COVER STORY, OCTOBER 2005

BUSINESS AS USUAL
Office and industrial developers in the Northeast are continuing to bring exciting new projects to market.
Kevin Jeselnik

A strong economy drives commercial development, especially in the economically dependent office and industrial sectors. If businesses are booming, there is often a wealth of new product coming to market.

As the handful of new office and industrial projects highlighted this month illustrate, there is no shortage of exciting, viable and creative developments in the strengthening Northeast markets.

Northeast Real Estate Business takes a look at four different projects — two office, two industrial — now underway that show the variety and strength of the Northeast office and industrial sectors.

Brandywine Realty Trust
Two Christina Centre — Wilmington, Delaware

Brandywine Realty Trust is developing Two Christina Centre in Wilmington, Delaware.

The success of Cira Centre along with the recognition of Wilmington as one of the Northeast's most vibrant office markets led Brandywine to develop Two Christina Centre. “We want to make that same time of architectural statement here in Wilmington [that we have in Philadelphia],” says Brandywine's James Cuorato, project executive of Two Christina Centre.

Two Christina Centre will rise approximately 20 stories on the corner of Second and King streets in downtown Wilmington near its namesake, the Christina River. The company is again working with Cesar Pelli & Associates, which is serving as design architect, working with Wilmington-based executive architect, Moeckel-Carbonell Associates. Brandywine already has two successful office buildings adjacent to the development site in Wilmington, One and Three Christina Centre.

The building will comprise approximately 450,000 square feet (Brandywine has the ability to take the total to 700,000 square feet if it chooses) with between 10,000 and 12,000 square feet of retail. The retail space will be located on the ground floor, adjacent to a park-like plaza that will open into the French Street promenade, a closed street that bisects King and Walnut streets.

A perspective of Brandywine Realty Trust's Two Christina Centre from the Christina River in Wilmington, Delaware.

When the owner of the development site, Christina Gateway Corporation, issued a request for proposal, Brandywine saw the opportunity to enhance both its presence in Wilmington and the city's cachet as a strong office market.

“We have a very strong presence in the city of Wilmington now; it's not like we are newcomers to the market,” Cuorato says. “We think the prospects for growth in that city are very strong.”

With the building's unique tapered design, first-class amenities and location, garnering interest should be easy. “We think the location is superb; it's a block away from the Amtrak station,” Cuorato says. “We really do think this will be the most spectacular building in the city of Wilmington. This will make an architectural statement and really become the new symbol of the Wilmington skyline. It's a very visible location, and we intend to take advantage of that and really make this a signature building.”

DP Partners
LogistiCenter at Logan — Gloucester, New Jersey

Reno, Nevada-based DP Partners has steadily focused on bringing its high-quality industrial product into the strong Northeast industrial market for a number of years. Now, the company is poised to make its most significant mark in what is perhaps the nation's hottest industrial market with the development of the LogistiCenter at Logan in Gloucester, New Jersey.

DP Partners acquired a 1,100-acre site 15 miles southeast of Philadelphia in Gloucester County in late June from New Castle, Delaware-based Harvey Development Company. The site is located just north of Interstate 295 and fronts Center Square Road. With 550 developable acres of land, the company carefully considered how best to utilize the property.

“This is a rare opportunity [to acquire] a large block of land with zoning and approvals; it is unique to find 550 acres zoned industrial with entitlements,” says Michael Alderman, director of leasing in DP Partners' Harrisburg, Pennsylvania, office.

The LogistiCenter at Logan offers a number of benefits other parks in the Southern New Jersey market cannot. The park is served by a rail line, SMS Rail Lines, a short-line operator with switching that connects to three of the class one railroads. According to Alderman, the variety of class one rail lines offers tenants access to competitive rail rates and the possibility of substantial savings. The park's convenient location is another benefit, approximately 100 miles from both Washington, D.C., and New York City along a major transportation corridor.

Infrastructure is in place and DP Partners plans to begin work on the first building this month, a 360,000-square-foot speculative building that will be complete spring 2006. The Class A building will feature 32-foot clear ceiling heights and a concrete-wall, rear-loading design for convenience truck access. It is ideally suited for a large-format single tenant but was designed for multi-tenancy capabilities as well.

The second facility planned for the LogistiCenter at Logan will be developed in 2006. It will include an 800,000-square-foot first phase and is expected to eventually total 1.2 million square feet of super regional distribution space. The immense size of the site allows DP Partners to pursue other projects within the park that other developers would not.

“Along with the first two developments, we also plan on building smaller, more local spec space over the next year,” Alderman explains. “That would be include 4,000- to 10,000-square-foot flex space. So, we can simultaneously pursue three different formats space on a speculative basis in this park.”

Preferred Real Estate Investments
Mid-Atlantic Corporate Center — Cranbury, New Jersey

Preferred Real Estate Investments is developing Mid-Atlantic Corporate Center on the site of the former Rhodia headquarters campus in Cranbury, New Jersey.

PREI saw in the campus the opportunity to redevelop a lushly landscaped campus with 2,000 feet of frontage along the New Jersey Turnpike in the middle of the typically industrial Exit 8 corridor of the turnpike into a premier office park tailored to headquarters facilities.

The company named the site the Mid-Atlantic Corporate Center and will initiate substantial improvement and changes to ready the wooded campus for multiple tenants.

The campus comprised 14 buildings totaling 346,917 square feet with a central plant providing HVAC services to all buildings. According to Matt Malatich, of PREI's leasing and acquisitions, the company plans to redevelop and reuse seven of the buildings, encompassing approximately 250,000 square feet into office condos. Approximately 100,000 square feet of office space will be demolished to make room for future build-to-suit opportunities that could total approximately 400,000 square feet.

Improvements among the existing properties include new independent HVAC systems for each building, renovations to interiors and new landscaping

An aerial rendering of Preferred Real Estate Investment's Mid-Atlantic Corporate Center in Cranbury, New Jersey.

The development of the new 400,000-square-foot building (pictured on the cover) will commence pending pre-leasing requirements. The wait should not be long, as PREI has already received significant interest from companies seeking to establish build-to-suit headquarters in a popular commercial market.

“For all the reasons that Exit 8A is great for industrial uses,” Malatich notes, “we think it is a superior headquarters location. There is easy access on and off the turnpike, access to shore points and the beach — which is increasingly an area in which employees are seeking to live — and it has great access to Princeton only 11 miles away.”

KOR Companies
Central Crossings Business Park — Bordentown, New Jersey

KOR Companies is developing the second phase of its Central Crossings Business Park, which will encompass 650,000 square feet of warehouse and distribution space.

“The location of the New Jersey Turnpike Exit 7 marketplace is a highly strategic choice for prospective tenants,” Kantor says. “With the saturation of the Exit 8A marketplace, this market is experiencing very high tenant interest and activity. [This market] afforded us the land to build the infrastructure needed to develop and support the local community. Exit 7 is a completely untapped market, and one of the only undeveloped areas along the turnpike corridor.” Over the past year, demand for high-quality space in this newer industrial market has spiked.

KOR is developing the 2.2 million-square-foot Central Crossings Business Park in Bordentown, New Jersey, off of Exit 7. The company acquired the 170-acre site in 2003 and completed local approvals and infrastructure. Central Crossings name illustrates the campus' proximity to a plethora of key markets and intermodal options. Central Crossings offers immediate access to the port system, including Port Elizabeth/Newark and the South Jersey/Philadelphia Port; Newark International, JFK and the Philadelphia airports; and is located in close proximity to New York City, Washington, D.C., and Boston.

Activity at the park is well underway, with KOR selling off a 77-acre tract of land to a partnership of New York-based Rockefeller Group Development Corp. and Atlanta-based IDI in 2004. The two companies often join together to develop light manufacturing and warehouse/distribution facilities in Foreign Trade Zones. Rockefeller is applying for Foreign Trade Zone status for a 1 million-square-foot development site as well as for all of the Central Crossings Business Park.

Now, Phase II of Central Crossings is moving forward, with KOR set to develop 650,000 square feet of state-of-the-art warehouse/distribution space, including a 150,000-square-foot speculative building. The buildings will offer high-bay, bulk distribution space for large consumer distributors' and third-park logistics users' needs. Buildings will feature up to 43-foot clear ceiling heights, 60-foot dolly pads, abundant trailer parking and 130 feet of maneuvering space for trucks.

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