Property Rounds: Some office buildings make comebacks in tough times
Hearst Media / Stamford Advocate, Greenwich Time
9 West Broad Street, Stamford CT
In early 2013, 9 W. Broad St. on the edge of downtown Stamford languished as an empty and neglected property. Today, it hums with activity as some 400 workers stream in and out of a refurbished nine-story structure.
Stamford and other communities in southwestern Connecticut still grapple with office vacancy rates hovering above 20 percent. But the revitalization of 9 W. Broad St. and the turnaround of similar buildings show how property owners’ capital investments and the draw of central locations can make corporate hubs attractive to tenants in a challenging market.
“There is a little reticence in the market to being that first tenant in, so the owner has to prove themselves,” said John Hannigan, principal of Choyce Peterson in Norwalk, a firm that represents tenants in commercial real estate transactions. “And they do that by … tenants having the comfort of seeing that renovations are going on or recently completed.”
Selling a vision
Forstone Capital and Westport Capital bought 9 W. Broad St. for $14.5 million in March 2013. Built in the early 1980s for the Nine West shoe company, the occupancy rate in the approximately 202,000-square-foot building declined as major tenants, including Nine West, relocated. A lack of upgrades hindered the recruitment of newcomers.
The new owners quickly brought in commercial real estate firm Rhys as their broker to lease and market the building. Sensing the property’s potential, Rhys then moved its own offices to the building.
“You really have to paint pictures at first on paper,” said Christian Bangert, executive vice president and principal of Rhys. “We were bringing in tenants and saying this is what it’s going to look like. Then the leases started coming quicker (after renovations started) just because tenants weren’t as concerned whether this would happen.”
To make the building competitive again, Forstone Capital and Westport Capital have invested more than $20 million in exterior and interior improvements, including office buildouts, according to Bangert. The improvements have encompassed roofing, elevator and mechanical systems, the creation of a front plaza and cul-de-sac and “skinning” work that gave the building exterior its distinctive tan-brown hue. In addition, the owners installed amenities including a cafeteria, gym, conference center and private boardroom.
The building’s overhaul has spurred a cascade of leasing deals. To date, Rhys has brokered 25 leases at 9 West Broad, which stands across the street from Mill River Park. Tenants now take up about 80 percent of the building, with the list of occupants including technology, health, energy, real estate and finance firms.
In Norwalk, the i.Park Norwalk complex at 761 Main Ave., on the Wilton line, stands out as another revived property.
In redeveloping the historic Perkin Elmer headquarters, Greenwich-based National Resources drew L.A. Fitness into a new auxiliary building at i.Park Norwalk to provide a major amenity for tenants, while populating the main headquarters building with a number of health clinics affiliated with Norwalk Hospital.
And in 2013, the developer claimed the figurative yellow jersey after the Cannondale Sports subsidiary of Dorel Industries chose i.Park Norwalk for its own headquarters, relocating from Bethel to occupy both the main building and a smaller outbuilding in the rear.
In Greenwich, Greenwich Office Park has also seen its outlook improve in recent years. Built in the 1970s as the headquarters for UPS and later a campus-style office option for a number of companies, it fell victim in recent years to its aged look and an “end-zone” location in western Greenwich.
High vacancy rates plagued the office park, so the property’s managers Clarion Partners and CBRE Group opted to invest millions in renovating the buildings’ interiors and landscaping.
The renovations culminated in a sale last fall to Greenwich-based Fareri Associates at about $344 per square foot. The deal ranked as the largest Greenwich office sale in five years, according to CBRE.
In Milford, the former Smiles Amusement Center property on the Boston Post Road, near the Connecticut Post mall, sat vacant for roughly four years after the entertainment center closed in 2011. The old teen hangout was demolished in 2015 and last year was replaced with a brand-new plaza with tenants including REI Co-op, a Verizon store and Panera Bread.
In Danbury, the Lee Farm Corporate Park has flourished since Southport-based Summit Development purchased the 215,000-square-foot building in 2013. Lee Farm was about 70 percent leased when Summit purchased the building for about $17 million.
The building has hit 100 percent tenancy, even after withstanding the departure of GE Capital, which was spun off by its corporate parent in 2015. Wells Fargo acquired some of GE Capital’s assets and promptly leased 71,000 square feet in Lee Farm. It recently completed building out its space at Lee Farm.
Rhys executives said they plan to bring in a number of new tenants this year at 9 West Broad St. Another 7,000 square feet to 10,000 square feet could be leased in the next couple of months, according to Bangert.
The asking annual rate for 9 West Broad’s tenants is $34 per square foot. For a firm with 5,000 square feet, the annual outlay would come to $170,000, not including electrical costs.
“We’ve created something that didn’t exist here in the Stamford market, in the sense of its uniqueness and style,” Bangert said. “For the younger, modern tenant that’s coming into the marketplace, it’s definitely something of interest to them.”
March of Dimes marshals real estate community
Brett Wilderman, left, and Brandon Hall, event honorees and principals, Forstone Capital.
The 20th annual March of DimesFairfield County Real Estate Award breakfast drew a packed-house crowd of 700 to the Hilton Stamford Hotel & Executive Meeting Center recently.
Forstone partners and co-founders Brandon Hall and Brett Wilderman were the event honorees.
Since Forstone’s founding in 2007 the New Canaan boyhood friends’ company has acquired more than 1.2 million square feet of real estate. Its services include property management, asset management, construction and leasing.
The breakfast’s top sponsors were The Ashforth Co., which was the event’s inaugural honoree and which additionally provided this year’s marketing and management support; Building and Land Technology, the 2003 event honoree; and Forstone Capital. A Who’s Who of county companies filled out the gold, silver, bronze and “Fund the Mission” sponsorships, 60 in all.
The event across the years has raised more than $6 million toward funding the March of Dimes mission to promote term pregnancies and to help preemies and their families. The 2015 breakfast alone brought in $56,000 via texting NICU to 41444. (NICU – an acronym for neonatal intensive care unit – is a common reference at March of Dimes events and is pronounced “nickew”.)
The top donation by text won a three-course lunch and cooking demonstration for up to 15 persons with Chef Stephen Lewandowski at Harlan Publick in Norwalk.
“The Real Estate Award Breakfast honors outstanding individuals or companies whose commercial real estate activities have significantly enhanced the local community,” March of Dimes said in a prepared statement.
“We are proud to recognize Forstone for their area revitalization efforts and applaud their principals for their leadership and community advocacy,” said Ed Tonnessen, chairman of the Real Estate Awards committee and executive managing director at Jones Lang LaSalle.
Stamford Mayor David Martin offered an upbeat appraisal of the host city’s health, noting citywide unemployment had fallen from 5.1 percent a year ago to 4.1 percent now. He cited $6 billion in construction now underway and an apartment occupancy rate of 96 percent. “The reason our rents are so high is because our occupancy rates are astronomical,” he said.
Martin ticked off a number of scientific breakthroughs – the theory of relativity, the development of penicillin and the polio vaccine – and said March of Dimes progress is fueled by science.
“I take it as a great disappointment that ignorance of science is seen by some as a way to be more popular today,” he said.
Martin said science was not about faith, but investing in science nonetheless demonstrated a worthy faith in the scientific process. “How quaint, my parents and grandparents put those dimes into those cardboard boxes on store counters,” he said. “Their faith in science obliterated polio. It changed the world.”
March of Dimes honors Forstone Capital
Fairfield & Westchester County Business Journals
March of Dimes will honor Forstone Capital with its 2015 Real Estate Award at its 20th annual March of Dimes Fairfield County Real Estate Award Breakfast, the organization said recently.
Forstone partners and co-founders Brandon Hall and Brett Wilderman were slated to accept the award at The Hilton Stamford(One First Stamford Place) on Thursday, December 3, at 8 a.m.
“The Real Estate Award Breakfast honors outstanding individuals or companies whose commercial real estate activities have significantly enhanced the local community,” March of Dimes said in a prepared statement. “Throughout the event’s almost two-decade-long history, nearly $6 million has been raised in support of the March of Dimes mission to give all babies a healthy start.”
More than 700 industry professionals were expected to attend the event.
Prior to starting Forstone Capital, Wilderman was director of acquisitions for HEI Hospitality, a real estate firm that specializes in acquiring and managing hotels throughout the U.S. Currently, he is a board member of Stamford Downtown Special Services District.
Before co-founding Forstone Capital, Hall was a senior associate for GE Commercial Finance Real Estate. He focused on developing equity partnerships with national and local operators and helped acquire a $2.5 billion portfolio during his time at GE. He is currently commissioner and vice chairman of the Bridgeport Downtown Special Services District and is a board member of the Cornell Baker Program in Real Estate.
“We are proud to recognize Forstone for their area revitalization efforts and applaud their principals for their leadership and community advocacy,” said Ed Tonnessen, chairman of the Real Estate Awards committee and executive managing director at Jones Lang LaSalle. “We are humbled to receive this award from an organization as noble and influential as March of Dimes,” said Wilderman. “We feel fortunate to be able to work among such first-class peers in Fairfield County’s real estate industry and know that together we can make a difference in the communities in which families – like our own – live and grow.”
Darien-Based Developer Goes Green, Saves With C-PACE Program
Darien Daily Voice
Forstone Capital partners Brandon Hall and Brett Wilderman have found success using the Connecticut Green Bank C-PACE PACEsetter program. Photo Credit: Contributed
After the coldest February on record for Bridgeport, everyone is discussing two major issues: global climate change and the cost of energy.
Luckily, for commercial, industrial and multifamily property owners, the Connecticut Commercial Property Assessed Clean Energy’s (C-PACE) launch of Green Bank just two years ago has helped more than 90 property owners “go green,” and the benefits can be seen here in Bridgeport.
Forstone Capital, a Darien-based real estate investment firm whose principal Brandon Hall was recently featured in a “Bridgeport Better Every Day” advertisement, has been taking advantage of C-PACE funds from the Connecticut Green Bank to renovate a 98,000-square-foot office space at 855 Main St.
With this partnership, Forstone was able to garner about $2 million to finance HVAC upgrades, new cooling towers and energy-management measures that will bring in more than $6 million in savings over the life of the upgrades, according to the Connecticut Green Bank.
Forstone’s success in Bridgeport is just one of many projects that Connecticut Green Bank CEO Bryan Garcia was happy to announce at the two-year mark of the organization's quick start and growth.
“We are thrilled by the success of the C-PACE program,” said Garcia, “In just two years, we’ve seen the first securitization of C-PACE transactions in the country and allocated more than $65 million of capital, enabling property owners to make deep energy upgrades and control their energy costs.”
The City of Bridgeport has also done its part in making sure information on C-PACE and “PACE” funding are readily available through their website for Bridgeport business owners.
The push for a greener industrial, commercial and residential Connecticut comes as the industry has allowed from more financially sound upgrades, according to Garcia.
"Clean energy is now more accessible and affordable to the commercial and industrial sector,” Garcia said. “We are supporting economic development and creating jobs, and the Connecticut Green Bank is leveraging limited public dollars to attract private investment.”
New downtown Bridgeport entertainment in the offing
Connecticut Post, Stamford Advocate, Danbury News Times, Greenwich Time
Brandon Hall, left, and Brett Wilderman, principals at Forstone Capital, stand in the former Roberto's Restaurant in the old People's Bank building at the corner of Main and State Steets in downtown Bridgeport. They have plans for a number of new developments around McLevy Green, including the old bank which will be transformed into a German beer hall. Photo: Autumn Driscoll
Once people move in, they need something to do.
Downtown Bridgeport has seen a wave of conversions of unused buildings into apartments, introducing a downtown constituency to a neighborhood that a decade ago was mostly devoid of life. As more apartments come on the market, the next phase of growth is developing service and entertainment options for all those new residents.
A few are in the offing. Forstone Capital, a Darien-based real estate investment firm with numerous holdings in downtown Bridgeport, has announced plans for a pair of new businesses aimed at both residents and visitors -- a German beer hall in the original People's Bank building at 155 State St., and a comedy club in the former Playhouse on the Green theater at 167 State St.
"We're bringing in more residential, but also entertainment options," said Brett Wilderman, principal at Forstone. "We think those uses hit home on the character of downtown, and provide services for customers in the neighborhood but also serve as regional draws."
The buildings are part of a collection of properties that Forstone and Norwalk's Spinnaker Development bought from People's United Bank, based downtown, in 2008. The 60,000-square-foot, four-building Forstone development fronting on McLevy Green is scheduled to be fully developed next year.
The future beer hall was for years the home of Roberto's restaurant, which closed in 2010 after 17 years in business. Playhouse on the Green, which closed in 2011, is slated to be the home of The Stress Factory comedy club, which also has a location in New Brunswick, N.J. The building next to that will be converted into 32 apartments with ground-level retail.
"The buildings have tremendous history and character, and we're trying to bring them back to life here with uses that are sustainable," Wilderman said.
Most successful downtown redevelopments follow a familiar pattern, said John Simone, president and CEO of the Connecticut Main Street Center, a Hartford-based nonprofit agency that helps communities facilitate downtown development.
"The classic downtown revitalization is when you first have the pioneers coming to live downtown, and as that critical mass builds, you're able to support retail, small businesses, coffee shops," he said. "It's incremental and it evolves."
While it can be hard to attract people to live in a neighborhood with few services, it's much more difficult for businesses to sustain themselves without a dependable customer base. "There's no simple formula, and it's really an organic process," he said.
National retailers have specific requirements about the number of local residents required before they will consider moving into a neighborhood, he said. "If you don't reach those numbers, they won't even bother," he said. "If you reach it, maybe they'll take a look."
It's important to think local first, Simone said. "You want to look to local entrepreneurs," he said. "Look at businesses that are already there, and see if there are ways for them to expand their product lines to accommodate people moving in. It's a local phenomenon, and not every store has to appeal to every target market."
A grocery store has long been considered a classic sign of a neighborhood's arrival. In 2013 a 7,500-square-foot market with separate grocery, deli, bakery and cafe sections opened in the Arcade on Main Street, but closed six months later.
"A grocery store is a milestone if it stays," Simone said, and attracting a major grocery store is difficult. "You need to hit very specific numbers before they'll even talk to you," he said. "They operate on the thinnest of margins."
He said Bridgeport's continued growth downtown is a sign of unmet regional demand for that style of living, and that businesses will follow the people.
Investor interest in commercial property picking up
Connecticut Post, Stamford Advocate, Danbury News Times, Greenwich Time
Scott Raasch, director of business development for Forstone Capital, in the lobby of the former Mechanics & Farmers building on Main Street in downtown Bridgeport, Conn. on Wednesday, September 24, 2014. The company is currently developing several projects in the city. Photo: Brian A. Pounds
As the economy slowly improves, more commercial real estate executives are looking to develop assets and deploy capital in secondary markets to generate returns, and the Greater Danbury market is providing opportunities.
Of the 100 senior commercial real estate executives surveyed in a 2014 Commercial Real Estate Outlook Survey conducted by tax advisory firm KPMG, 68 percent expect to increase capital spending in 2014, up from 60 percent in 2013.
Interest in the Danbury area is increasing, according to Felix Charney, president and CEO of Fairfield-based Summit Development, but available properties are at a premium.
Charney faced stiff competition when he sought to purchase Lee Farm, the 215,000 square-foot office complex in Danbury last year.
"There was an investment fund from White Plains, N.Y., that put it under contract, but they dropped out," said Charney, who has developed more than 3.75 million square feet of commercial space and more than 950 residential units.
When Summit and its partner, The Grossman Cos., of Quincy, Mass., bought Lee Farm in April 2013 for $16.9 million, a third of the building was vacant.
"We've leased 50,000 of the 71,000 square feet. We'll soon be at 95 percent occupancy," he said, adding that Danbury commercial properties are becoming attractive to prospective investors as available lower Fairfield County properties are snapped up. "Danbury is the next ring of the circle. Coastal Fairfield County is expensive, so people move to the north or east."
Charney has learned to see potential in under-valued or distressed properties that require adaptive re-use of a building or brownfield site.
"I'm in the business of manufacturing land. That's a term I use all of the time. I have to buy tainted assets," he said. "We're land-constricted (in Fairfield County) and have restrictive zoning. As a result, land prices are high, and it ultimately curtails supply."
While the KPMG survey is revealing, because it is on a national scale it does not tell the whole story about commercial real estate investment at the regional level, according to Charney.
"You can't apply macro-economics to real estate," he said, because commercial real estate is local.
`Very limited supply'
Like Charney, Joe Wrinn, a broker with Goodfellow Ashmore, a commercial real estate firm in Danbury, has followed the area market for nearly 25 years, said the commercial real estate market in northern Fairfield County is constricted.
"There's only so much institutional-grade investment property to go around," he said. "I always have calls from people wanting to get into the investment arena. The demand for those income-producing properties is always high -- starting at $1 million. There's an awful lot of demand, but very limited supply."
Most owners of prime commercial property in the Danbury area prefer to retain their holdings because they are income producers, Wrinn said.
"Where else are they going to put their money," he asked.
855 Main Street in downtown Bridgeport, Conn. is one of several city buildings being developed by Forstone Capital. Photo: Brian A. Pounds
McLevy Square the block of buildings on State Street in downtown Bridgeport, Conn. across from McLevy Green, is scheduled for development by Forstone Capital. Photo: Brian A. Pounds
The limited supply of available Class A office space in the county is causing investors to look a Class B office properties, said Mary Grande, a Stamford-based partner in KPMG's Metro New York Financial Services tax practice.
"Leasing activity has improved in Fairfield County," she said, "and there is a shift toward foreign investment in the market."
Much of the interest can be attributed to the region's proximity to New York City where premium office space in Manhattan is reaching capacity, she said.
The KPMG study shows that 80 percent of executives expect foreign investment in U.S. real estate to increase. Roughly 40 percent of those respondents predict non-U.S. investment to climb by 6 to 10 percent, while 8 percent expect an increase of more than 20 percent.
"We've seen a substantial amount of Chinese capital deployed in 2014, and we expect that trend to continue as real estate funds, large institutions and foreign investors look for direct and indirect investment in real estate equity and real estate debt because of the attractive yields," said Phil Marra, leader of KPMG's National Real Estate Funds.
When asked to identify regions with the best real estate investment opportunities, almost half the respondents in the KPMG study chose the Southeast (48 percent, up from 28 percent in 2013). The Northeast ranked fourth, behind the Southwest and Midwest with 30 percent of participants saying it offered the best real estate investment opportunities -- down from 36 percent in 2013.
When asked which types of properties their company would be looking to acquire or invest in, Class A assets in primary markets led the list, followed by development opportunities, distressed assets, Class A assets in secondary or tertiary markets and Class B/C assets.
New Downtown Apartments Unveiled
Connecticut Post, Stamford Advocate, Danbury News Times, Greenwich Time
BRIDGEPORT -- Nearly shouting to be heard over the buses and the music festival across the street, city and state officials Thursday unveiled what they hope with be the cornerstone of the city's downtown renaissance -- 30 luxurious but affordable apartments and a voluminous office space.
The project is aptly named Landmark because it has risen from the hulking landmark Mechanics & Farmers Bank building that has sat empty on Main Street opposite McLevy Green for a decade. And it is another jewel in the crown of Norwalk's Forstone Capital, which already owns -- by itself or with partners -- a dozen downtown buildings.
A view of the new apartments that are inside the former Mechanics & Farmers Bank building in downtown Bridgeport, Conn. on Thursday, Aug. 21, 2014. Photo: Christian Abraham
Christopher Petre, an estimator with Viking Construction, checks out one of the apartments available in the new renovation inside the former Mechanics & Farmers Bank building in downtown Bridgeport, Conn. on Thursday, Aug. 21, 2014. Photo: Christian Abraham
"When Brett (Wilderman) and I first looked at this building in 2008 it was even difficult to walk into, it was in such bad shape," said Brandon Hall, principal partner in Forstone.
But shortly thereafter, the city put the three-story, block-wide building on the market and Forstone snapped it up for about $500,000. A big boost came when Fletcher Thompson, an engineering design firm with 60 jobs that had left Bridgeport for Shelton in 2002, agreed to rent out the cavernous first floor of the building. Forstone Capital was then awarded $3.3 million for the renovation project from the state through the Competitive Housing Assistance for Multifamily Properties initiative administered by the state Department of Economic and Community Development. The federal Environmental Protection Agency paid for much of the cleanup after the building was declared a federal brownfield.
"There are great bones in this city and sometimes it takes people from outside with fresh eyes to see it," said Mayor Bill Finch.
While Fletcher Thompson's employees will still have to wait a month or more to move into their new digs, Hall said they already have security deposits for 24 of the 30 apartments with some residents expected to move in by the end of the month.
"We are showing the demand is here for people to live in downtown Bridgeport," he said.
Bridgeport Mayor Bill Finch, center, talks about the new apartments available in the former Mechanics & Farmers Bank building in downtown Bridgeport, Conn. on Thursday, Aug. 21, 2014. Standing with Finch are Forstone Capital Managing Partners Brandon Hall, left, and Brett Wilderman. Photo: Christian Abraham
The apartments, on the second and third floors of the building, are either one bedroom or large studios ranging from 700 to 1,000 square feet. Depending on the size, the rents range from $1,050 to $1,300 with the higher-end apartments including small washers and dryers and spectacular views of McLevy Green. Designed by Fletcher Thompson, the floors are a combination of carpeting and wood panels and the kitchen countertops are granite.
Parking is catch-as-catch-can, either on the street where it's free after 5 p.m. or at several of the Forstone-owned lots nearby. All are at renters' additional expense.
Hall said many of the people who have made commitments to take the apartments commute to jobs in Stamford and New York.
"I love it, the more the better," said Massimo Tabacco, owner of nearby Amici Grill, as he stood at the back of the crowd for the ribbon cutting. "I've been here five years and I'm starting to see more people coming downtown. The more people living downtown the better."
Forstone, which set its development sights on the city in the mid 2000s, buying up with Norwalk partner Spinnaker Real Estate 10 downtown properties formerly owned by People's United Bank, has come under some criticism in the past for allegedly muscling out small businesses.
The former owners of Take Time Cafe on State Street accused Forstone of forcing them out after taking over the building by doubling the cafe's rent. The Playhouse of the Green also closed after Forstone raised its rent after buying the building. And then there was Forstone's effort to force the venerable Ralph N Rich's out after Forstone and Spinnaker purchased the restaurant's building from People's. A Superior Court judge blocked that effort for now.
But fellow downtown developer Phil Kuchma contends Forstone is very good for the city.
"I think it's great they are investing here," he said. "It helps validate that there are reasons to develop in this city and we should be encouraging investment in the city from outside money."
Washington Trust Provides Forstone Capital $2.76 Million to Acquire
Retail Property in Westport, CT
The Wall Street Journal
Washington Trust's (Nasdaq:WASH) Commercial Real Estate Group recently provided $2.76 million to Forstone Capital, LLC to finance the acquisition of a single-tenanted retail property in Westport, CT. The property, currently occupied by Men's Warehouse, consists of 6,843 square feet of retail space. Constructed in 1989, the building is situated on a .64-acre parcel with high-visibility frontage along the densely populated commercial and retail area of Westport.
"Westport has one of the lowest retail and office vacancy rates in Fairfield County," said Joseph J. MarcAurele, Washington Trust Chairman and Chief Executive Officer. "Forstone Capital's acquisition of this property will benefit from the property's excellent location in this strong retail market."
Forstone Capital, LLC is a boutique real estate investment firm headquartered in Darien, CT. Since its inception in 2007, Forstone Capital has acquired over 1,000,000 square-feet of office, retail and multi-family properties throughout Connecticut.
Washington Trust's Commercial Real Estate Group provides commercial real estate mortgages for the construction, refinancing, or purchasing of investment real estate projects. Financing ranges in size from several hundred thousand dollars up to multi-million dollar projects. For more information, contact Timothy M. Pickering, Senior Vice President, Commercial Real Estate Group, at 401-348-1482 or 800-475-2265 ext. 1482.
Darien firm adds Stamford building to portfolio
Connecticut Post, Stamford Advocate, Danbury News Times, Greenwich Time
A Fairfield County partnership has acquired a Stamford office building and plans to spend $7 million to upgrade the property.
Darien-based Forstone Capital teamed with certain funds managed by Westport Capital Partners in Wilton to buy a 200,000-square-foot building at 9 W. Broad St. According to documents at the Stamford Town Clerk's office, the seller was LBUBS 2000-CF River Plaza, a unit of LNR Partners in Miami Beach, Fla. The purchase price was listed at $14.5 million.
The new owner plans to reposition the property by overhauling the building's roof, lobby, common areas, elevator cabs, amenities, entry points and mechanical and heating, ventilation and air conditioning systems.
"Our vision is to reintroduce this asset to the market as a true Class A office building once the renovations are complete," said Forstone Principal Brandon Hall, citing the location in the city's central business district. "It's in a continually improving area."
Forstone has 14 properties in Bridgeport and one each in Darien, New Canaan and Westport. This is its first in Stamford.
"Stamford is a very competitive market. We've had our eye on Stamford for a while," Hall said.
The team has engaged an architect to produce concept drawings, said Forstone Principal Brett Wilderman. "We are anxious to get started on transforming the building into something that the city of Stamford will be proud of and one that our future tenants will enjoy," he said.
The project coincides with the unveiling of the Mill River Collaboration, whose Phase I stage is set to open this spring. Along with an ice skating rink and fountain, other amenities will include a carousel, fishing piers, kayak launch and a wooden canopy covering the park's central walking path.
Forstone and Westport Capital are making a significant capital investment in the building, strengthening the field of Class A downtown office space, said Laure Aubuchon, the city's director of economic development.
"It's a testament to the power of the Mill River. It's a park in their own backyard," she said.
The location of the building provides panoramic views of Mill River Park and Stamford's central business district, said Stephen Woodard of Westport Capital Partners. Tenants can enjoy the park and walk to downtown amenities and the train station.
RHYS Commercial of Stamford will market and lease space in the nine-floor building, which has the American Institute of Foreign Study as its major tenant. AIFS, however, plans to relocate elsewhere in the area.
"9 W. Broad St., will be one of the premier assets in the market when the renovations are completed," said Cory Gubner, president and chief executive officer of RHYS Commercial. "This is the most exciting thing to happen to the Stamford office market in a very long time."
He touted the building's proximity to Mill River Park and its access to Interstate 95 and the Stamford Transportation Center. The per-square-foot rental rate will be in the high $20s.
"We think it's extremely competitive pricing wise. It will be a Class A building in every stretch of the word," Gubner said.
RHYS already has several interested prospects, said Christian Bangert, senior vice president and principal of RHYS Commercial.
"Our goal is to be able to offer prospective tenants a Class A office environment at Class B economics," he said.
Joint Venture Picks Up 200,301-SF REO Property in Stamford
National Real Estate Investor
A joint venture comprised of Forstone Capital LLC and certain funds managed by Westport Capital Partners LLC has purchased 9 West Broad Street, a 200,301-sq.-ft. office property located in Stamford, Conn.
HFF marketed the REO property on behalf of the seller with Jose Cruz and Andrew Scandalios, both senior managing directors, Kevin O’Hearn and Jeffrey Julien, both managing directors, and Steve Simonelli, associate director, representing the seller.
Situated on nearly three acres, the property provides access to Interstate 95, Route 1, Merritt Parkway, the Stamford Metro North commuter rail station and Stamford Town Center. Standing nine stories tall, 9 West Broad was renovated in 1999 and anchored by American Institute for Foreign Studies. Amenities at the property include a cafeteria and parking garage.
Forstone Capital and CapRok Real Estate form Joint Venture to Acquire
Premier Westport, CT Retail Location
Connecticut Post, Stamford Advocate, Danbury News Times, Greenwich Time
Forstone Capital, in partnership with CapRok Real Estate, today announced its acquisition of 1365-1391 Post Road East, a retail property in Westport, CT consisting of two buildings and nearly 50,000 square feet of space. The property, located along one of Fairfield County’s most heavily trafficked retail corridors, is an easily-accessible shopping destination featuring over 750 feet of frontage, three surface parking lots, and covered garage parking, all in a highly desired neighborhood.
1365-1391 Post Road East is a top-tier retail location with longstanding tenants and considerable further potential. Over 22,000 cars pass by the property every day due to its prime spot along Westport’s Route 1 and short distance from Interstate 95.
“The purchase of 1361-1391 Post Road East is significant milestone for our company,” said Brett Wilderman, Principal, Forstone Capital. “It’s a property that exemplifies our ambition in the commercial real estate market and demonstrates our overall investment strategy. We’re looking forward to improving the property and having a positive impact on the Westport community.”
The property’s two buildings house popular retail destinations: 1365 Post Road East is occupied by Anthropologie and Parc Monceau, while Balducci’s Market calls 1391 Post Road East home. Both Anthropologie and Balducci’s have been tenants for nearly two decades, serving as enduring commercial cornerstones within Westport’s thriving retail community.
“Westport, CT and the broader Fairfield County market have enjoyed strong performance over the past several years,” said Michael Psyllos, Managing Partner at CapRok Real Estate, “and the acquisition of this asset underscores our company’s commitment to identifying well-located real estate investment opportunities, where we, along with our partners, can add value.”
Bruce Wettenstein, SIOR, and David Fugitt, SIOR, Partners at Vidal/Wettenstein Commercial Real Estate, served as the sole agents involved in the transaction. Shem Creek Capital of Wellesley, Massachusetts provided third party debt financing. Counsel for the seller was Jamie Gerard of Nevas, Capasse & Gerard of Westport. Counsel for the purchaser was Howard Komisar of Berkowitz, Trager & Trager, also of Westport.
“This is an outstanding investment from a business standpoint and an irreplaceable piece of real estate,” said David Fugitt, Partner with Vidal/Wettenstein.
New funds available for affordable housing
Connecticut Post, Stamford Advocate, Danbury News Times, Greenwich Time
HARTFORD -- Ten affordable housing developments worth more than $263 million were among the first recipients of a round of competitive state grants and loans announced Thursday by Gov. Dannel P. Malloy.
The multifamily developments, representing 1,018 units -- with at least 367 to be leased at below-market, affordable rates -- include three in Bridgeport and one in Norwalk. Most of the projects are eligible for up to $5 million each in state support.
It's part of a 10-year, $500 million effort to foster so-called workforce affordable housing throughout the state that was previously approved by the General Assembly. The state money is designed to bolster private financing for the projects.
Malloy made the announcement during a noontime news conference in the Legislative Office Building.
"The entire state's investment between 2000 and 2010 was $200 million," Malloy said. "Our administration has made an unprecedented commitment to affordable housing. Affordable housing is integral to stimulating economic develop and growing jobs. We invest in our cities and make them better places to live and work."
In Bridgeport, the South End Community Building Initiative will develop nine units worth $1.2 million, and Urban Green will build 87 units in the Jayson/Newfield development, worth $31.5 million, said Bridgeport Mayor Bill Finch. The state is targeting $5 million to the Urban Green project.
Bridgeport Mayor Bill Finch announces that three city affordable housing development projects, including the Mechanics & Farmers bank building, received state grant money, on McLevy Green in downtown Bridgeport on Thursday, August 2, 2012.
Brett Wilderman of Forstone Capital, owner of the Mechanics & Farmers building that is receiving state development dollars, on McLevy Green in downtown Bridgeport on Thursday, August 2, 2012.
Brandon Hall of Forstone Capital, owner of the Mechanics & Farmers building that is receiving state development dollars, on McLevy Green in downtown Bridgeport on Thursday, August 2, 2012.
Also, Forstone Capital will obtain about $3.3 million to state support for its $16.2 million project to create 30 units at the former Mechanics and Farmers Bank building on Main Street.
Finch, during a news conference Thursday afternoon on McLevy Green, directly across from the Mechanics & Farmers building and within walking distance of the other two projects, said the state money is a crucial piece of their financing.
Brandon Hall, of Forstone Capital in Darien, said if the state support had not come through, "We don't know what we would have done, to be honest" in finishing the Mechanics & Farmers conversion.
David Kooris, the city's new economic development officer, said the Mechanics & Farmers proposal in particular is crucial to the continued revitalization of Bridgeport.
Fletcher-Thompson Inc., an engineering and design firm that was founded in Bridgeport in 1910 and left for Shelton in 2002, will design and oversee construction then lease space in the former bank.
"The anchor tenant sends a signal to the world Bridgeport deserves another look," Kooris said.
And Kooris said the new housing, 18 units of market-rate and 12 units of affordable housing based on tenant income, is key to bringing more pedestrians downtown to support emerging businesses and entertainment.
"These are units occupied by young professionals priced out of Stamford and Norwalk," he said.
Elizabeth Torres, executive director of the Bridgeport Neighborhood Trust, said that group's South End Community Building Initiative is key to reclaiming an eight-block area filled with foreclosed upon homes and properties on the brink of foreclosure.
"It's part of a larger neighborhood stabilization strategy," Torres said. Finch said he appreciated the effort because he used to live in the South End.
In Norwalk, the 34-unit River Commons apartments on School Street will receive funding as part of its overall $10.4 million renovation of the property.
Catherine Smith, commissioner of the state Department of Economic and Community Development, told reporters that about $80 million in long-term bonding already has been approved for the housing program.
Forstone Receives 2011 Regional Economic Impact Award
On Wednesday, December 14, 2011, Forstone Capital, LLC was the proud recipient of the Economic Development Regional Impact Award from the Bridgeport Regional Business Council. Forstone Capital was recognized for its outstanding performance in Economic Development, one of the five priorities designated by the Business Council. The award was accepted on behalf of Forstone Capital by Brandon Hall and Brett Wilderman, Principals.
Brandon Hall and Brett Wilderman accepting the 2011 Economic Development Regional Impact Award.
Brandon Hall and Brett Wilderman with other recipients of 2011 Regional Impact Awards including Education, Healthcare, Sustainability and Small Business. Photos: Roger Stall Photography
Stamford's Harbor Point adds two more restaurants
CT Post, Stamford Advocate, Greenwich Time, Danbury News Times
Building and Land Technology is continuing with its goal to make its Harbor Point project in Stamford a multi-use community, announcing the arrival of Le Pain Quotidien, a Belgian bakery-cafe, and Harlan Social, a gastropub.
Both are scheduled to open in May in the Yale & Towne neighborhood, with Le Pain Quotidien located at 711 Canal St., and Harlan Social at The Lockworks, 121 Towne St.
The arrival of the restaurants enhances the 80-acre project's "live, work and play" lifestyle, said Carl Kuehner III, chief executive officer of Norwalk-based Building and Land Technology.
"With its neighborhood focus, creativity and uncompromising standards of quality, Le Pain Quotidien is the perfect addition to Harbor Point," Kuehner said in prepared comments. "Harlan Social adds yet another exciting dimension to Harbor Point's concept of cosmopolitan living."
Stephen Lewandowski, executive chef of the Tribeca Grill in New York City and operator of Harlan Social, has a wide breadth of international experience and culinary knowledge that will make the restaurant a community destination, according to Kuehner.
"In a relaxed and inviting atmosphere, Harlan Social will be a lively gathering place for people to socialize and enjoy good food and drink that is intriguing but not intimidating," Lewandowski said in prepared comments.
Guests can view the open kitchen and "action station," and there will be a full-service outdoor dining area. The restaurant will also offer cooking demonstrations.
Founded in Belgium, Le Pain Quotidien will offer freshly baked organic bread, organic beverages, European-style pastries, Belgian waffles, salads and tartines and quiches. Le Pain Quotidien has restaurants in Greenwich, New Canaan and Rye, N.Y., and had been looking at downtown Stamford, said Lauren Goldblatt, director of real estate.
"When we were introduced to Harbor Point, we were very impressed. We saw a synergy between the shoppers at Fairway and our customers," she said, adding that she liked the businesses that already have arrived.
They include Starwood Hotels & Resorts Worldwide, Design within Reach, Cornell University Veterinary Specialists, Louis Dreyfus Highbridge Energy, First Niagara Bank exhale Spa, Go Green Dry Cleaners, Dinosaur Bar-B-Que, Subway and Robeks Premium Fruit Smoothies, as well as Fairway.
The bakery-cafe will be one of several businesses at the century-old building that once housed the Yale Lock factory.
With about 2,800 square feet and upwards of 40 employees, Le Pain Quotidien is strategically located to serve residents of The LockWorks and The Lofts at Yale & Towne and nearby businesses.
That's the premise of a mixed-use development with restaurants, shops, offices and other businesses, augmented by open space, said Anita Kramer, vice president of the Urban Land Institute's Center for Capital Markets and Real Estate.
"You have a place to relax, stroll and do a little shopping," she said. "From a developer's side, they are providing a place for the residents, and it creates more of a destination. The arrival of Le Pain Quotidien is an indication that there is a solid market there."
Harbor Point could be considered a more expansive and inclusive version of Blue Back Square in West Hartford, said Nicole Griffin, executive director of the Connecticut Restaurant Association.
"The point is to have a self-contained community with everything a resident may want. It's nice to go down the street and have a meal and a drink," she said. "Each component is super important."
Historic company decides to return to Bridgeport
CT Post, Stamford Advocate, Greenwich Time, Danbury News Times
Mayor Bill Finch introduces Michael Marcinek, of Fletcher-Thompson, Inc. in the lobby of the Mechanics and Farmers Bank building, in Bridgeport, Conn. Dec. 12th, 2011. Fletcher-Thompson, a major architecture, engineering and interior design firm, announced that they will be relocating back to downtown Bridgeport, and will occupy the former bank building, that they will also be renovating. The renovation is expected to take 18 months.Photo: Ned Gerard / CT
An engineering and design firm that left the city in 2002 will be moving back. After leaving for Shelton in 2002, Fletcher-Thompson Inc., which was founded in Bridgeport in 1910, is planning its move back to the city and will design and oversee the construction of the Mechanics and Farmers Bank on Main Street with the intent of leasing space there in January 2014. "When we left it was tough for Bridgeport, but looking back we had to make tough decisions," said Mike Marcinek, managing partner at the architectural, engineering and interior design firm. "There have been many strong ties with the city. We looked back, and we said maybe we made a mistake leaving."
A decade ago, Fletcher-Thompson's 135-person workforce was spread out in three buildings in Bridgeport. After failing to locate 35,000 square feet of contiguous office space and suitable parking in the city, the company moved to developer Bob Scinto's Enterprise Corporate Park.
The company occupies 30,000 square feet there. But with additional offices opened in New Jersey, Florida and other states in the last decade, the space is now too large for the 60 employees who work there.
Scinto said he was surprised but not upset to learn the company plans to move back to Bridgeport.
"That's so terrific," he said. "They've been a great tenant. I've used them on a couple of projects. I'm losing a tenant, but I'm so glad Bridgeport is getting them."
He said he is not worried about filling the space once Fletcher-Thompson leaves.
"We have people waiting for space here," said Scinto. Marcinek said the company could not pass up the opportunity to move into the historic M&F bank. He said the question became, "Do we stay where we are in suburbia or do we look to being part of the renaissance of downtown Bridgeport?"
He said architects like to be in urban settings.
Although the company is excited to return to the city, the move could take up to two years because of the tremendous amount of work still required to renovate the bank property, which was vacant for decades, Marcinek said.
When it does happen, Mayor Bill Finch said it will be great news for the city.
"It was symbolic of troubled times when Fletcher-Thompson left the city for a different venue," he said, "and it is symbolic of better times to come that they have decided to return to the city and be a participant in the revitalization of downtown Bridgeport."
The company plans to lease the entire bank space, at 930 Main St., and ground floor space in the adjoining building, at 114 State St. Plans for the structures also include roughly 30 market-rate apartments in the upper floors.
Maintaining the property's historic integrity -- detailed stonework will have to be replaced to its original state, for example --will require a lengthy renovation process, said Brett Wilderman, principal at Forstone Capital, which was chosen by the city to purchase and redevelop the property in 2009.
"As a major stakeholder in the downtown, to have a company like Fletcher-Thompson move into downtown is a great thing," he said. "It allows us to move forward with the redevelopment and will put more feet on the street to use the retail operations."
Forstone Capital illustrates how ecological awareness has shifted the financial paradigm of commercial real estate
GBD, Green Building & Design
In 2004, Brett Wilderman and Brandon Hall began the planning process for a real-estate company that would purchase commercial properties in and around Bridgeport, Connecticut. The idea was to bring in revenue by either leasing up the properties or improving their operating expenses. When the firm went live in 2007 as Forstone Capital, the US real-estate market was at its frenzied peak, and the firm purchased a handful of residential and commercial properties. "It was an interesting time to start a real estate company," Wilderman says with a laugh. "We quickly faced some pretty serious challenges."
When the real-estate bubble burst in 2008, the opportunity to increase rents- essential to Forstone's business model-disappeared. The firm had little choice but to shift its focus wholly toward cutting back on operating expenses. With utilities making up a large percentage of these costs, Forstone Capital quickly became acquainted with the world of sustainable building and design. "Many of the properties we owned were over 50 years old," Wilderman says. "The mechanical systems had been upgraded over the years but were often still quite old."
The firm discovered that a number of programs offered grants for buildings requiring energy-efficient improvements, and it began aggressively pursuing those subsidies. At its property at 100 Fairfield Avenue, Forstone Capital was able to cut down on energy costs through a variety of measures. The controls on approximately 80 heat pumps were upgraded to direct digital controls, and Web based energy-management systems were installed on the boiler system, cooling tower, and makeup air units, allowing for more efficient oversight of energy use throughout the building. "It gives a brain to the system, heating and cooling the building only when it needs it," Wilderman says. Ultimately, the building has cut 487,000 kilowatt-hours annually and saved $100,000.
Today, Forstone Capital-which now owns around 600,000 square feet of space in Bridgeport, much of it downtown office space is not only keeping an eye out for ways to improve efficiency; it's also collaborating with third-party energy-efficiency experts as part of its acquisition process. The firm outsources its HVAC maintenance to a company that possesses an in-house sustainability-evaluation team that runs analytics on different scenarios. "That awareness has really given us a leg up, both in terms of existing properties and properties we're evaluating for purchase," Wilderman says. "We've become much better at eyeing those opportunities."
What, then, are the metrics for whether a potential property is viable from the point of view of improving operating expenses? "We always look at payback, and whether the up front costs can be justified through savings and bolstered by subsidies," Wilderman says. "If we're spending $100,000 to upgrade, we want to have a firm estimate on how quickly we'll get repaid on that in reduced energy costs. Two years or less is phenomenal. Three is okay. Four or more, it becomes less attractive." Though it still looks at occasional residential properties, Forstone Capital's niche is primarily commercial. "People are still pessimistic about the recovery of the commercial market, so there's less competition which we view as an opportunity," Wilderman says. "Since 2008, almost everyone's been in the position of trying to weather this economic tsunami. Before that, the idea of energy efficiency was about a tenth of our consideration with our properties. Now it's one of the biggest. It's completely shifted the paradigm."
TestAmerica locates main office in Darien
CT Post, Stamford Advocate, Greenwich Time, Danbury News Times
On Old Kings Highway: Headquarters goes from virtual to brick and mortar
An environmental testing company has chosen Darien for its new headquarters, settling into a space at 19 Old Kings Highway South.
TestAmerica, a privately owned business that has 35 laboratories and 40 service centers, opened its main office in late September in a 4,600-square-foot space in a building owned by Forstone Capital LLC.
The Darien site was chosen for its proximity to senior leadership and access to transportation, according to a company statement, which noted that CEO James Hyman lives in Stamford, and Chief Financial Officer Benjamin Erwin lives in Darien.
Stamford resident Constance Hubbard has been hired as vice president of human resources.
"They felt they needed a home base. The idea is having a beachhead where they can recruit from," said Gage, who worked with Rich Opalenik of the CresaPartners Norwalk office. "We're managing a portfolio of $1.2 million square feet for them."
Gage said the space will eventually house 15 to 20 employees.
The 45,513-square-foot, three-story building, purchased by Forstone Capital eight months ago, is a block from the Darien train station and near Darien's downtown, an important location as Forstone fills the property, said George Walker, executive vice president of the Stamford office of Jones Lang LaSalle, which represents Forstone.
Forstone is remodeling the building and improving the landscaping and parking lot, he said.
Carol Wilder Tamme, president of the Darien Chamber of Commerce, welcomed TestAmerica, noting that Old Kings Highway is a block from the busy Post Road.
"Expanding the `business buzz' from the Post Road into another block will be beneficial for restaurants and all other businesses that support people employed in our central business district," she said.
Fairfield County office market showing signs of life
The Stamford Advocate
Commercial rentals in Fairfield County showed signs of life in the second quarter as vacancy
rates appear to be stabilizing.
Downtown Darien Office Building Trades for $7.8M
CoStar, New York Times
$7.8 million. 19 Old Kings Highway South (between Corbin Drive and Center Street) Darien, CT. A private investment group in New Canaan, Conn., has bought this 42,376-square-foot office building with two stories and an 8,489-square-foot third-story setback. The property has 142 parking spaces and is in the downtown area within walking distance of the Metro North train station.
Downtown Bridgeport Under Construction
Five years ago, Bridgeport's downtown offered little but fast-food chain eateries, marginal shops and small businesses scattered among empty, graffiti-defaced storefronts. People visited with a purpose -- their job, jury duty at the Fairfield County Superior Courthouse, shopping for clothes at Jimmy's Army and Navy Store -- then quickly departed.
Forstone Stands Four Square Behind Properties
Three months after purchasing the former Mechanics & Farmers Bank building on Main Street, Forstone Capital is preparing to market the property to tenants.
Forstone Capital completes purchase of 170,000 SF Office Complex in Downtown Bridgeport
The $15.7MM complex, dubbed Lafayette Circle, will help play key role in the city’s revitalization.