20B — May 25 - June 7, 2012 — Industrial / Distribution Centers — Mid Atlantic Real Estate Journal www.marejournal.com I NDUSTRIAL R EAL E STATE & D ISTRIBUTION C ENTERS
By Jason M. Crimmins, CCIM, SIOR, Our continued outlook is still one of growth
ndustrial/Distribution R.E. facilities have had limited overall activ- By Sidney Gable, CRE, SIOR, Sidney E. Gable Associates 2012 & 2013 will be very positive for Industrial RE I Some of the sale prices in 2012 reflect the improved prices. ie A . 2 0 0 We s t S t ewa r t
As of the first quarter of 2012, there is a noticeable delta be- tween the Northern and Cen-
available for lease (divisible) and 16-acre parcel (for sale with entitlements and existing approvals for 294,000 s/f) both located nearby to the ports of Elizabeth and Newark. This is a positive sign moving forward. In the short run, however, we may be in for a brief slow down caused by the continued concerns and tensions brewing with the Euro, rising unem- ployment in Spain and Greece and Americas decreased gov- ernment stimulus spending, and economic growth (Fitch Ratings and Oxford Econom- ics) causing consumers to have a watchful eye. Our continued outlook is still one of growth but at a modest pace. With the deepening and widening of the Panama Canal, New Jersey’s deep water ports, infrastructure (direct rail ser- vice, bulk cargo handling facili- ties, interim rail terminal, auto preparation centers, etc) and dense population our market should be relatively secure, as long as we remain competitive with other east coast ports such as Charleston and Savannah. Certain state and city incen- tives instituted by Governor Christie, quasi-governmental groups (Brick City Develop- ment Corporation for Newark, NJ) and Ted Zangari of Sills Cummis, have done an excel- lent job attracting the likes of Goya, Peapod, Prudential, Panasonic, Daily News, Camp- bell Soup, Damascus Bakery and Pearson among others. Additional contributors are the developers, such as RTD, The Rockefeller Group and ProLo- gis, Inc., which have been on the frontlines bringing quality facilities to the markets, as well as allowing New Jersey to be in the best position to com- pete for those users destined for the East Coast. JasonM. Crimmins, CCIM, SIOR is the executive vice president of The Blau & Berg Company. ■ The state-of-the-art build- ing features 112,500 s/f of warehouse/distribution cen- ter and a 10,000 s/f draught cooler room, as well as 19,500 s/f of 32-ft. clear drive-through loading space and 18,000 s/f allocated for office space. The building also features 20 loading dock positions, 124 car parking spaces, 82 truck/ trailer parking spaces, an en- closed truck service area and an on-site filling station. ■
developers have built fewer spec buildings in our region thereby reducing the inven- tory of available modern industrial bldgs. Vacancy of regional industrial space is about 8 to 8 ¼% (modern one story facilities). The average asking price is about $4.50, up from $4.00 a square foot for general industrial space. Manufacturing and lab space is approximately $6.00 to $7.00 a s/f. Many companies are look- ing in the Williamsport area. We assisted an investor to purchase a 25,000 s/f new building to enter into a lease with a tenant ( a service company). Currently the Al- lentown area has increased activity as well as Southern NJ and Delaware. Local real estate taxes have encouraged a few large distribution and warehouse companies to move to Dela- ware and New Jersey. Lib- erty Property Trust is build- ing a 150,000 s/f spec build- ing in the Allentown area. Teva is building a million s/f facility in Philadelphia. They received tax incentives from the city. (a ten year tax abatement with the city building new access roads to service the facility.) for the project, which started in September of 2011 and entailed warehouse restroom renova- tions, new lighting and 8,000 s/f of office and café space. Atlantic Realty of New Jersey, a privately held real estate development company, owns the building. KSS Architects, a full-service architecture, planning, and interior design firm with offices in Philadelphia and Princeton, N.J., served as the architect of record. In addition to general con- struction and ground-up proj- ects, River Drive, which was founded in 1989, provides con- struction and consulting servic- es to developers, management companies, end users and corpo- rations in New Jersey, southern New York and Pennsylvania in sectors including interiors, sci- ence and technology, hospitality, institutional, healthcare and retail. Since 2007, River Drive Con- struction has completed six in- dustrial facility projects within
tral industri- al markets of New Jersey. A c c o r d i n g to internal r e s e a r c h and CoStar s t a t i s t i c s , Northern NJ witnessed a negative net
ity the last three years. This should not be the case in the future. Cor- porations, to remain com- p e t i t i v e , will change
-Huton Drive -202 Corridor -Buyer- AREA -PropertyPartners -314,52s/ffor$16,200,000 /$51.51 s/f B. -190 Rittenhouse Circle -Lower Bucks County -Buyer- ActionManufacturing Company, Inc. - 1 1 8 , 2 8 2 f o r $6,125,000/$51.78 s/f C. -King of Prussia -Oaktree Capital Man- agement purchased a 50,000 s/f flex building for $2.9 mil- lion and a 56,000 s/f ware- house and distribution facil- ity for $2.5 million. We currently have two warehouse buildings under contract which we hope to settle this month. This is the worst industrial/distribution recession I have witnessed. I really believe it is behind us. Only time will tell. I feel that 2012 and 2013 will be very positive for the Industrial Real.Estate Industry. Sidney E. Gable is principal of Sidney E. Gable Associates, Inc. located in King of Prussia, PA. ■ These projects include Melissa &Doug, one of the world’s largest toy distributers; Invacare Corp., the world’s leading producer of wheelchairs, bariatric equipment designed for large and obese pa- tients and other homecare prod- ucts; Papa John’s Pizza, one of the world’s largest pizza makers; GTECH Corp., a leading gaming technology and services company; and Market Resource Packaging Corp., one of the nation’s largest contract packaging companies. “River Drive Construction maintains outstanding relation- ships with local municipalities,” said Langan. “We strictly follow local rules and regulations and by working side-by-side with the local building officials we are able to expedite these projects and complete them on time and on budget, which is a win-win for everyone.” ■ a 3.5-mile radius of Exit 8A on the New Jersey Turnpike, totaling over 3 million s/f and representing over $14 million in contracts.
Jason M. Crimmins
Sidney Gable
absorption and a slight de- crease in asking rental rates, as opposed to the Central NJ market, which has experienced an increase in leasing velocity and a rise in asking rental rates. Vacancy as a whole for the industrial NJ market also increased to ±9.9% and speculative development has been kept to a minimum (River Terminal Development’s (RTD) 189,000 s/f in South Kearny and ProLogis’ 345,000 s/f in Secaucus). The lack of available high cube industrial Class A infra- structure in the Northern NJ market is one of the reasons forcing tenants down the NJ Turnpike to the 7A and 8A corridor, providing a final destination to their ‘Flight to Quality’ path for newer, larger and better quality facilities. The other reason is cost - $7.75 psf NNN compared to $3.75 psf respectfully is an immense motivation. In the first quarter alone, tenants such as Petco inked deals of 781,300 s/f, Systemax 500,102 s/f and IDS USA 500,528 s/f. Despite these larger trans- actions, the market has been playing musical chairs to some degree but deals are still being completed. My team from The Blau & Berg Company, cel- ebrating its 80th anniversary, had a robust 1Q with over 1 million s/f of deals completed and witnessed increased de- mand in land availabilities particularly in our 30-acre site
their current facilities. Fa- cility factors to consider are ceiling heights, energy costs, (could be decreased by new construction), and location. (a site with better highway access and lower tax base etc.) Now is the time for com- panies to negotiate their lease extensions as the cur- rent real estate. prices are lower. Owners do not want a vacant facility. Importers have to review establishing facilities on both the east and west coast. Now is the time for companies to have effective operations. That is to say, vacant multi story fa- cilities, with high labor cost. R.E. loans have low interest rates, therefore it may be a wise decision to purchase a property. Over the last few years ELMWOOD PARK, NJ — River Drive Construction Co., a leading New Jersey construc- tion company based in Elm- wood Park, NJ, has announced the firm recently completed a $1.3 million renovation on a 600,000 s/f distribution center for SYNNEX Corp., a logistics and supply chain management company, in the New Jersey Turnpike Exit 8Aarea, in South Brunswick, NJ. “We’re thrilled to announce the completion of the SYNNEX project,” said Joseph Langan, President of River Drive Con- struction. “As a result of our breadth of knowledge in the industrial space and our close relationships with South Bruns- wick municipal officials, we were able to complete this high security, fast-tracked project on time and on budget. The completion of this project is another notch on our belt at Exit 8A.” River Drive Construction served as the general contractor
River Drive Construction completes $1.3 million renovation project for SYNNEX Corporation
Matrix announces completion of 150,000 s/f ROBBINSVILLE, NJ — Matrix Development Group, one of the Northeast’s most active and well-regarded real estate investment and development companies, an- nounced the completion of construction of a new 150,000 s/f build-to-suit distribution building for Ritchie & Page Distributing Company, Inc. The facility was constructed within the Matrix Business Park at Exit 7A off the New Jersey Turnpike in Robbins- ville, NJ.
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