Commercial property owners look to create more warehouse space
The ongoing growth of ecommerce is fueling demand in Connecticut for more warehouse space to store and distribute goods.
That is why an office-industrial building at 419A West Ave. in Stamford Executive Park, a few blocks south of Interstate 95’s Exit 6, will soon be torn down to make way for a new building covering about 75,000 square feet. The new complex represents one of the largest warehouses to be built in the past few decades in the state, which already hosts hubs for a number of key players in the supply chain.
“The need for industrial warehouse space has grown substantially over the last five years,” Bill Anson, managing director of the industrial division for commercial real estate brokerage RM Friedland, which is marketing the property, said in an interview. “The majority of the buildings in this general marketplace are old and inefficient. They have obsolete technologies of construction from the 1950s to the 1970s. There’s been very little, if any, new ‘merchandise’ that’s come on the market in the last 20 to 30 years.”
Demolition of the existing building at 419A West Ave. is set to start within the next few weeks. Covering about 70,000 square feet, the pod-shaped structure was formerly occupied by Fujifilm Medical Systems, which announced in 2019 its relocation to Lexington, Mass.
The new building — which is being constructed on a speculative basis — is scheduled to be completed by the first quarter of 2023. It will have significant cubic storage, with a clearceiling height of about 34 feet in most of the structure.
Fairfield County-based V20 Group, the property’s owner, would prefer to have one tenant lease the building, but it would consider two tenants, according to Anson.
“It will be a tenant that can take advantage of the square footage and the cubic storage. It will also be built to handle the largest trailer trucks,” Anson said. “Because of the attrition of
(warehouse) buildings in the five boroughs, there’s been a constant flow of New York City companies that are coming up the line and looking for space in Westchester and Fairfield counties.”
V20 opted against keeping the office-industrial building given companies’ preference for new office space in walkable sections of the city such as the downtown or Harbor Point. Not including rentals for film production, the 419A building has been vacant since Fujifilm Medical Systems’ departure.
“The old Fujifilm building was obsolete in terms of its design and attributes,” Anson said. “With all the choices in downtown Stamford, an office building in the middle of an industrial park
would not normally be a first choice for a company looking for 70,000 square feet of office space.”
At the same time, recent recruitment shows Stamford Executive Park’s appeal as a warehouse hub. Last year, parcel carrier LaserShip leased 40,000 square feet in the neighboring building at 650 West Ave. There is another newcomer, ABCO HVACR Supply + Solutions, a distributor of HVAC and refrigeration systems and supplies. ABCO has leased approximately 18,000 square feet in the warehouse building at 419B West Ave. The latter building is undergoing renovations, with ABCO probably a couple of months from taking occupancy, according to Anson.
Last year, V20 acquired 419 and 650 West Ave., for $20.5 million. The seller, Elmsford, N.Y.-based Robert Martin Co., still owns the neighboring buildings at 500, 550
and 600 West Ave. In 2019, Robert Martin acquired Stamford Executive Park for about $30 million.
“The city of Stamford is the perfect location for this critically needed warehouse space, and by working closely with RM Friedland, we look forward to marketing this site to companies that will truly complement and serve the substantial growth we are seeing in the region,” V20 Group Senior Partner Joe Vaccaro said in a statement.
In Norwalk, developers had floated a similar proposal by seeking to convert the approximately 330,000-square-foot Norden Park complex into a distribution center. But they withdrew their specialpermit application in February 2021 amid resistance from neighbors who were concerned about the project’s potential air and noise pollution and impact on traffic.
There is also significant demand for existing space. Stamford-based BlueTriton Brands, whose portfolio includes Poland Spring water, has leased an approximately 279,000-square-foot warehouse in East Windsor.
“Demand for all classes of warehouse distribution is robust, particularly assets in immediate proximity to I-91, affording efficient access to the New York and New England markets,” Christopher Metcalfe, vice president at commercial real estate firm CBRE, said of BlueTriton’s lease.
At the same time, state officials have shown their support for increasing Connecticut’s warehouse inventory. Amazon can earn up to $15 million in tax credits to support its fulfillment center in North Haven. For Amazon to receive the maximum amount, it needed to have invested $225 million in the facility by 2019, must
employ more than 3,800 people at the location by the end of 2021 and still employ more than 3,800 there by the end of 2027.
Among other supply-chain giants, Greenwich-based XPO Logistics, one of the largest transporters of goods, has facilities in Meriden, Norwich, Wallingford and Windsor. Greenwich-based warehousing specialist GXO Logistics, which was spun off last year from XPO, has hubs in North Haven and Windsor.
As the need for warehouse space has grown, so has the demand for workers in the industry. There were about 68,000 people employed in trade, transportation and warehousing in Connecticut in January, up 4 percent from a year ago, according to the state Department of Labor.