Jones Lang LaSalle

Toll Bros. 4th-Quarter Profit Soars, Tempers Outlook
By THE ASSOCIATED PRESS
Filed at 4:39 p.m. ET

PHILADELPHIA (AP) -- Toll Brothers Inc., a leading builder of luxury homes, said Thursday its fourth-quarter profit rose a record 72 percent, but cautioned that next year's profits could fall short of Wall Street's expectations as the housing market slows down.
Shares of Toll Brothers rose $1.25, or 3.6 percent, to close at $35.55 Thursday on the New York Stock Exchange.

The Horsham-based company said home sales have weakened because of a decline in confidence among its upper-income customers, a cumbersome regulatory process that constricts home building, and the housing market's inability to sustain its red-hot growth of recent years.
The company's prediction added to a growing body of evidence that the real estate market, which has helped fuel a portion of the economy's growth, was showing signs of slowing down.
The increases ''of 2004 and most of 2005 were not sustainable and were fueled in part by speculation,'' Robert Toll, chairman and chief executive, said during a conference call with analysts. ''Housing demand is returning to more normalized levels of the decade -- from 1994 to mid-2003 -- before home prices really took off in quite a few markets.''

Toll Brothers said California was its weakest market in the quarter and the only region that showed a decline in the number of closings, contracts and order backlog. The builder's strongest market was the Southeast, comprising Florida and the Carolinas.

In the mid-Atlantic states of Pennsylvania, Delaware, Maryland and Virginia, closings rose by 16 percent while contracts fell by 10 percent and the backlog went up by 5 percent.

Lawrence Horan, an analyst with Janney Montgomery Scott, said the housing market is not headed for a crash but will return to a more typical pattern of moderate growth.

''This is a soft landing,'' he said. ''Previously hot markets such as South Carolina, Las Vegas, Phoenix and Washington, D.C., that have had double-digit price increases should see modest increases'' while catch-up markets such as Texas and Denver could do better.
He said home sales are driven more by employment trends than mortgage rates, which he expects would creep up to the mid- to high-7 percent range.

For the fourth quarter, Toll Brothers recorded profits of $310.3 million, or $1.84 per share, in the three months ended Oct. 31, up from $180.6 million, or $1.11 per share, a year ago. Revenue climbed 40 percent to $2.02 billion from $1.45 billion last year.

Analysts surveyed by Thomson Financial expected earnings of $1.65 per share on sales of $2.02 billion. The company said the quarter's results were the highest for any quarter in its history.
A Credit Suisse First Boston report released Thursday said the dollar value of Toll Brother's home orders rose by 4 percent in the quarter, the slowest growth since the second quarter of 2003.

For the full year, the homebuilder's earnings doubled to $806.1 million, or $4.78 per share, from $409.1 million, or $2.52 per share, last year. Revenue rose to $5.79 billion from $3.86 billion.
Analysts forecast earnings of $4.59 per share on revenue of $5.81 billion for the year.

Horan said lower selling, general and administrative costs and higher-than-expected revenue from joint ventures helped boost Toll Brothers' quarterly profit.

For fiscal 2006, however, the homebuilder is forecasting earnings of $4.79 to $5.27 per share, including 11 cents per share for stock options expense, on revenue of $6.65 billion to $7.25 billion. Analysts expect a profit of $5.25 per share on $6.74 billion in revenue.

The company, which last month cut its 2006 sales forecast, said its outlook assumes deliveries of 9,500 to 10,200 homes, at an average price of $670,000 to $680,000 per home. It also expects $280 million to $300 million in revenue from four high-rise towers.

For fiscal 2005, it reported 8,769 homes closed at an average price of about $657,000.

On Wednesday, the UCLA Anderson Forecast, an economic research group, pointed to the decline in housing starts in October as a sign the sector is cooling.

After reporting fourth-quarter earnings that beat Wall Street's expectations on Wednesday, homebuilder Hovnanian Enterprises, of Red Bank, N.J., also noted that ''the pace of housing demand and price increases may moderate over the short term.'' However, the industry's long-term fundamentals remain solid and would boost profits for next year.

Toll said it expects ''record results'' in fiscal 2007 on expected demand and projected community growth, but noted ''these are uncertain times and results could prove better or worse than the previous guidance we gave of 20 percent growth for fiscal 2007.''

The company said it would provide more detailed guidance for fiscal 2007 later in the year. Analysts forecast a profit of $5.55 per share on revenue of about $7.4 billion.

Jones Lang LaSalle

Future Fuels Proposes 52M-Gallon Waste-to-Ethanol Plant
By Eric Peterson
Last updated: December 7, 2005 03:29pm

(To read more on the industrial market, click here.)
TOMS RIVER, NJ-Future Fuels Inc. wants to build a 52-gallon waste-to-ethanol production plant near this Ocean County community. On the financial side, the Tulsa, OK-based company, a subsidiary of the Washington, DC-based Nuclear Solutions Inc., has gotten preliminary approval for $84 million worth of tax-exempt bond financing by the New Jersey Economic Development Authority.

And while that bond financing does need to clear a few more hurdles, the preliminary approval does give the project a jumpstart. Official resolution approval by the state will enable FFI to move forward with the bond rating, with underwriting, as well as the placement process required to secure the funds. The funding will be used for the design, construction and start-up of a facility that FFI president Jack Young terms “the first of its kind.”

“We intend to build several strategically located waste-to-ethanol plants in the US,” Young says. He adds that his company is looking at sites in the Northeast, Midwest and West Coast.
FFI also recently signed an agreement to lease a six-acre site here for the plant. Terms of the signing, revealed in an 8K Informational Filing with the SEC, call for an initial 15-year term, renewal in 10-year increments up to another 90 years, in exchange for cash, equity and a 3% share of net profits. The lease agreement, with a local ownership group, also brings with it pre-approved state and local environmental permits to both operate the facility and store feedstock suitable for conversion into ethanol.

The funding and lease agreement “bring land, permits and feedstock into play in expediting the facility’s development to meet increased market demand for alternative fuels,” Young says. “Moreover, since one of the sources of feedstock is tires, we welcome the favorable consideration by the New Jersey Solid and Hazardous Waste Program Office toward our proposed facility, and toward our intended efforts to produce ethanol from waste products otherwise destined for landfills in a manner that has positive implications for the environment.” Besides the plant’s 52-million-gallon capacity, further details of the project, including its total cost, have not been released.

Jones Lang LaSalle

State Agency Will Investigate Solar Energy
By Eric Peterson
Last updated: December 7, 2005 09:43am

LYNDHURST, NJ-The Meadowlands Xanadu project, a new and expanded stadium complex for the Giants and Jets, and a variety of other massive projects planned or under way in the Meadowlands are expected to place extensive new energy demands on the region. And the New Jersey Meadowlands Commission is looking to do something about it.

The board of the NJMC, a state agency charged with overseeing both development and conservation in the region, has scheduled a meeting for Monday, Dec. 12 to consider a policy directive that would have the agency investigate the potential for a district-wide solar energy farm. According to NJMC public information officer Chris Gale, the analysis would create a plan “detailing how extensive warehouse rooftop surface and utilization of remediated landfills could support a 32-sq.-mi. solar energy farm to generate power for in-district consumption.”
Similarly, the proposed analysis would supplement a coordinated approach by the agency “to achieve more environmentally sustainable economic growth in the heart of one of the country’s largest urbanized wetlands,” Gale says.

The region encompasses some 8,400 acres of wetlands, waterways and open space within five miles of Manhattan. Besides the Xanadu and stadium projects, the docket includes several golf courses and resort hotels, office buildings, several new residential communities and more.

Jones Lang LaSalle

Mack-Cali Declares Quarterly Dividends
By Eric Peterson
Last updated: December 7, 2005 09:41am

(To read more on the debt and equity markets, click here.)
CRANFORD, NJ-The board of Mack-Cali Realty Corp., based here, has declared a cash dividend of $0.63 per common share for the period of October 1, 2005 through December 31, 2005, payable on January 13, 2006 to shareholders of record as of January 5, 2006. The pay-out indicates an annual rate of $2.52 per common share, according to officials of the REIT.

The company’s board also declared a cash dividend on its 8% Series C cumulative redeemable perpetual preferred stock ($25 liquidation value per depository share, each representing 1/100th of a share of preferred stock), equal to $0.50 per depository share for the period of October 15, 2005 through January 14, 2006. The dividend will be paid on January 17, 2006 to shareholders of record as of January 5, 2006.

The REIT’s current holdings stand at 271 properties, mostly office and office/flex in the Northeast. They total more than 30 million sf.

Jones Lang LaSalle

Researchers: New Jersey strong in science education
12/7/2005, 3:18 p.m. ET
By GEOFF MULVIHILL The Associated Press

MOUNT LAUREL, N.J. (AP) — New Jersey's science education standards are among the best in the nation, according to a study released Wednesday by a think tank that advocates a back-to-basics approach to education.

The Thomas B. Fordham Foundation gives New Jersey a "B" for its science curriculum and ranks it 10th in the nation. In similar studies in 1998 and 2000, New Jersey's science standards received "A" marks.

This year, seven states were given "A" grades while 15 received "F's." The ratings cover what students are supposed to learn, not what they do learn.
In January, the same group gave the Garden State a "D" for statewide standards in math and a "C" in English.

By contrast, the researchers looking at science standards praise New Jersey for spelling out clearly what children should learn at each grade level, offering teachers specific activities, and for not shying away from using evolution as the basis of biology classes.

State education officials did not immediately comment on the report.

Paul Gross, the main author of the study, said the good plans from across the country emphasize teaching important scientific facts rather than the process of discovering scientific information.
Educators have been paying extra attention to science in the last few years because the federal government is requiring students take standardized science tests beginning with the 2007-08 school year. Scores on those tests, like the ones required for language and math by the federal No Child Left Behind education law, will matter when it comes to federal funding for schools.

Jones Lang LaSalle

200-Key Sheraton Will Rise
By Eric Peterson
Last updated: December 6, 2005 03:01pm

(To read more on the debt and equity markets, click here.)
MT. LAUREL, NJ-Work is set to get under way on a full-service 200-room Sheraton Hotel on an eight-acre site in this South Jersey community. And the project has just gotten a boost from a $17.6-million non-recourse construction loan. The project is actually a redevelopment. The site currently contains a 100-room Ramada Inn, which will be razed to make way for the new hostelry.

The financing was arranged by the New York City-based AFC Realty Capital, an investment banking firm. The loan was placed by Michael Sonnabend, an AFC Realty Capital principal, with a subsidiary of an investment bank, which was not identified. The loan is for a four-year term and is priced based on a floating rate based on Libor.

The identity of the loan recipient and developer of the hotel was also not disclosed. A spokesman for AFC would describe the recipient only as “a Philadelphia-based development group that owns several other hotels in the market.”

According to Sonnabend, the proceeds of the funding “will be used by the owners to redevelop the property. It will also be used to pay off existing debt and to fund certain reserves.” Besides its 200 guest rooms, the new Sheraton will include 20,000 sf of meeting space, a business center, fitness center and pool, and a restaurant and bar/lounge.

Jones Lang LaSalle

Building Firm Signs 316,000-SF Lease
By Eric Peterson
Last updated: December 6, 2005 03:04pm

(To read more on the industrial market, click here.)
BRIDGEWATER, NJ-Building Materials Manufacturing Corp. has signed a lease for 316,000 sf of industrial space at 9 Finderne Ave. here. The Wayne, NJ-based maker of roofing and related products will use the space for warehousing and distribution purposes.

The owner of the asset, Mr. Bridgewater LLC, a local development group, was represented by executive vice presidents and principals Charles Fern and Joel Lubin and associate Matt Sikora of Lee & Klatskin Associates. Terms of the signing, which represents the entire one-story building, were not disclosed.

“This facility met the tenant’s needs,” says Fern, who works out of the Edison, NJ office of the Teterboro, NJ-based Lee & Klatskin. “It also provides additional land as well as rail access.”
Located near both I-287 and US Route 22, the building at 9 Finderne Ave. is currently undergoing a major renovation to make way for its new tenant, according to Fern. That project is expected to be completed by June 2006.

Jones Lang LaSalle

JLL Picks Up Leasing Assignment from Glenborough
By Eric Peterson
Last updated: December 6, 2005 10:12am

BRIDGEWATER, NJ-Glenborough Realty Trust has tapped Jones Lang LaSalle to handle the leasing assignment for two building’s within its CenterPointe at Bridgewater office campus here. The assignment is being handled by Susan Mason, senior vice president and associate Ricardo Da Cruz of JLL’s Parsippany, NJ office.

The duo will handle the leasing of the 84,000-sf CenterPointe II at 1160 Route 22 East, as well as the 96,000-sf CenterPointe IV at 1140 Route 22 East. The pair is part of a four-building, 325,000-sf campus owned by the San Mateo, CA-based Glenborough.

“It offers institutional-quality buildings with flexibility and exceptional identity,” says Mason. Amenities of the campus include a conference center, fitness facilities and food service, and blocks of space of between 1,900 and 20,000 sf are currently available, “with larger increments possible.”

CenterPointe recently saw a 65,000-sf block of sublease come off the market. As reported by GlobeSt.com, Ortho-McNeil Pharmaceutical subleased the entire CenterPointe I from PNC Bank, which had inherited and subsequently vacated the space when it bought United National Bancorp.

Jones Lang LaSalle

Productivity Rise Is Fastest in Two Years
By VIKAS BAJAJ

Productivity rose at its fastest pace in two years in the third quarter, far more quickly than earlier predicted, as output rose and labor costs fell, the government reported today.
The report eased some economists' fears of rising inflation.

As a measure of how much the economy produced per hour of work, business productivity rose 4.7 percent outside the farming sector from July to September, compared with an earlier reading of 4.1 percent, the Labor Department reported. Real hourly compensation, which adjusts wages and other benefits for inflation, fell 1.4 percent, unchanged from previous estimates.

Also today, the Commerce Department said factor orders bounced back in October, rising 2.2 percent, from a decline of 1.4 percent the month before. And the National Association of Realtors said an index that measures pending home sales for existing homes fell 3.2 percent after a decrease of 1 percent in September, providing more evidence of a housing slowdown.
The Labor Department's report indicates that the productivity boom of the last several years may have more steam left in it than Alan Greenspan, the Federal Reserve chairman, and other economists believed. Typically, productivity tends to slow in the latter parts of an economic expansion because businesses have wrung out most of the efficiencies from their operations and have to compete more aggressively for a thinning supply of employees.

For workers, however, the report shows that the rise in energy costs wiped away any advantage they received in the form of higher wages, at least for a time. Before adjusting for inflation, hourly compensation rose 3.7 percent.

Unit labor costs, which gauge how much compensation it takes to produce one unit of output, fell 1 percent in the quarter, twice as much as previously expected.

From 2000 to 2004, productivity gains averaged 3.28 percent a year, far higher than the average of 2.14 percent for the last 45 years. Those gains are one of the mains reasons cited by Mr. Greenspan and other policy makers for the ability of the United States economy to achieve long periods of growth in recent years without causing significant inflation.

Compared with the third quarter of 2004, productivity in the most recent quarter grew at a rate of 3.1 percent, real hourly compensation rose 1.2 percent and unit labor costs were up 1.8 percent, much closer to the recent trend.

Some economists noted that the report allays concerns about broader inflation outside of the recent spike in energy prices, which in the case of gasoline prices have already fallen back down.
"What this tells us is in terms of the fundamentals the road looks fine," said Brian Bethune, an economist at Global Insight, a research firm. "It doesn't look like there are a lot of hazards on the way."

Investors appeared to agree with that assessment; the Standard & Poor's 500-stock index was up 9.60 points, to 1,271.68, around midday.

Mr. Bethune said a tamer inflation outlook should prompt the Federal Reserve to stop raising short-term interest rates soon after Ben S. Bernanke takes over from Mr. Greenspan as chairman in February. The benchmark federal funds rate on overnight bank loans sits at 4 percent today, and analysts expect it will reach 4.75 before the Fed stops.

Jones Lang LaSalle


USA 11 30 05 PREACHING TO THE CONVERTERS
Peter Slatin

For condo converters, bubble talk is just so much dirty bathwater. But the prospects for a cold shower have heated up.

According to data from New York-based Real Capital Analytics, sales to converters have already more than doubled in 2005 over all of 2004, rising from $11.6 billion, for 75,000 units, to $23.9 billion for 152,000 units. For apartment sales, the growth figures are not nearly so steroidal – in fact, they are just plain healthy. Apartment sales rose from $38.7 billion for 488,000 units to $47.9 billion for 544,000 units.

We asked Real Capital Analytics to show us condo-conversion sales data and apartment sales data over the past four years (2005 data is as of Nov. 15). RCA also compared sales to condo converters and to income buyers in the 20 top markets for conversion sales. The numbers account for sales valued at $5 million or above.

Click here for Real Capital Analytics' breakdown of which markets are soaring and which are settling down.

The richest conversion market: Manhattan, where investors have plunked down $3 billion for 5,700 units this year. Price per unit? It's a 501% increase over 2004, when converters paid $500 million for 1,460 units - roughly one-fifth as much for one third the number of apartments as this year.

Sure the action is hot in Manhattan. But for sheer hyperinflation, nothing comes close to Phoenix. The desert city lured condo converters to the tune of $1.3 billion, for 11,862 units – up an astonishing 1,384% from the mere $91.9 million spent in 2004 for a paltry 961 conversion units.

Clearly, it's not just the desert air that's overheated.

Things are cooling off in some markets. Last year's busiest city, Miami, which saw $1.7 billion in condo-conversion sales (11,524 units), dropped 29% to 8th place with $1.2 billion for 8,693 units. The rest of Florida is making up for it, though: Broward County, Orlando and Tampa are second, third and fourth this year, with Tampa activity rising a dramatic 483%. Adding Jacksonville, Palm Beach and Southwest Florida gives the state seven of the top 20 markets nationwide. Phoenix rounds out the top five.

Chicago, in ninth place, saw an eye-popping 405% gain in activity, despite much talk about a condo glut. Not surprisingly, California accounts for 20% of the top 20. Its most active city is San Diego at number 11, followed immediately by L.A. and the East Bay of San Francisco, with Orange County in 15th place. The O.C. had the second-biggest boost in activity for any area, as spending grew a whopping 892%, from $41 million in 2004 to $407 million so far this year. In San Diego, where buying rocketed from $333 million in 2003 to $1.5 billion last year, dealmaking has fallen by a third to $990 million to date in 2005. The 32% drop is the largest of any market in RCA's list.

Washington's Virginia and Maryland suburbs account for another pair of high-flying markets, up 81% and 55%, respectively. Seattle saw the third-biggest surge, up 598%, from $59 million last year to $406 million. Boston, on the other hand, saw sales drop 24%, from $427 million to $324 million so far this year.

The flattest market? Las Vegas. Sales to converters fell an inconsequential 2%. But the $591 million that bought 6,823 units last year was down to $578 million, which has netted 4,847 conversion prospects this year.

"What folks don't understand is that over the next six months we'll see sales slow down," says Dan Fasulo, director of market research at RCA. The increasing purchase volume has not been driven by demand, he says, but of supply. In any marketplace, he notes, "there are only a finite number of apartments suitable for conversion." Fasulo recalls that in 2003, malls were the hot property, and "a significant percentage of malls were sold. Miami conversion sales may have slowed down because new development has exploded."

Key to the buying frenzy is the ravenous capital markets. "A couple of years ago, private money was footing the bill" for most such deals, explains Fasulo. "Now there are more and more banks in the game willing to lend, and you're seeing 90% and 100% financing." Institutional partners have also become more common. It's a situation, says Faluso,"that gives" – or should give – "a condo converter pause.

"Don't hold your breath, though – unless you're under water.

Jones Lang LaSalle

Hospital Will Build $350M Campus
By Eric Peterson
Last updated: December 3, 2005 10:12pm

PLAINSBORO, NJ-Princeton HealthCare System is planning to build an 800,000-sf medical center here to replace its existing 86-year-old University Medical Center located on Witherspoon St. in nearby Princeton. The new campus will consolidate the existing main facility and several satellite locations. Hospital officials have put a $350-million price tag on the new facility, including land, construction, medical equipment and technology and various fees.
“We are designing the new facility so that we will be well-equipped and ready to implement continuing, important changes as soon as they become available to patients,” says Jack Chamberlin chairman of the group’s board of trustees. “The improvements are part of our continuing effort to redefine care.”

The project will also trigger a series of property sales, beginning with the 160-acre site targeted for the new facility. PHCS is under contract to buy that site, which fronts Route 1, from FMC Corp. The two companies declined to disclose the sale price pending conclusion of the deal, but a source with knowledge of the negotiations puts that price in the $60-million range.

“After considering 18 locations, we chose the site for a number of reasons,” says PHCS president/CEO Barry Rabner. “Those reasons included proximity to our current location - about three miles, as well as ease of access, buildability and strategic and market considerations.”
FMC, a Philadelphia-based chemical products maker, operates a research center on the property, and is expected to maintain a presence there even after the sale is completed. According to Rabner, PHCS is working on a deal that would have FMC lease space on the property and continue its current research.

PHCS, meanwhile, has signed a letter of agreement to sell its existing medical center to Lubert-Adler Management Inc., a Philadelphia-based developer. The latter, which has a track record of major redevelopment projects, apparently plans to do the same with the property.
“The location is likely to be a multi-use site, with residential development as our primary focus,” says Lubert-Adler principal Gerald Ronon. “It may include some community-focused retail, office space and affordable housing. We are committed to understanding the community’s interests and to following its master plan concepts.”

The third possible sale involves two other properties the hospital owns in the region. PHCS officials say they are talking to Princeton University about the latter buying a rehab and nursing-care facility on nine acres on Route 206, as well as a two-acre site currently in use as a parking lot next to the existing medical center. University officials say they are looking at the two properties for new university-related housing.

The new medical center of 800,000 sf will be expandable to 1.2 million sf, under plans drawn up by hospital officials. The integrated campus will house a new 269-bed hospital and medical offices, and will provide on-site inpatient and outpatient medical and surgical services. According to Rabner it will take about three years to complete the new facility once all approvals are in place and ground is broken, with a tentative outside date of 2010.

Jones Lang LaSalle

Dornoch Buys 60,000-SF Industrial Building for $3M
By Eric Peterson
Last updated: December 5, 2005 10:05am

(To read more on the industrial market, click here.)
PATERSON, NJ-Dornoch Jasper LLC, an affiliate of the Morristown, NJ-based Dornoch Holdings, has acquired the 60,000-sf commercial warehouse at 2 Jasper St. here. The sale price of $3 million factors out to $50 per sf for the fully leased building. The identity of the seller was not disclosed. Built in 1987, the facility overlooks this city’s Great Falls.

“Currently, we are leasing the space to a bedding manufacturer, which relocated from a smaller facility in Paterson,” says Frank Macios, who, with Glen Fishman, co-founded Dornoch Holdings in late 2004. “We are also in contract to purchase the adjacent parcel at 1 Jasper St., and we are awaiting environmental clearance to close.”

Both properties are within this city’s Great Falls Historic District, for which another affiliate of the firm, Dornoch Paterson LLC, has a mixed-use development proposal on the table. According to Macios, Dornoch Paterson’s phased project calls for nearly 1,000 residential units, 60,000 sf of retail space and an 83,000-sf hotel/conference center.

And as reported by GlobeSt.com, yet another affiliate, Dornoch Ellison LLC, earlier this year bought a piece of vacant property at 75-81 Ellison St. from the City of Paterson. That site is currently being redeveloped as a public access Cablevision studio that includes a computer resource center and some 8,000 sf of ground-floor retail.

Jones Lang LaSalle

Topcon’s Sale, Lease Deals Total 74,000 SF
By Eric Peterson
Last updated: December 5, 2005 10:04am

(To read more on the industrial market, click here.)
KENILWORTH, NJ-After a series of three deals, Topcon America has rearranged its North American facilities in Pennsylvania and New Jersey. The Paramus, NJ-based subsidiary of Japan’s Topcon Corp. makes surveying, ophthalmic, GPS and industrial instruments and control products.

The series of deals was arranged by Real Estate Strategies Corp., based here. According to Andrew B. Zezas, the firm’s president, the transactions totaling 74,000 sf included the sale of Topcon America’s office and manufacturing facility and the leasing of office space in Norristown, PA. It also included the leasing of warehouse space in Bergen County, NJ.

“Topcon America realized they no longer needed their facility in Norristown,” Zezas says. “They wanted to consolidate the bulk of the company’s operations in Northern New Jersey, where its headquarters is presently located in Paramus, while keeping a small amount of office space in Norristown for employees located in that area.”

“Topcon engaged us to coordinate a plan,” says Matthew D. Kirby, Real Estate Strategies’ vice president. “These transactions marked a big step for the company.”

Jones Lang LaSalle

$12M Takes 128,000-SF Office Building
By Eric Peterson
Last updated: December 2, 2005 10:36am

HASBROUCK HEIGHTS, NJ-The New York City-based Praedium Group and the Dallas-based Lincoln Property Co. have teamed up to buy 611 Route 46 West, a 128,300-sf office building here. The two firms paid Secaucus, NJ-based Hartz Mountain Industries $11.9 million, or about $93 per sf for the asset.

Also known as 10 Mulholland Dr., the four-story asset was built in 1983 and was 50% occupied at the time of purchase. The existing tenant roster consists of a range of largely small-space users and the building has availabilities of as small as 2,600 sf.

“We plan to improve the physical appearance of the property, both interior and exterior,” says Chris Hughes, a principal at Praedium. “We also plan to increase occupancy through a focused leasing strategy targeting small and mid-sized tenants.”

“It is currently an underperforming office building in what we feel is a highly desirable location,” says Michael Taylor, senior vice president at Lincoln Property Co., which has a regional office in Edison. “We are planning to reposition this struggling class B building into a quality class A building by implementing a capital plan that includes renovations to the building façade, main lobby and all common areas.”

Jones Lang LaSalle

Apparel Distributor Signs Lease for 91,000 SF
By Eric Peterson
Last updated: December 2, 2005 10:38am

(To read more on the industrial market, click here.)
EDISON, NJ-Quizz Sportswear Inc. has signed an industrial lease for 91,200 sf at 10 Kilmer Rd. here. The company, a New York City-based distributor of apparel, will move its main distribution operation to the building from its existing location at 40 Distribution Blvd., also in this Middlesex County community.

“We were looking to consolidate our facilities and we wanted to remain in Edison,” says Bala Nambiar, vice president of Quizz. “We chose this building because of its proximity to public transportation. The railroad station is right there.”

The transaction was arranged by Stephen Elman and Bonni Heller of the East Rutherford, NJ office of Cushman & Wakefield of NJ. The terms of the signing were not disclosed.
The 10 Kilmer Rd. facility is a one-story building on 5.5 acres, owned by ProLogis. It’s one of several assets the latter owns within the Kilmer Industrial Park.