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April 15, 2024 FOCUS: Commercial Real Estate

Owner of Rocky Hill office/manufacturing building looks to expand vertically as strong demand for high-ceiling warehouse space continues

PHOTOS | CONTRIBUTED Here are before, during and after photos of a roof raise on a 49,600-square-foot property in Shelton, at 466 Bridgeport Ave. The building is owned by New York-based GTJ REIT Inc., which is proposing a similar roof-raising project in Rocky Hill.

A real estate investment firm that owns a vacant Rocky Hill manufacturing and office complex wants to “raise the roof,” in order to expand the pool of potential tenants, as demand for distribution and logistics space continues to be strong.

It’s an uncommon approach that’s gained steam with some property owners — especially in the Northeast, where there’s an abundance of older manufacturing buildings with low ceiling heights, industry experts said.

Warehouse tenants are looking for higher ceilings to boost storage capacity, as demand for e-commerce fulfillment centers has surged due to a steady rise in online shopping, experts said.

New York-based GTJ REIT Inc. is in the exploratory stages of attempting to raise the roof — from 18- to 30-foot ceiling heights — on its 91,600-square-foot property at 777 Brook St., in Rocky Hill, “for greater warehouse volume,” according to an application before the town Planning and Zoning Commission.

The plan is to turn the former CT Lottery headquarters, which is split evenly between office and warehouse space, into 90% warehousing.

Tim D’Addobbo

Tim D’Addobbo is an executive director at real estate firm Cushman & Wakefield and an industrial property specialist representing GTJ in the pending project. Plans also call for adding space and loading docks to the existing building and reconfiguring truck parking.

GTJ is planning the overhaul, which still needs town approval, on spec, meaning it doesn’t have a tenant lined up for the building.

A roof raise, like any major expansion, can be time-consuming and comes with a considerable price tag, but is still cheaper than new construction. A property owner would need to weigh the cost against the anticipated return on investment, D’Addobbo said.

At the same time, finding a tenant in the current market that needs a 92,000-square-foot building evenly split between manufacturing and office space, is “a needle in the haystack,” D’Addobbo said.

GTJ owns close to 10 million square feet of industrial and office space in New York, New Jersey and Connecticut, including two warehouses in Windsor Locks, an office building in Farmington, and industrial buildings in Orange, Shelton and Milford, according to its website.

GTJ has raised the roof on two other buildings, in Shelton and New Jersey, and feels confident it’s a solid investment, D’Addobbo said.

The Rocky Hill property was once home to the Wiremold Company and capable of heavy manufacturing, before the lottery moved in and converted half the space to offices.

The lottery last year relocated its headquarters to Wallingford.

Building taller

Rob Marek

Rob Marek is the owner of Raise the Roof Logistics and an exclusive representative of LIFTEX, which is the technology used to lift roofs. LIFTEX was formerly known as EZ Riser.

Marek, who is working with GTJ, said LIFTEX has few competitors in the field of roof lifting, which has seen a “slow and steady climb” in demand.

He said there’s been a “forward march toward taller” warehouses with minimum 24-foot clear ceiling heights.

New warehouse construction is seeing heights of 30 feet or more, he said.

Marek said converting class D, C and B warehouses to Class B+ by lifting the roof and making other subtle changes is a compromise that competes against new modern construction.

“It continues to evolve, no matter what the height is, someone is always building taller,” Marek said.

Driving demand for distribution space in general is the need for companies to have hyper local e-commerce facilities, like Amazon’s last-mile warehouses. Marek said it’s no longer ideal for one company like Walmart or Amazon to have one distribution center in Springfield, Mass., to serve all of Greater Hartford.

“We’re seeing a trend for lots of smaller warehouses close to population centers, evolving away from huge warehouses near ports,” Marek said.

Better utility

Art Ross, executive managing director of commercial real estate company Newmark.

Redeveloping industrial buildings to better fit today’s demands has become an increasingly popular option for landlords and developers, said Art Ross, a broker and executive managing director at real estate firm Newmark.

Low ceiling heights are one of the top obstacles with older industrial buildings, Ross said, along with outdated mechanical systems and lighting, and a lack of loading docks.

He said raising a roof is a perfect example of creating better utility and functionality of a building that is likely obsolete.

Aside from building new, roof raising can be a cost-effective option, coming in at “roughly half the cost and twice as fast as new construction for any commercial or industrial property,” Marek said. He said each project’s cost varies, but sometimes can be as little as 25% of new construction costs.

The structural work by LIFTEX in Rocky Hill will cost $13 to $18 per square foot for lifting and steel re-support of the building, Marek said, but the entire renovation will cost $35 to $55 per square foot.

Most projects take anywhere from seven months to a year, with pre-construction work on engineering, permits, steel fabrication and mobilization taking up a majority of the first 14 to 20 weeks. Actually raising the roof is much faster, at roughly one foot per hour; most smaller lifts can be completed in one day, Marek said.

Marek said LIFTEX has completed hundreds of lift projects nationwide, and has raised the roof on almost 500,000 square feet of space in Connecticut. Most of that was in a former General Motors plant in Bristol, which is now occupied by Firestone.

LIFTEX also raised the roof on a 45,000-square-foot building in Hartford, formerly home to the Restaurant Depot, and a 49,000-square-foot former Sikorsky building in Shelton.

Marek said he’s approached for lifts not just to accommodate distribution warehouses, but also athletic facilities and destination retail sites, like trampoline parks or pickleball courts.

He said he does work throughout the U.S. — including in Detroit, Philadelphia and Baltimore — where there are “heavily clustered, old and valuable buildings.”

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