Jones Lang LaSalle


Rutgers Plans $81M Acquisition/Conversion
By Eric Peterson
Last updated: April 27, 2006 08:44am

NEWARK-Rutgers University is set to spend $31 million to buy the lower 11 floors of the 17-story 1 Washington Park office tower and another $50 million to convert that portion of the building into a new location for its Newark campus business school. According to Stephen Diner, provost of the state university’s local campus, the purchase, now under contract, will amount to 266,500 sf, of the 400,000-sf tower.

The current owner of the building, Fidelco Realty Group of Millburn, will retain ownership of the top half-dozen floors for multi-tenant use. Fidelco, headed by Rutgers-Newark grad Marc Berson, bought the entire then-vacant building from Siete Urban Associates in September 2004 for $26.5 million, or $66 per sf. The sale price for the lower 11 floors factors out to $116 a foot.

The building went vacant in early 2003 when original tenant Verizon moved its regional headquarters across the street. After buying the asset out of default proceedings against Siete Urban Associates by Midland Loan Services, Fidelco launched a $20-million renovation program and listed the vacant space with Newmark of NJ. Gann Law Books, Conti Enterprises, Makro Technologies and North Star Academy Charter Schools have since taken small blocks of space, and the remaining vacant space is listed on Newmark Knight Frank’s website with an asking price of $23 per sf.

According to details released by Diner, Rutgers’ planned $50-million expenditure to turn its part of the building into the university’s business school will include a series of tiered lecture halls. A new pavilion in front of the building is also part of the plan, and Diner says that the university is seeking federal tax credits and other assistance to buy and convert that portion of the building. Officials on both sides say they hope to have the deal concluded this summer.

For the Rutgers Business School, the pending move may be expensive, but not far. The school currently occupies multiple buildings centered around a main building at 111 Washington St., just down the street from 1 Washington Park. According to Diner, school officials had been eyeing the building even before Fidelco bought it in 2004.

And Fidelco might have another major Rutgers-related project to deal with in this city. As reported by GlobeSt.com earlier this year, the company is one of five finalists to convert Rutgers’ long-vacant, 17-story former law school building at 15 Washington St. into apartments for graduate students. The law school had moved up the street to 123 Washington St. in 2000.