In the central Connecticut market, owner/users are beginning to seek fair priced industrial facilities that can be financed by mostly local community banks using SBA and some conventional loans. Also we are seeing companies come up from Fairfield County (Bridgeport and Stamford) to take advantage of Waterbury Development Corp. loans and some forgivable grants. One 35,000-square-foot user put up their equipment as collateral to obtain a $500,000 loan for modern space where they could become more productive at a much lower cost of occupancy and expand their workforce.
One landlord is buying large vacant industrial facilities at $20 per square foot and rehabbing and subdividing for re-lease programs. We are also seeing some new construction and facility expansions in industrial parks that offer Enterprise zone incentives.
Municipal and state Department of Economic and Community Development incentives are driving transactions. These incentives include the Urban Jobs program, Enterprise Zones and Corridors, SBA 504 loans, and tax abatements and other enhancements.
Waterbury has four industrial parks and at least five business parks surrounding the city, including Watertown, Plymouth, Naugatuck, Cheshire, Oxford and others. The city of Waterbury offers many perks, and the others offer lower taxes and suburbia.
The Naugatuck Industrial Park on Route 8 in Naugatuck is considered the top of the Route 8 corridor to many Fairfield County customers, but buyers look everywhere for the best overall situation. Brokers need to have exclusive representation agreements, lots of patience and a really good comparative skill set.
Property values are flat at best. Good facilities are selling at about $50 per square foot. Higher priced offerings languish on the market unless they are truly mint condition, or they become price reductions. Buyers want good, modern facilities that are not polluted and their banks are picky as well.
Good product is hard to come by. For example, a lease on a prime 20,000-square-foot manufacturing building for $6 NNN recently fell through because the landlord/user could not find a suitable facility to move his company to. Many available facilities are old and not what current manufacturers seek. In addition, we could attract more distribution companies if we had more facilities with high ceilings. Most of the facilities that come available have 12- to 18-foot height, whereas today’s distributors require 22 feet and up.
— Tom Hill III, owner of Tom Hill Realty & Investment LLC in Waterbury, Connecticut,
and host of the Tom Hill Show on WATR 1320-AM