WALLINGFORD — The Calare Properties application to build two warehouses on the former Bristol Myers-Squibb site is part of a growing trend in smart warehouses to support the rise of e-commerce.
The 180-acre Research Parkway site is among the last large parcels of land along the I-91 corridor. In fact, some experts describe it as developer gold to accommodate the need for distribution warehouse operations between the Greater Boston and New York metropolitan markets at less cost.
“With regard to sites like Bristol-Myers, I would say that the northern New Haven industrial market, and all of Connecticut for that matter, has seen demand for industrial product bolstered by the way retail goods are bought and sold,” Timothy Mitchell, vice president of CBRE Valuation and Advisory Services Group, said in an e-mail.
The state’s industrial market is beginning to adapt to changing consumer behaviors, Mitchell said.
In North Haven, the former Pratt & Whitney manufacturing facility was demolished for a new 855,000-square-foot Amazon fulfillment center. Just north of that in Middletown, the former Aetna office campus was razed to build a 525,000-square-foot Fed Ex Ground distribution hub.
“With e-commerce sales forecast to grow over the next several years, and given Connecticut’s proximity to consumers, we are projecting demand for new sites and high quality industrial real estate to increase over the next several years,” Mitchell said.
Calare Properties bought the former Bristol Myers-Squbb campus in March for $5 million with an initial plan to lease the space to another bio-pharmaceutical user. But Calare found few takers in an industry that is changing how it conducts research and development, with a desire to be linked to universities and medical hubs.
After finding no tenants, Calare saw the property’s future in flex warehouse space. The company altered its initial plan and submitted a proposal to demolish the former campus and build two warehouses — one at 600,000 square feet and the other at 400,000 square feet — to accommodate emerging companies looking to emulate Amazon’s operation.
The ceilings would be 38 feet high, within the industry
standards to accommodate automated production. It will also have some office space and bio-tech space if needed.
“Wallingford, like the rest of Connecticut, has a glut of office space,” said Dennis Ceneviva, a land use attorney representing Calare during the regulatory process. “Why would you want to develop more?”
Ceneviva and others don’t worry about the overdevelopment of warehouses, confident retailers will need more storage and shipping operations. He points to local automotive dealer and developer John Orsini, who built a distribution center for Best Buy not far from the Bristol-Myers site on Northrop Road.
“As (Town Planner) Kacie Hand said, when the town designed this as an IX zone, one of its features was the proximity to the highway,” Ceneviva said. “Certainly this region is prime.”
Calare Properties is no stranger to warehouse and distribution deals and large returns on investment.
Founded in 2003 in Hudson, Massachusetts, Calare has expanded its reach into New Hampshire and Connecticut. The company is a private
real estate manager and operator focused on acquiring warehouse, manufacturing research and flex/office commercial real estate.
Earlier this year, it had acquired 17.5 million square feet of properties representing $800 million in transactions. The Bristol-Myers property acquisition included 915,000 square feet of research and development and office space.
“There was no market for a company to take a building of 1 million square feet,” said Jim Manley, Calare vice president of economic development. “Knowing that it probably wasn’t likely to get someone to come in and take that building, the other path was an industrial use.”
He also said there’s “no site on (Interstate) 91 with 84 acres of buildable land that close to the expressway.”
Calare has owned several properties in the state, including the Lego campus in Enfield.
Last year it bought a 175,000-square foot warehouse and secured a 10-year lease with one of the world’s leading suppliers of chemical additives and measuring instruments to be the sole tenant.
“The real estate and location is prime for a growth industry,” Manley said about Research Parkway. “Things are changing so quickly, the way people buy and sell is what makes e-commerce attractive. We react to what people want.”
If the Planning and Zoning Commission approves the project, Manley said he expects to fill the buildings with tenants similar to FedEx and Amazon. But negotiating with tenants is difficult until Calare gets its permits, he added.
“You can’t leave this property empty,” he said of the Bristol-Myers proposal. “It’s zoned industrial. When asked to change something, we’ve never said ‘no.’ We want to make it work. If this can be completed it can be a real asset to the community.”