Jones Lang LaSalle


1M-Plus SF Industrial Site Will Rise
By Eric Peterson

SOUTH BRUNSWICK, NJ-IDI is set to develop a 1.35 million-sf class A industrial building on an 88-acre site off Davidsons Mill Rd. in the New Jersey Turnpike Exit 8A submarket here. Called Middlesex Center, the spec building is slated for delivery during Q1 of 2007.

Under the terms of the development agreement, IDI, serving as the general developer of the building, has provided a forward commitment to buy the building upon shell completion by the Trammell Crow Co. "This will be a core asset for IDI in one of the best markets in the US," says Greg Ryan, the company’s vice president of acquisitions.

"Demand among users for facilities with proximity to the ports will continue to increase, but the developments under way in Northern New Jersey can only meet a portion of that demand," says Frank Petkunas, VP and regional development officer in IDI’s Philadelphia office. "And many of the available parcels are infill sites that can only accommodate smaller buildings.

"Because of the limited availability of class A inventory in North Jersey, tenants are increasingly seeking space further south along the Turnpike," Petkunas says. "In fact, an estimated 20 million sf of prospective tenant space is being pursued for expansion and consolidation."

To meet that demand, the pipeline of new projects in Central New Jersey is relatively small, according to Petkunas, and the supply of available land is shrinking. "There is nothing else comparable in size to this 1.35 million-sf building," he says. "And it’s almost a foregone conclusion that the land at 8A will be eaten up within the next three to four years."

Middlesex Center itself will be a cross-dock facility with 36-foot-clear ceiling heights, according to Petkunas. It will also feature 279 loading doors, 167 trailer stalls and two drive-in doors.

The 8A submarket itself has been a big draw in recent years, with such companies as Barnes & Noble, Costco, Home Depot, Williams-Sonoma, Crate & Barrel and Volkswagen taking space of between 600,000 to more than one million sf. The market has also been a magnet for institutional investors--ING Clarion, Allianz of America, Rreef, Morgan Stanley and TIAA-CREF have all become ownership players.

IDI itself has several other projects in the Central/South Jersey region. Among them are a 1.15-million-sf bulk distribution facility planned near Exit 7 in Bordentown; a 680,000-sf distribution facility near 8A in Cranbury, nearing completion; and the 413,000-sf 130 Interstate Blvd., an inventory building in South Brunswick.