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FEATURE ARTICLE, MAY 2005
INDUSTRIAL DEVELOPMENT SPOTLIGHT
Catellus Development Corporation Project
Cateret, New Jersey
Catellus Development Corp. is building a 360,000-square-foot industrial building in Cateret, N.J. Scheduled for completion in the first half of 2005, the warehouse/distribution facility sits on 25 acres, representing the first major industrial project to be built without prior lease commitments in many years at the Exit 12 corridor of the New Jersey Turnpike.
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Catellus’ new project in Cateret, N.J.
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The area seems poised for an expansion in development, according to Jules Nissim, senior director with Cushman & Wakefield of New Jersey, the leasing agency for the site.
“Dotted with obsolete industrial properties and brownfield sites, the region stretching along the New Jersey Turnpike from Exits 10 to 15 is quickly emerging as the next hot spot to watch in the state’s thriving industrial real estate market,” says Nissim. “Situated mid-way between New Jersey’s two main distribution hubs — the Meadowlands to the north and Exit 8A to the south — the area remains virtually untapped, offering extraordinary potential for new development and redevelopment.”
“Proximity to the port and Manhattan, modern facilities, and competitive pricing are already drawing tenants to the exits 10 to 15 area. Our research shows that more than 70 industrial tenants are actively seeking a combined 23 million square feet of warehouse/distribution and manufacturing space in New Jersey. Only 14.6 million square feet is currently available along the turnpike from the Meadowlands down to Exit 8A and 7A.”
Catellus also acquired an adjacent 290-acre site on which it expects to build up to 3.25 million square feet of industrial space over the next 5 to 7 years. The combined development sites are to be known as Port Reading Business Park.
“Throughout the last several years, many different uses were proposed for the site but were met with local criticism in terms of their impact on surrounding wetlands and residential neighborhoods,” says Nissim. “Catellus worked diligently from the outset to preserve the environmental integrity of the site and committed to major local road infrastructure improvements to ensure movement of trucks away from residential areas. The project, along with the approved new Exit 12 interchange, will provide a significant boost for the area. This synergy between warehouse/distribution and residential usage is working for other projects in the region as well.”
Central Crossings Business Park
Bordentown, New Jersey
In March 2005, KOR Cos. of Wall, New Jersey, began construction on Central Crossings Business Park, a 170-acre distribution project that will encompass more than 1 million square feet and is expected to be completed in March 2008. The five-buiding project is located in Middlesex County in Bordentown, N.J., with frontage on and direct access to Route 295 and is just minutes from the New Jersey Turnpike Exit 7 interchange. In addition to developing the project, KOR Cos. is serving as general contractor, along with CSR Group, which also served as the architect for the project. Cushman & Wakefield is the leasing agent for the development.
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Central Crossings Business Park.
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Central Crossings will offer flexibility and various building sizes to accomodate any operation, and for this phase of development, expects to attract tenants looking for 20,000 square feet to 500,000 square feet. In addition, the project features immediate access to the Eastern seaboard distribution network. The Southern New Jersey Light Rail Transit System will provide new light rail transit service from Trenton to Camden.
The industrial area around Exits 7 and 7A are booming, according to Harry Kantor, president and owner of KOR Cos.
“The industrial area around Exits 7A and 7 is quickly becoming the next great distribution market in the region, offering less congestion and lower operating costs than Exit 8A, which is 13 to 16 miles closer to New York City,” says Kantor. “There are now no parcels left at 8A that are big enough to handle 1 million-square-foot buildings. Exit 8A has been the top site for new construction of big box structures. Almost 4 million square feet of speculative construction was completed at 8A in 2001 and 2002.”
Kantor notes that the market in New Jersey is changing. “Central New Jersey’s manufacturing industry was hurt by an abundance of factory closings and layoffs,” says Kantor. “In Middlesex County, L’Oreal USA, Snapple Beverage, Permacel, Johnson & Johnson’s Consumer Products Co., BASF, Etienne Aigner Inc., Dow Chemical, GlaxoSmithKline, MAPAL Inc. and Simmons Bedding all announced plans to close their manufacturing facilities.”
“Nearly 11 million square feet of space was leased in Middlesex County, accounting for 40 percent of total market activity in the 10-county region. The Exit 8A submarket had 6.5 million square feet of transactions, highlighted by Barnes & Noble Inc. and Williams-Sonoma preleasing large blocks of space.”
“Nearly 40 percent of the investment sales occurred in Middlesex, where 12 buildings greater than 100,000 square feet were sold. A preference to own rather than lease facilities, fueled by historically low interest rates, was primarily responsible for the strong sales activity here.”
KOR Cos. is in the final approval stages for the second phase of Central Crossings. The second phase is made up of two warehouse/distribution buildings totaling 650,000 square feet. The company also sold a 77-acre tract of the park to a partnership of N.Y.-based Rockefeller Group Development Co.
Interstate 195 Business Park
Hamilton, New Jersey
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Interstate 195 Business Park.
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The Interstate 195 Business Park is an speculative industrial building in Hamilton, N.J. Developed by Matrix Development Group, construction has just begun on the project, which is located near interchange 3A of Interstate 195. The building will be 600,600 square feet and is expected to be completed in December 2005. Matrix is also serving as the general contractor and O’Connor Gordon Pratt Architects provided design services. The building, which will be leased upon completion, features amenities such as abundant 36-foot doors and trailer parking. Matrix is expecting to attract regional and national distribution and warehouse tenants in search of an extremely well located big box space.
“The project enjoys frontage on a fully improved interstate and is less than 3 miles from New Jersey Turnpike Interchange 7A in the center of the burgeoning Exit 7A industrial market,” notes Alec Taylor, chief operating officer of Cranbury, N.J.-based Matrix Development. “Driving this development is a highly cooperative municipality and immediate access to plentiful labor supply. In the Northeast in general, industrial tenant activity is strong, outpacing the rate of speculative development.”
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