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September 16, 2024 Deal Watch

Prominent developer Krohn eyes sale of first CT investment, as focus shifts to larger projects

HBJ PHOTO | MICHAEL PUFFER Developer Avner Krohn poses on a rooftop lounge atop “The Brit,” a nearly completed, 107-unit apartment building overlooking downtown New Britain.
Michael Puffer | Hartford Business Journal “The Brit,” a nearly completed, 107-unit apartment building overlooking downtown New Britain.
By Michael Puffer
Avner Krohn’s apartment development pipeline 
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Busy developer Avner Krohn’s first investment in Connecticut came in 2006, when he and a partner paid $700,000 for a dilapidated 26,975-square-foot office building near Central Park in downtown New Britain.

Krohn later bought out his partner and, in 2020, launched a $4.3 million renovation that transformed the five-story, century-old office building into 20 apartments above restaurant space.

Today, that building — known as “The Andrews” — is fully leased, but Krohn has decided to list it for sale on Ten-X, an online auction site.

The move is part of a shift in strategy — mainly a sharper focus on developing and owning larger projects, in New Britain as well as other nearby communities. Krohn says The Andrews is now too small for his investment and management strategy.

Krohn, who runs Jasko Development, said he hires West Hartford-based Konover Commercial to manage his properties, but using a third-party manager for a small apartment building is not worth the cost.

As a result, he has in recent years begun to sell off apartment buildings with fewer than 30 units, as well as smaller retail assets.

“We don’t do property management in-house anymore,” Krohn said. “So, it’s really shedding the assets that are no longer our core assets.”

Michael Puffer | Hartford Business Journal
Developer Avner Krohn poses outside “The Brit,” a nearly completed, 107-unit apartment building overlooking downtown New Britain.

Krohn was 25 when he bought The Andrews. His portfolio consisted of four commercial properties in Brooklyn and New Jersey. Now, at 43, Krohn’s portfolio includes 400 apartment units in buildings either recently completed or nearing completion, all in Connecticut.

Krohn said that, working with partners, he will launch construction projects by the first quarter of 2025 that will add another 542 units in Greater Hartford.

Development catalyst

Krohn, who lives in Long Island, said New Britain has become like a second home. Early last year, Krohn moved Jasko Development’s headquarters into a 36,530-square-foot former New Britain Post Office building he bought on West Main Street.

Krohn said he’s been attracted to the city for several reasons. It’s almost exactly halfway between Boston and New York, has great highway access and a walkable, compact downtown where his projects could make a big impact.

“What always attracted me to New Britain is it has a walkable downtown,” Krohn said. “It was also a manageable downtown, which meant one or two projects would go a long way.”

His developments have become pillars of New Britain’s economic development efforts.

Erin Stewart

“The way I’ve seen him and his business grow is similar to how we’ve seen downtown New Britain grow, starting from very small developments, one building at a time, to now blocks at a time,” said New Britain Mayor Erin Stewart.

Krohn’s early projects have attracted to New Britain other developers who are now actively transforming once-blighted properties in and around downtown.

“Avner used to be the only person who was building in downtown New Britain,” Stewart said. “Because of his investment and his developments and the success he has seen, we now have three or four big-time players that we are working with that are now buying and redeveloping dilapidated properties in town.”

Brad Balletto

Bradley Balletto, managing director for investments at real estate services firm Northeast Private Client Group, said New Britain is one of the most attractive multifamily markets in the state, serving as a reasonably priced community with strong downtown amenities.

It’s a bargain compared to nearby suburbs like Farmington and West Hartford, he said.

Brisk pace

Krohn said he wants to continue developing at a brisk pace, adding about 200 units annually. He’s got a strong pipeline and has partnered with developer Brian Zelman on many projects.

In New Britain alone, he’s working on three developments valued at about $76.5 million that will add 321 apartment units.

He also has projects underway in West Hartford, Bloomfield and even North Carolina, where he is working on plans for a large-scale retail development on 50 acres outside Raleigh.

Krohn also said his focus will predominantly be on developments that involve local support in the form of tax breaks or other incentives.

“In today’s day and age, without public participation, the projects really don’t pencil out,” Krohn said.

Krohn’s largest Connecticut project is in East Hartford, another blue-collar town that has experienced some success drawing big-impact developments.

There, Krohn and Zelman are teamed on the redevelopment of a 25-acre site that used to house a Showcase Cinemas theater. The town has agreed to hand over the property to the developers for $1 in exchange for a pledge to build at least 300 apartments.

Under the development agreement, East Hartford is to help direct $10 million in public funds to the estimated $115 million project.

Krohn and Zelman have missed deadlines — in September 2023, and this past April — to secure financing, but the town has agreed to give them more time. Krohn attributed the delay to painstaking negotiations over the conditions of the $10 million in public assistance.

The town has agreed to funnel state funds to infrastructure needed to build on the site. The Capital Region Development Authority is expected to directly oversee construction of utility and roadway infrastructure on behalf of East Hartford.

“It’s really just working out the details of the grant funding and how it is being distributed,” Krohn said. “We are working diligently with the municipality and CRDA.”

Krohn said he and Zelman have spent “many millions” on design and other expenses to advance their East Hartford plan, and continue to spend about $150,000 monthly. He hopes to break ground this year.

“It’s a little up in the air,” Krohn said. “I really hope to break ground this year, but some of it is out of our control and up to the CRDA.”

Avner Krohn’s apartment development pipeline

  • The Strand (New Britain): 100-unit, $25.5 million apartment building planned for the corner of Main and Chestnut streets, a site that used to host the Strand Theater. Construction is expected to begin before the close of the year; completion date is summer 2026.
  • The Brit (New Britain): 107-unit, $25 million apartment building with 5,450 square feet of first-floor restaurant space under construction at 267 Main St., the former site of Burritt Bank. First completed units received tenants in August; last units ready for occupancy by late fall.
  • The Highrailer (New Britain): 114-unit, $26 million apartment building with 6,000 square feet of restaurant and retail space. The project, which is expected to wrap up by the end of the year, is at 283 Main St., which previously hosted longtime downtown fixture Amato’s Toy & Hobby.
  • Residences at Wash Brook (Bloomfield): 111-unit building completed a little more than a year ago by Krohn and his partner, Brian Zelman. The building is now almost completely leased. They’re planning to launch a second, $13 million phase before next summer that will add a 40-unit building.
  • The Byline (West Hartford): 48-unit, $22 million project in West Hartford Center that will include 10,000 square feet of ground-floor retail space at 920 Farmington Ave. The project, being developed by Krohn, Zelman and Richard and Zach Korris, is nearing completion.

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