment to renovate certain areas of the property because they see its potential. Both Inglese and Wainman say it’s the common areas, and some uncommon features, that make this complex unique.

First, it has a 10-megawatt power plant that is backed up by on-site generators, which means “the property never goes dark,” Inglese said.

“For companies that are doing engineering or high-tech manufacturing, you know that the building is always going to have power,” he said.

The power plant also means the facility can consistently provide manufacturers both chilled and heated water, which can be useful for high-tech manufacturing or bioscience lab work.

The office and industrial buildings on-site are connected by unique common areas. In addition to a cafe and dining area, there’s also a fully outfitted, 24-hour fitness center. It includes lockers, a sauna, free weights, weightlifting and cardio machines, and will eventually offer fitness classes.

It also has a centralized conference center with built-in audiovisual equipment that can seat about 200 people and be rented by tenants. The owners are also creating spaces to be used as breakout rooms during conferences.

The cafe/dining area is being renovated and updated, and will include a 24-hour market where employees of building tenants can buy food. It also offers access to outdoor courtyard areas that will feature picnic tables and Adirondack chairs.

“If we’ve got a fully operational cafe where you can get a hot sandwich, … there’s no other building in this market that supplies that,” Inglese said.

They also plan to redefine the phone booth by offering spaces for employees to have private cellphone conversations.

The Hub

But Inglese and Wainman see the property’s central common area as a gathering place for more than just dining and phone calls.

“We’re going to call this The Hub,” Inglese said of the cafe and seating area. “The whole goal is to get everyone passing through this space every day.”

To encourage that, they plan to install soft seating areas and gaming tables featuring ping-pong, foosball and shuffleboard. The decor also will encourage people to relax, with one side painted in blues like the ocean, and the other in green like the forest, they said.

“When we first bought the building, we didn’t realize how important The Hub was going to be until we looked at the overall competition,” Inglese said. “No one has that, so it’s a really effective marketing tool.”

Even small business owners or sole proprietors who can’t afford to lease space can still find a way to utilize the building, he added, because one of the new tenants will be Regus, the coworking company that rents desks and ready-to-use office space.

“There are a lot of Regus offices around the area,” Inglese said, “but if you rent here you’ve got the ability to rent our 200-person conference facility or use the gym. You’re not going to find another Regus around here that’s got that capability.”

Seeking tenants

With the renovations expected to be completed by the end of June, Wainman and Inglese are talking to other prospective tenants.

The 175 Addison complex has some holdover tenants, including Triumph Integrated Systems, a manufacturer of electronics and components for the aerospace industry that is a division of West Hartford-based Triumph Group.

Even with Triumph, approximately 135,500 square feet of flex/industrial space with 17- to 22-foot-high ceilings is still available.

Other tenants include Belcan Global Engineering, CDI Engineering Solutions, Community Solutions Inc., Cyient Inc. and QuEST Global.

Asked what rents in the complex will be, they didn’t quote a price but said manufacturers will pay one rate while office tenants will pay another.

“We can be super competitive because our basis is so low,” Wainman said.

He said most prospective tenants are waiting to see the renovation work completed.

“Everyone has always been talking about doing this renovation and it never got done,” Wainman said. “I think everyone’s kind of holding their breath and waiting to say, ‘OK, it’s for real.’”

Wainman added that The Hub concept is intended to help tenants lure workers back to the office in the post-pandemic era.

“The whole concept of having The Hub is to get people to want to come back to work, and they want to come here because there’s always other things to do,” he said.

Joel Grieco, an executive director of office brokerage in Cushman & Wakefield’s Hartford office, helped broker the sale of 175 Addison last year. He’s also helping lease the property.

By investing in renovations, the new owners are “recharging” 175 Addison’s vibe and “creating an environment where employees want to be,” Grieco said.

“Low rent, relevant and fun amenities, strong ownership, and 1 mile from the highway. For most tenants this is a compelling combination of benefits,” Grieco said.

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