Randy Vidal
Title: Founder and partner, Vidal/Wettenstein LLC
Industry experience: 50 years
Randy Vidal has kept a finger on the pulse of southwestern Connecticut’s commercial real estate market for nearly half a century. Vidal is one of five partners at Vidal/Wettenstein, a Westport-based brokerage that focuses on leasing, investment sales, exchanges and consulting in Fairfield and New Haven counties. After founding the firm in 1968, Vidal teamed up with fellow broker Bruce Wettenstein in 1993; the company will celebrate its 50th anniversary on Oct. 2.
Q: Why did it make sense to team up with Bruce Wettenstein?
A: Bruce and I have been partners for 25 years. I founded the company in 1968 and we had almost 18 people working with us, and I felt that there was a better way. I embarked on a creating a partnership model that would result in a company where those in the company have skin in the game. We put together a plan that worked, and Bruce was the first one on board. Bruce is very successful in the industrial market. He was responsible for a major development in Stratford and was hired as leasing director, and leased himself out of a job. I had known Bruce through doing deals over the years and encouraged him to come on board. Now we have five partners with a variety of skill sets, some focused on investment, some on office properties. There’s complementary skill sets in the firm.
Q: What was your introduction to commercial real estate industry?
A: It was a much different marketplace 50 years ago. The only opportunity to serve the needs of the business community beyond our town borders was not to get involved in the residential real estate market, which was very self-contained at that time. Each town had its own MLS. Many of the clients I had were referrals from residential people, so we decided to focus on commercial and investment properties.
Our sphere of influence is from New Haven down to Norwalk. What’s changed over the years is really the requirements of the clients. So many of these industrial buildings in lower Fairfield County were scraped for development of office and retail buildings. Stamford has changed its complexion over the years, focusing on office real estate, but most of the conversions have been done.
Now what we’re starting to see is a rise in the (industrial) rent rates where it now warrants ground-up construction. And there’s been a change in the way industrial users use their space: vertical as opposed to horizontal. Buildings that have a minimum of 18- and 20-foot ceilings are in very high demand and in shortage. And the office market is facing some stress in Stamford and Norwalk, especially in the central business district area. What we’re seeing in terms of the appetite is much smaller space users, 5,000 square feet and under. There’s much less demand for space that’s in excess of 10,000 to 15,000 square feet.
Q: Are you seeing any major movements in office rents in specific towns?
A: In some of the smaller communities, rents have continued to rise and it’s driven by the demand for smaller spaces. Those have kept pace at a minimum with the CPI. Central business district rents have not grown over the years. About 25 years ago, I leased 25,000 square feet to a major corporation in Westport at $24 a square foot. Today that space is leasing for $28 to $30 per square foot. If you factor in the length of time, the effective rents have gone down now.
Q: Do you expect there will be more office conversions into medical offices and multifamily properties?
A: I do think the latter is going to continue. They’re going to reposition some of these buildings into apartments, which really is the hot spot at the moment. And the Millennials are driving that. They want to be close to public transportation and walking distances to amenities, restaurants, shopping and health clubs, and they are less inclined to even have a car. They’d rather be within walking distance to amenities, and it’s given rise to what we call the transit-oriented districts where apartment development is encouraged within a one-mile radius of a railroad station.
Q: What’s going to happen to vacant retail big-box spaces?
A: It’s an interesting time for folks who own large retail projects, because they are going to need to reposition them. Our involvement with retail properties is usually when we’re selling them as an investment. Boutique buildings where you were getting $130 per foot in Westport, now you have six to eight buildings up for lease on Main Street and rents are subsiding somewhat. We just completed a deal in Westport at $110 (per square foot). We do believe the boutique stores will do OK. The larger stores which are most affected by e-commerce, and companies that own these shopping centers, there’s scrambling to determine a repositioning of those centers. Some of them are reaching out to the health clubs.
Q: What about self-storage conversions?
A: There are quite a few facilities coming online: three in Stratford, a couple in Norwalk. The question then becomes: are we becoming over-stored? That may not be the best way to go.
Q: What are the hallmarks of a successful broker?
A: You need to have a broad background, and you need to be patient and persistent. Over the years, folks in the brokerage business like myself are becoming more transaction facilitators versus site selection (specialists). The complexity of the transactions has changed dramatically over the years. You need to know about environmental, financing, construction, demographics.
You need to get your arms around the company you’re dealing with: why it needs to be in a certain location. Usually that’ll drive the location. But bringing the transaction home, whether it’s a lease or purchase, involves a myriad of complexities that even 20 years ago didn’t exist. If I were interviewing somebody coming into this business, that would be my emphasis.
Vidal’s Five Favorite Things About Connecticut:
- Excellent quality of life
- Proximity to New York City and to the other New England states
- Numerous renowned colleges and universities
- Vibrant business and cultural centers
- Variety of landscapes: rolling hills, forests and shoreline
