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CCRC Project Begins to Move Ahead
By Eric Peterson
Last updated: March 1, 2006 08:04am
(To read more on the multifamily market, click here.)

MORRIS TWP., NJ-It’s been five years in the making, but the continuing care retirement community planned by the Order of Saint Benedict (Saint Mary’s Abbey) is finally moving ahead. And the project has gotten some seed money to help it along.

That seed money, in an unspecified amount, was arranged by the Southport, CT-based Herbert J. Sims & Co., an investment bank focused on providing financing for the senior living industry. “The round of seed money was raised through a private placement with our high-net-worth client base,” says Sims’ John Minehan. “The money, along with funds from developer RLS [Retirement Living Services] LLC and Saint Mary’s Abbey, will help cover the cost of obtaining permits and approvals, architect and engineering fees and the cost of marketing the independent living units.”

After gaining initial site plan approvals in 2001, Abbey Woods, as the project is named, has been delayed by master planning and environmental issues, by controversial sewer hookups from neighboring Morristown and by the site’s proximity to Jockey Hollow, a national historic site dating to the Revolution. The Order of Saint Benedict is sponsoring the 41-acre community, with the Hartford-based RLS coordinating the development process for the Order.

Plans call for a total of 176 independent-living apartments, along with 38 independent-living cottages, 24 assisted-living residences and 48 skilled-nursing beds. The residences would rise on 41 acres within the Order’s larger 380-acre site. Some 100 acres would be preserved as passive open space, and another 30 acres would be set aside as active open space. The remainder of the site is occupied by the campus of Delbarton Preparatory School, operated by the Order, and by Saint Mary’s Abbey.

“The community will fill a strong demand on the part of adults for market-rate CCRC residences,” Minehan says. “It’s a great setting.” Current plans call Abbey Woods to be completed by sometime in 2008. An original price tag of approximately $40 million was placed on the project in 2001, but current estimates haven’t been released.

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Owner Secures $10M Refinancing for Two Industrial Buildings
By Eric Peterson
Last updated: February 28, 2006 10:45am
(To read more on the industrial market and the debt and equity markets, click here.)

SECAUCUS, NJ-Bhasin Development has received a $9.52 million refinancing for its 801 and 901 Penhorn Ave. here. The two adjacent industrial buildings total approximately 125,000 sf.
The funding was arranged for Bhasin Development by Jon Mikula, senior managing director in the Florham Park office of Holliday Fenoglio Fowler. According to Mikula, the 10-year, fixed-rate securitized loan was provided by Principal Global Investors. The loan is taking out a speculative construction loan that HFF arranged for Bhasin Development in 2003.

The two side-by-side buildings are currently 95% occupied with a mix of industrial tenants. The assets are located just off the New Jersey Turnpike approximately five miles outside of Manhattan.

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Garden Complex Trades for $7M
By Eric Peterson
Last updated: February 28, 2006 10:49am
(To read more on the multifamily market, click here.)

MATAWAN, NJ-Matawan Village, a 72-unit garden apartment unit, has been sold for $7 million, a number that factors out to approximately $97,000 per unit. The seller, who was not identified, was represented in the all-cash transaction by Vito DeGennaro, sales director for Gerber/Somma Associates, based in Hackensack.

Legal details were handled for the seller by attorneys Jerold Zaro and Melanie Scroble of the firm of Ansell, Zaro, Grimm and Aaron, Ocean Township. The New York City-based buyer, who was similarly not identified, was represented by attorney Meyer Jeger of New York City.
Built in the 1960s, Matawan Village consists of five two-story buildings on a four-plus-acre tract at 119 Morristown Rd. in this Monmouth County community, according to DeGennaro. The property is currently managed by Simon Property Management LLC, a division of the Linden-based Simon Holdings Inc.

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223 Residential Co-op Units Sell for $17M
By Eric Peterson
Last updated: February 27, 2006 02:48pm
(To read more on the multifamily market, click here.)

EAST WINDSOR, NJ-A total of 223 residential units have been sold as co-ops for a price tag of $16.5 million, or about $74,000 a unit. The sold units represent just under half of the total unit count of the 470-apartment Orchards garden complex here. The property in located in the Princeton corridor.

According to Robert Ploshnick, a managing director of Gebroe-Hammer Associates, the transaction was arranged by the Livingston-based firm's executive vice president Joel Schwartz and senior vice president Joseph Brecher. "Financing for the sale was complex and required hands-on attention to detail," Ploshnick says.

According to Ploshnick, the sale was structured as an "all-cash deal in which the buyer invested equity over and above the underlying co-op mortgage," with Gebroe-Hammer selling shares of co-op stock as opposed to selling the property as conventional real estate. Gebroe-Hammer had the listing as an exclusive.

Attorney Mark Mandell of Lake Success, NY represented the sellers, who were not identified. The buyers, who were similarly not identified, were represented by attorney Sander Strulowitz of New York City.

The overall complex of consists of 30 buildings, and its 470 units are currently 95% occupied. Upgrades of a number of the units' interiors are in the works, according to Ploshnick.

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EXCLUSIVE: Ivy Realty Buys 108,000-SF Flex Building
By Eric Peterson
Last updated: February 27, 2006 10:06am
(To read more on the industrial market, click here.)

MAHWAH, NJ-Ivy Realty Fund I LP has acquired the 108,000-sf flex building located at 211 Island Rd. here, GlobeSt.com has learned. The purchase price of $6.6 million factors out to just over $61 per sf. The pick-up takes the Montvale-based Ivy Realty's holdings within Mahwah Business Park to approximately 510,000 sf.

"The acquisition of this property is in keeping with our investment strategy of acquiring properties that have a strong long-term potential for upside growth," says David Archibald Ivy's senior investment officer. In this case, the upside growth is that the seller, Bennett Brothers, will be vacating the property shortly. Bennett Brothers is a Chicago-based fulfillment and marketing incentives company that has been using the building as its eastern distribution center.

The seller's impending departure will leave Sony Corp., which uses the property as a warehouse, as the building's remaining tenant. The space being vacated "offers tenants the ability to lease space for either office or warehouse use," Archibald says.

The acquisition also follows the announcement, last week, that Ivy had refinanced its holdings within Mahwah Business Park. As reported by GlobeSt.com, Ivy refinanced those holdings to the tune of $20 million "to convert a floating-rate loan to fixed at an attractive rate," according to Archibald. In that refinancing, Holliday Fenoglio Fowler was the broker and Aetna was the lender.

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Bank Buys 64,000-SF Warehouse
By Eric Peterson
Last updated: February 27, 2006 09:35am

(To read more on the industrial market, click here.)
BURLINGTON TWP, NJ-FMS Financial Corp., the holding company for Farmer's & Mechanic's Bank, has purchased the 64,000-sf warehouse building at 2 Manhattan Dr. within the Crossroads Business Park here. The purchase price of $3.2 million factors out to $50 per sf.
The building's seller was PPPI LP, a local group. The transaction was brokered by Bill Goodwin, an executive vice president with CB Richard Ellis in Philadelphia.

Built in 1989, the bronze brick and masonry block building sits on a 5.4-acre site near I-295 in this South Jersey township. Farmer's and Mechanic's Bank is headquartered nearby at 3 Sunset Rd. and, according to Goodwin, will use the newly acquired building for the storage of office furnishings, equipment, supplies and related banking support functions.

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Wall Street bracing for record M&A year

(AP) — The corporate mergers and acquisitions business has been so strong during the first two months of 2006 that investment bankers are predicting a record year for deals.

Analysts attribute the increase in deals in part to heightened activism among investors such as hedge funds that are pushing companies to sell off unprofitable business units. Another factor is the long-held belief that buying a competitor is the fastest way to expand a company.

"It is easier to buy something than build it from scratch," said Andrea Pericli a portfolio manager with Euclid Financial Group, a Washington, D.C.-based hedge fund. The year has already brought Boston Scientific Corp.'s $27.2 billion acquisition of Guidant Corp. and The Walt Disney Co.'s $7.4 billion purchase of Pixar Animation Studios Inc.

During the first eight weeks of the year, 4,037 deals worth $473 billion were announced, compared with 4,971 totaling $378 billion in early 2005, according to Thomson Financial, a business information company that tracks merger activity. That's the second most active start for Wall Street since early 2000, when AOL bought Time Warner in a deal then worth $182 billion and there were 6,061 transactions worth $728 billion.

Last year, bankers put together $2.7 trillion worth of announced mergers and acquisitions or about 32,900 deals, far above the 31,300 worth $1.96 trillion announced in 2004, Thomson Financial said.

The record for mergers was set in 2000, during the high-tech bubble, when bankers assembled 38,468 deals worth $3.6 trillion.

"We're very optimistic about 2006. The trends driving the markets all seem to have a fair amount of wind at their back," said Michael Boublik, a senior mergers and acquisitions investment banker at Morgan Stanley.

©Copyright 2006 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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Mack-Cali Announces Fourth Quarter Leasing Results for Northern and Centeral New Jersey Properties

Cranford, New Jersey—February 28, 2006—Mack-Cali Realty Corporation (NYSE: CLI) today announced it has completed 553,681 square feet of leasing transactions at its Northern and Central New Jersey properties during the fourth quarter. Company-wide, Mack-Cali leased over 1.1 million square feet of space during the quarter, and over 5.6 million square feet during the year.

Fourth quarter transactions already announced during the quarter include leases at Harborside Financial Center in Jersey City with Sumitomo Mitsui Banking Corporation, for 71,153 square feet, and Fred Alger & Company, for 37,785 square feet.

Other highlights of fourth quarter transactions include:

Deutsche Bank, a financial service provider, extended its lease for 90,000 square feet at Harborside Financial Center Plaza 1 in Jersey City. The 400,000 square-foot building, which recently received extensive modernizations, is located at Harborside Financial Center on the Jersey City waterfront. The 3.1 million square-foot class A office complex is 91.0 percent leased. Christopher DeLorenzo, in-house vice president of leasing, represented Mack-Cali.

National Union Fire Insurance Company of Pittsburgh, PA, a subsidiary of The American International Group, Inc., expanded by 38,507 square feet at 101 Hudson Street in Jersey City. The firm now leases 317,799 square feet in the 1.25 million square-foot class A office tower, which is 99.5% leased. Lewis Miller, Andrew Sussman and Craig Eisenhardt of CB Richard Ellis represented the tenant and Thomas Savoca, in-house director of leasing, and Christopher DeLorenzo represented Mack-Cali.

Paychex North America, Inc., a payroll services provider, leased 30,156 square feet at 30 Knightsbridge Road in Piscataway. 30 Knightsbridge Road is a 680,350 square-foot office complex that is 66.8 percent leased. Michael Maroon of The Acclaim Group, LLC represented the tenant and Diane Chayes, in-house vice president of leasing, represented Mack-Cali.
Groundwater/Environmental Services, Inc., an environmental consulting and contracting firm, leased 30,070 square feet at 1340 Campus Parkway at Monmouth Shores Corporate Park in Wall Township. The transaction is a renewal of 24,200 square feet and an expansion of 5,870 square feet. 1340 Campus Parkway is a 100 percent leased, 72,502 square-foot office/flex building. Peter Yannotta and Bryan Lisowski of Equis Corporation represented the tenant and Diane Chayes represented Mack-Cali.

Lee Hecht Harrison, a career management and consulting services provider, renewed leases for 22,336 square feet at 50 Tice Boulevard in Woodcliff Lake. The 235,000 square-foot, class A office building is 100 percent leased. Barry Saywitz of The Saywitz Company represented the tenant and Christopher DeLorenzo represented Mack-Cali.

Mack-Cali Realty Corporation is a fully-integrated, self-administered, self-managed real estate investment trust (REIT) providing management, leasing, development, construction and other tenant-related services for its class A real estate portfolio. Mack-Cali currently owns or has interests in 270 properties, primarily office and office/flex buildings located in the Northeast, totaling approximately 30 million square feet. The properties enable the Company to provide a full complement of real estate opportunities to its diverse base of approximately 2,200 tenants.
Additional information on Mack-Cali Realty Corporation is available on the Company's Web site at www.mack-cali.com.

Jones Lang LaSalle


Brandywine’s 2005 Net Income Drops as FFO Rises
By Marita Thomas
Last updated: February 27, 2006 02:50pm

PLYMOUTH MEETING, PA-Net income at locally based Brandywine Realty Trust fell $17.5 million in 2005, while funds from operations increased $9.8 million over the previous year. The decline in income was attributed to an increase in interest rates on funds, primarily for its acquisition of Prentiss Properties, which closed seven weeks ago, along with modest declines in leasing in some markets and increased utility costs, said Gerard Sweeney, president and CEO, during a conference call.

Despite this, the company met its 2005 forecast guideline in all areas. Net income for the year was $42.8 million, compared with $60.3 million for the previous year. Funds from operations ended Dec. 31, 2005 at $143.7 million, up from $133.9 million at the same time a year ago.
The REIT has approximately 693,000 sf under development at a cost of $166 million, and Sweeney said preleasing at those locations in Pennsylvania; Oakland, CA; Richmond, VA; Austin, TX; and Central New Jersey "is going well." The company plans to invest approximately $700 million in acquisitions this year to "solidify our submarkets in both legacy and new market areas," he said, referring to both the existing Brandywine portfolio and the one acquired from Prentiss.

Brandywine is also "test marketing for sale" properties in the Pennsylvania suburbs, Delaware, Southern New Jersey and Dallas, Sweeney said. Without disclosing specific properties, he estimated the pricing at $150 million with transactions taking place later in the second or third quarter.

While expressing "comfort" with properties in most areas, he referred to "storm clouds in two historically strong markets--Delaware and Southern New Jersey." In both markets several large leases are nearing expiration and not all tenants are expected to renew.
Regarding a potential JV partner for Cira Centre in Philadelphia, Sweeney said, "there’s nothing to report." He acknowledged exploring prospects and added, "We’re also looking at some other things in University City, which may play into that."

Jones Lang LaSalle


American Financial’s ’05 Revenue Jumps Nearly 63%
By Marita Thomas
Last updated: February 28, 2006 10:51am

JENKINTOWN, PA-Full-year 2005 revenue for American Financial Realty Trust shot up by $200.5 million, or 62.7%, over the year before, taking the total from continuing operations to $520.3 million on Dec. 31. As a result, the locally based financial specialty REIT paid out $132.1 million in 2005 dividends.

During a conference call, Nicholas Schorsch, president and CEO, said the company’s number of formulated price contracts increased from three to 16 during 2005 and included the acquisition of 300 bank branch properties. Under this program, the REIT agreed to buy bank branches, primarily vacated because of mergers and acquisitions.

Occupancy in AFR’s portfolio as of Dec. 31 was 86.3%, including the remaining vacant bank branches. Glenn Blumenthal, COO, noted, however, that "within 180 days of acquiring 135 vacant branches aggregating 433,000 sf for $106 million, it had sold 27 of them for an aggregate $16.3 million."

New leasing "exceeded company expectations" for the year, Schorsch said. The average rent is $29.89 per sf, which creates an annualized addition of approximately $9.4 million from rents. Referring to the company’s recent sale of five fully leased properties to Resnick Development for $301 million, Schorsch told analysts AFR planned to sell more fully leased assets along with its continuing disposition of non-core properties.

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Scopus Video Networks Inc.,
3 Independence Way, Suite 104,
Princeton NJ 08540
609-987-8091; fax, 609-987-8095.
Carlo Basile, president.
Home page: www.scopususa.com

This video networking firm more than doubled its space with a February 25 move from 100 Overlook to 7,350 square feet at 3 Independence Way. Both properties are owned by Mack-Cali Realty Corporation. Phone and fax will not change. The company does video networking - end to end solutions for broadcast, cable television, and telco industries. It is headquartered in Tel Aviv.

ZenSar Technologies Inc., 103 College Road East, Princeton 08540; 609-452-1414; fax, 609-452-0909. Aamod Wagh. Home page: www.zensar.com

The software solutions provider plans to nearly double its space with a March move from 1,400 square feet at 2 Research Way to 2,700 feet at 103 College Road East, both in National Business Parks. Based in India, it has 23 global offices.

Jones Lang LaSalle


Hoboken factory sits in city's crosshairs
Wednesday, March 01, 2006
By BONNIE FRIEDMAN
JOURNAL STAFF WRITER

HOBOKEN - D. Kwitman & Son is one of the last vestiges of the Mile Square City's industrial past.

But the factory - which has produced drapes and other home furnishings for the past 23 years - may soon be on its way out as the City Council is expected to vote tonight on whether to use the power of eminent domain to take the property, as well as a neighboring self-storage facility, and turn it over to condominium developer Ursa/Tarragon.

The Kwitman factory sits on a quiet cobblestone stretch of Grand Street near 10th Street in what was once an area of vacant and abandoned factories and warehouses.

In 1998, a 20-block area that included the old factory was condemned and slated for redevelopment by Ursa/Tarragon, which aims to build a six-story, 150-unit building with one level of parking. In return, the developer offered givebacks including open space, a supermarket, 200 units of affordable housing and a community center and swimming pool.

City officials say they have no choice but to honor the deal or face mounting legal challenges.
"This was not the dream of the developers; this was the dream of a community advisory panel," said Councilman Michael Cricco. "The agreement was done in 1998 and the town already appreciated the reward from the plan."

But some area residents say what seemed like a no-brainer a decade ago now has to be rethought given Hoboken's red-hot real estate market.

"This area is hardly in need of economic development," said Thomas Pini, a Grand Street resident who blasted the city's plan at a public meeting held last week. "I have a great problem with two viable businesses being seized by the government and turned over to developers."

Harold Kwitman, whose family has owned the business for 70 years, said if he's forced to sell, he will likely reopen in another location. However, he doesn't know where or when, and he worries some of his several dozen employees won't be able to follow him.

"The government and real estate developers are in a close relationship, and unfortunately this is the way it is," Kwitman said.

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It began with single lot in NYC
Wednesday, March 01, 2006

Harwood Properties, the privately owned company set to develop Journal Square, has its roots in a New York City parking lot.

Wolfe Harwood and his wife, Sarah, started a hat-selling business sometime in the 1920s. But their real estate empire began soon afterward with an investment aimed at cashing in on a new-fangled technology: they purchased a parking lot at the corner of Bowery and Bayard streets in Lower Manhattan.

Seventy-five years later, the family's parking empire included 55 garages in New York City, and nearly 200 lots in the Northeast U.S. and Canada.

Samuel Harwood, Lowell's father, purchased the family's first Jersey City property in 1936 - a parking lot at the corner of Cottage Street and what is now Kennedy Boulevard.
Today, the family still owns the Square Ramp garage behind the Loew's Jersey Theater and a second parking lot on Sip Avenue.

They also have numerous real estate investments up and down the Eastern Seaboard, including being part-owners of the recently opened State Square 130-unit apartment complex and a half-block in Manhattan's theater district.

Jones Lang LaSalle


State's jobless rate nears national level
Wednesday, March 01, 2006
BY DAVID SCHWAB
Star-Ledger Staff

For years, state labor officials boasted New Jersey's unemployment rate was lower than the national rate, but that claim soon might not work.

For the first time in nearly three years, New Jersey's unemployment rate is approaching the national rate, as the state's economy continues to lag the nation.

Yesterday, the state Department of Labor and Workforce Development reported New Jersey's unemployment rate in January was unchanged at 4.6 percent, while payroll employment fell by 4,300 jobs. About 4 million people are employed in New Jersey.

For much of the past year, New Jersey employers added jobs at a slower pace than in years past. Meanwhile, the state's unemployment rate has gradually risen even as the nation has seen more robust job growth and a steady decline in the unemployment rate.

In January, the U.S. unemployment rate was 4.7 percent, down from 5.2 percent a year earlier. During this same period, New Jersey's unemployment has increased to 4.6 percent, from 3.9 percent.

According to the Bureau of Labor Statistics, the last time New Jersey's unemployment rate was higher than the national rate was in March 2003, when the rate was 6.1 percent in New Jersey and 6 percent in the United States.

Some experts said the situation for many workers in New Jersey is probably worse than the unemployment figures suggest, in part because many who can't find work stop looking and are no longer officially counted as among the unemployed.

"The less-skilled and less-educated workers in the state end up having a more difficult time finding employment," said William Rodgers, chief economist at the Heldrich Center for Workforce Development at Rutgers University in New Brunswick and a former chief economist of the U.S. Department of Labor.

In a statement, David Socolow, the acting state labor commissioner, said the latest employment figures "confirm the importance" of Gov. Jon Corzine's "commitment to statewide economic development."

State officials and other experts agree that even though the state's economy is growing, New Jersey companies haven't added as many jobs as they have in years past. Meanwhile, many of the jobs are lower-paying service positions rather than higher-paying positions in fields like telecommunications and finance.

In January, the largest employment decline was in the retail trade, transportation and utilities sector, where employment fell by 7,700 jobs. Manufacturing employment declined by 2,300 jobs.

The biggest increase in employment was in the government sector, where payrolls grew by 3,200. Some economists have warned government accounted for a disproportionate amount of added jobs.

David Schwab may be reached at dschwab@starledger.com or (973) 392-5835.

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Enzon battered, but execs put on brave face
Though Q4 loss was $285.6M, they remain optimistic about coming year
Wednesday, March 01, 2006
BY JEFF MAY
Star-Ledger Staff

Forced to write down the value of its lead antifungal product, Enzon Pharmaceuticals yesterday posted dismal results for its year- end quarter.

The drugmaker, which has its headquarters in Bridgewater, reported a net loss of $285.6 million, or $6.56 a share. That compares with a break-even quarter a year ago.
Company officials tried to soften the news with optimistic projections for the current year. Jeffrey Buchalter, who became chief executive in late 2004, said he had spent the past year refocusing Enzon's operations. Among other changes, the company now reports its business in three segments instead of one and has shifted to a fiscal year that coincides with the calendar year.

"This quarter, we are really closing a chapter on the old Enzon, and opening a new chapter on the new Enzon," Chief Financial Officer Craig Tooman said on a conference call with analysts.
Enzon recorded $284 million worth of write-offs and loss of goodwill in the quarter due to disappointing sales of Abelcet, an antifungal treatment administered intravenously to patients with compromised immune systems. Sales of the product slid from $14.3 million a year ago to just under $10 million in the most recent quarter, a 30 percent drop.

"The antifungal marketplace is both crowded and competitive," Buchalter said on the call. "We recognize the ongoing challenges in this market."

The company also suffered a lesser slip in its No. 2 product from a year ago, Adagen.

Overall, quarterly revenue dropped 31 percent, to $29.7 million, on a year-over-year basis. The lone analyst polled by Thomson Financial had expected sales of $44 million.

A change in the accounting of royalty payments by pharmaceutical partners accounted for some of the shortfall. The company had previously recorded royalties on an estimated basis, but the calculations were often inexact and subject to revision. In the year-end quarter, Enzon shifted to a system that records royalties only when payments are actually made.

Despite the decline in sales for the quarter, Buchalter highlighted two cancer treatments that showed promising growth, and said the company would now be "oncology-focused." He predicted product sales of more than $100 million in the current year, despite the disappointing performance of Abelcet.

"2006 is about execution, and you're going to see that this year," Buchalter said.

Jeff May can be reached at jmay@starledger.com or (973) 392-4282.

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3M buys Hanover company
02/28/06 - Posted from the Daily Record newsroom
BY EDMOND LOCOCO
BLOOMBERG NEWS

3M Co., a maker of more than 50,000 products, agreed to acquire General Industrial Diamond Co., a manufacturer of super-abrasive grinding wheels and related tools. Terms weren't disclosed.

General Industrial Diamond, based in the Whippany section of Hanover, has about 100 employees split between there and a plant in Montrose, Colo.

The company declined to comment about the deal, which expected to close later this month.
3M spokeswoman Donna Fleming declined to say how the deal would affect the Hanover company's workers except that the company would be "fully integrated" into 3M's abrasive systems division.

Fleming said she couldn't provide last year's sales figures for closely held General Industrial.
The acquisition will be added to 3M's abrasive systems division, the business on which the company was founded in 1902. The division is part of 3M's industrial group, which had sales of $3.8 billion, or 18 percent of the company's total of $21.2 billion last year. The industrial group was combined with 3M's transportation business in January.

General Industrial makes tools for hard-to-grind materials, including ceramics, stone and glass, Fleming said.

Shares of 3M fell 10 cents to close at $73.59 on Tuesday. They have dropped 12 percent in the past year.

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Morristown edges closer to Spring Street solution
03/1/06 - Posted from the Daily Record newsroom
Council signs on with developer to raze properties, build housing
BY ROB SEMAN
DAILY RECORD

MORRISTOWN -- Town council Tuesday took a step toward redeveloping the upper portion of Spring Street by temporarily appointing Scotto Holdings as the official developer.
The company presented a conceptual plan to the council Tuesday, that includes razing the dilapidated buildings on Spring Street from the corner of Morris Street to Center Street and Water Avenue, and replacing them with three buildings housing a mix of retail, residential and parking space.

The council approved mayor Donald Cresitello's suggestion to make Scotto the redevelopment company for 90 days in order to allow residents to "digest"the conceptual plan. That designation will be extended as progress is made, he said.

The three buildings would house 275-300 dwelling units, either apartments or townhouses, enough space for 1.5 cars per unit, and 50,000 square feet of ground-floor retail space. The parking spaces for the residents of the buildings would be in garages inside the buildings.
The tallest building would be at Morris Street and Spring, backing the Presbyterian Church property, rising eight stories at that corner and descending to six stories down Spring Street. The building across the street would go from seven stories to five stories in the same direction. The building at Spring and Water streets would be seven stories.

An opening between the two buildings backing the cemetery of the Presbyterian Church was included in order to preserve the community's access to the green area.

Architect Allen Kopelson, whose firm designed the plan, said that the project has been in the works for the last three years and has involved many discussions with neighbors.
The plan also calls for changes to the lanes on Spring Street as well as entrances to the shopping plaza on Morris Street at Spring Street, to ease problems with cars turning in and out of the plaza.

Councilman Dick Tighe said the proposal would help bring down a "Chinese Wall," that has separated the Spring Street area from the rest of the town.

"I think this project brings Spring Street back into town," Tighe said.
Councilman Timothy Jackson said he had previously expressed concerns about disturbing the historic, 18th Century church during redeveloping the area, but said the Scotto plan took those concerns into consideration.

"I'm very happy to see it is being surrounded, not invaded by this," he said.
The council must now draw up a redevelopment plan that outlines what can be built in the area, to which the developers will tailor their concept.

The Scotto company received planning board approval on Aug. 26, 2002 to build an all-residential seven-story, 40-unit apartment building in place of buildings at 30, 32 and 33 Spring St. However, the developers never sought permits for the project. Earlier this month, the planning board gave the Scottos a one year extension to Feb. 1, 2007 to apply for the permits.
Craig Brinster, a real estate specialist for Scotto, said prior to the meeting that project will likely be scrapped altogether in place of the proposal.

Rob Seman can be reached at (973) 267-9038 or rseman@gannett.com.

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Economic reports a mixed bag
Wednesday, March 1, 2006
By JEANNINE AVERSA
ASSOCIATED PRESS

WASHINGTON -- The economy, which stubbed its toe in the final quarter of 2005, is probably back on firm footing in the opening quarter of this year despite a cooling housing market and somewhat skittish consumers.

After digesting the latest batch of economic reports, released Tuesday, analysts predicted that economic activity is rebounding nicely in the January-to-March quarter and will grow by at least a 4.5 percent rate. For all of 2006, the economy will log another year of solid -- though slower -- growth, they said.

"The economy is doing pretty well now in terms of momentum," said Brian Bethune, economist at Global Insight.

But on Wall Street, the economic news unnerved investors and sent stocks tumbling. The Dow Jones industrials lost 104.14 points to close at 10,993.41.

The economy ended 2005 on wobbly footing, expanding at an annual rate of just 1.6 percent in the October-to-December quarter, the worst showing in three years, the Commerce Department said.

While slightly better than the first estimate of a 1.1 percent growth rate for the quarter, the new figure still showed a loss of momentum from the third quarter's brisk 4.1 percent pace. The slowdown was blamed on lingering fallout from the Gulf Coast hurricanes and the toll of lofty energy prices, which especially caused consumers to tighten their belts.

Another report provided further evidence that the housing market, which posted record- high sales five years in a row, has lost its sizzle.

Sales of previously owned homes dropped 2.8 percent in January to a rate of 6.56 million units, the slowest pace in two years, according to the National Association of Realtors.

A third report showed consumers' confidence in the economy dipped in February to 101.7, from 106.8 in January, the Conference Board said. People are anxious about economic conditions over the next six months, the report showed. Their assessment of current conditions, however, held steady at a 4½-year high.

"Consumers remained optimistic about their present situation, but going forward, sentiment is a bit shaky," said Sherry Cooper, chief economist at BMO Nesbitt Burns.

Other recent economic barometers -- including retail sales and jobs -- suggested the economy did start bouncing back at the beginning of this year.

The nation's unemployment rate dropped to 4.7 percent in January, the lowest in 4½ years.
But that hasn't helped President Bush's standing with the public. The president's job approval rating sank to 34 percent, the lowest since he took office in 2001, according to a CBS News poll conducted last week.

Businesses investment in equipment and software, export growth and inventory building by companies all turned out to be better than first estimated, leading to the higher reading on gross domestic product in the final quarter of 2005. Less deep cuts in government spending also contributed to the upgraded GDP reading.

GDP measures the value of all goods and services produced within the United States and is the best measure of the country's economic fitness.

Consumer spending -- usually a main force of economic activity -- rose at a rate of just 1.2 percent in the final quarter of 2005, the slowest since the second quarter of 2001. Analysts predict consumer spending is reviving in the current quarter.

But for all of 2006, they believe consumer spending won't be as strong as it was last year. The cooling housing market and the expectation that owners won't be seeing huge gains in the value of their homes figure prominently in this scenario of a more subdued consumer. The toll of rising interest rates and elevated energy costs also play roles.

Any moderation in consumer spending in 2006 as a whole, however, is expected to be offset by stronger business investment and growth in other parts of the economy, analysts said.
The economy is expected to grow by a respectable 3.3 percent this year, slightly below last year's 3.5 percent gain.

To keep the economy and inflation on an even keel, Federal Reserve Chairman Ben Bernanke will probably boost interest rates on March 28 and perhaps again on May 10, analysts said.
Economists believe the Fed's nearly two-year-long credit tightening campaign will come to an end this year.

Copyright © 2006 North Jersey Media Group Inc.

Jones Lang LaSalle


Vornado Reports Results
PARAMUS, N.J.--(BUSINESS WIRE)--Feb. 28, 2006--VORNADO REALTY TRUST (New York Stock Exchange: VNO) today reported:

Year Ended December 31, 2005 Results

NET INCOME applicable to common shares for the year ended December 31, 2005 was $493.1 million, or $3.50 per diluted share, versus $571.0 million, or $4.35 per diluted share, for the year ended December 31, 2004. Net income for the year ended December 31, 2005 includes (i) $40.5 million for the Company's share of Toys "R" Us net loss for the period from July 21, 2005 (date of acquisition) through October 29, 2005, offset by, (ii) $34.5 million of net gains on sale of real estate and (iii) certain other items that affect comparability which are listed in the table on the following page. Net income for the year ended December 31, 2004 includes $75.8 million of net gains on sale of real estate, as well as certain other items that affect comparability which are listed in the table on the following page. The aggregate of these items, net of minority interest, increased net income by $98.6 million, or $.68 per diluted share for the year ended December 31, 2005 and by $180.2 million, or $1.35 per diluted share for the year ended December 31, 2004.

FUNDS FROM OPERATIONS applicable to common shares plus assumed conversions (FFO) for the year ended December 31, 2005 was $757.2 million, or $5.21 per diluted share, compared to $750.0 million, or $5.63 per diluted share, for the prior year. Adjusting FFO for the Company's share of Toys "R" Us negative FFO of $32.9 million and for certain other items that affect comparability which are listed in the table on the following page, FFO for the years ended December 31, 2005 and 2004 were $689.4 million and $639.1 million, or $4.75 and $4.80 per share, respectively.

Quarter Ended December 31, 2005 Results

Net income applicable to common shares for the quarter ended December 31, 2005 was $105.7 million, or $.71 per diluted share, versus $233.6 million, or $1.73 per diluted share, for the quarter ended December 31, 2004. Net income for the quarter ended December 31, 2005 includes $40.0 million for the Company's share of Toys "R" Us net loss, recorded on a one quarter lag basis, for their third quarter ended October 29, 2005 and certain other items that affect comparability which are listed in the table on the following page. Net income for the quarter ended December 31, 2004 includes certain items that affect comparability which are listed in the table on the following page. The aggregate of these items, net of minority interest, increased net income by $3.1 million or $.02 per diluted share for the quarter ended December 31, 2005 and increased net income by $133.7 million of $0.99 per diluted share for the quarter ended December 31, 2004.

FFO for the quarter ended December 31, 2005 was $194.1 million, or $1.26 per diluted share, compared to $299.4 million, or $2.22 per diluted share, for the prior year's quarter. Adjusting FFO for the Company's share of Toys "R" Us negative FFO of $33.4 million and for certain other items that affect comparability which are listed in the table on the following page, FFO for the quarters ended December 31, 2005 and 2004 were $190.6 million and $165.7 million, or $1.24 and $1.23 per share, respectively.

Jones Lang LaSalle


Kritzmacher named CFO at Lucent Technologies

BERKELEY HEIGHTS -- Lucent Technologies Inc., the telecommunications equipment maker, said Tuesday that controller John A. Kritzmacher has become its chief financial officer.
Kritzmacher, 45, has been Lucent's corporate controller since 2001. As CFO, he succeeds Frank D'Amelio, who became Lucent's chief operating officer in January.

As finance chief, Kritzmacher will be responsible for all of Lucent's financial operations, including corporate accounting and financial planning. He will report directly to Chairwoman and CEO Patricia Russo.

Lucent credits Kritzmacher with having played a key role in leading the company's financial recovery. Lucent cut about $5 billion in annual operating expenses and generated its first full year of profitability in fiscal 2004 after three years of losses.

Jones Lang LaSalle


A New Newark Moves Closer to Reality
Square Feet
March 1, 2006
By LISA CHAMBERLAIN

NEWARK, Feb. 22 — Cities across the country have struggled to reinvent their waterfronts as manufacturing uses dropped off drastically, but few cities have struggled longer and harder than this one. Decades after redevelopment began on industrialized waterfronts from Baltimore to Oakland, Newark is just now seeing the start of a transformation along the Passaic River, where the city was founded in 1666.

The first part of Minish Park is under construction; it will ultimately become a 2.2-mile riverfront promenade linking downtown with Ironbound, a vibrant Portuguese and Brazilian neighborhood. A new light-rail line will open this summer, connecting Newark's Pennsylvania Station to Riverfront Stadium, the home of the minor-league Newark Bears baseball team, with a stop at the New Jersey Performing Arts Center. Other long-planned improvements — like the refurbishment of the McCarter Highway along the river and of the Amtrak bridge over the Passaic — are in various stages of completion.

All of this public investment is attracting private investment as well in an area that is mainly vacant and is cut off from downtown by the McCarter Highway.

Eight acres of long-vacant waterfront land owned by the Matrix Development Group will become the site of a mixed-use commercial development. Phase 1 includes a 14-story 430,000-square-foot commercial tower, 2 Riverfront Center. It has already secured an anchor tenant, McCarter & English, a Newark-based law firm with a long history in the community. The groundbreaking is expected later this year, and the law firm expects to move in in 2008. Later phases call for 550 units of residential housing in four low-rise buildings interspersed with green space and a 150-room hotel next to Penn Station.

"This is a transformative investment," said Richard F. X. Johnson, senior vice president of Matrix. "It's an opportunity to bring the city to the water. Two and half acres, almost a third of the entire site, will be open space and accessible to the public."

Other property owners along the Passaic River, which ultimately empties into Newark Bay, site of the Port of Newark, are hoping that a transformation is imminent, but are not yet ready to move forward. Edison Properties, which owns about an acre of land east of the Amtrak bridge, commissioned a waterfront study two years ago, but has yet to formulate any concrete plans.
"You have to have a long-term vision," said Douglas Sarini, vice president of Edison Properties, which is based in Newark. Having owned property since 1981 along the High Line in the West Village in Manhattan, which is soon to be the site of a major redevelopment project, the company is known for buying land and sitting on it until the market catches up.

Mr. Sarini says Newark is only now beginning to understand its potential, which is largely driven by its transportation infrastructure, including close proximity to Newark Liberty International Airport; New Jersey Transit, Amtrak and PATH trains; and major highways, many of which converge along the waterfront near Penn Station.

"Newark has the infrastructure to attract a combination of entertainment, residential and commercial to the waterfront," Mr. Sarini continued. "It's going to take time, but you'll see a unique waterfront on both sides of the Passaic River, with residential in Harrison and more mixed-use on the Newark side."

Indeed, the city of Harrison — just across the river, which is about 400 feet wide and is traversable by two pedestrian bridges — is further along with its waterfront redevelopment plans.

The MetroCentre development in Harrison, when completed, will encompass three million square feet of Class A office space, 500,000 square feet of retail space and about 4,000 housing units. At the center of the initial phase are a new 20,000-seat soccer stadium, which will be home to the MetroStars, and 900 units of housing; these projects are to start this year.
"When we got involved in this project, the confidence in the market wasn't as strong as it is now," said Greg Senkevitch, chief operating officer of the Advance Realty Group, the developer of the site in Harrison. "The vibrancy of Newark has increased dramatically."

Norman Baker, managing principal of Newmark Knight Frank, leased more than 16,000 square feet of office space in Newark to the MetroStars and its parent company, AEG New York Soccer Inc., at 2 Penn Plaza East, which overlooks the stadium site across the river.

"They'll construct a private box similar to what they're trying to sell at the stadium; that will be a showpiece" for sales of stadium accommodations, said Mr. Baker, who has worked in Newark since 1972. "But until the esplanade along the river is done, they're a ways off from breaking ground on residential on the Newark side."

Getting more people and activity along the waterfront cannot happen soon enough for Lawrence Goldman, president and chief executive of the New Jersey Performing Arts Center, which opened near the waterfront in 1997 after a decade of planning.

"The whole reason we are here is because of the Passaic riverfront," Mr. Goldman said. "The idea was to reconnect Newark to its historic beginning. The key is activating the waterfront and giving people a reason to come out of Penn Station and move along the river." According to a study conducted by the Trust for Public Land, Newark has only 2.9 acres of park per 1,000 people, whereas New York City has 4.6 acres, and the national average for urban areas is 7.5 acres per 1,000.

Mr. Goldman hopes to announce plans to build a pedestrian bridge from the arts center over the McCarter Highway to the riverfront within the next few months. "Not your garden-variety crossing, but a crossing that will be a magnet of activity," he said. "We're working hard on a design and surrounding amenities to link it downtown and to the riverfront. This is Newark's one shot to really bring that river back to life."

Copyright 2006The New York Times

Jones Lang LaSalle


Grubb & Ellis Realty Advisors Lists on AmEx
February 28, 2006
By Suzann D. Silverman, Editor-in-Chief

Dennis Yeskey
A new company formed by Grubb & Ellis Co. today listed on the American Stock Exchange. Grubb & Ellis Realty Advisors Inc. is structured as a blank-check company and is intended for acquisition of commercial real estate assets "through a purchase, asset acquisition or other business combination," according to a release from the already public real estate services company, which declined to elaborate further because it is in a quiet period.

At the end of its first day of trading, the company had sold a volume of 1.5 million shares, closing at $6.10 per share. It had expected to list 20.8 million shares at $6 per share, for a total of about $125 million (although 1.7 million of those shares were to be offered to Kojaian Ventures L.L.C., an affiliate of Grubb & Ellis chairman Michael Kojaian), according to its prospectus. While Grubb & Ellis provided the capital needed to go public, according to the prospectus, Grubb & Ellis Realty Advisors will have, for investment only, the capital it raises in the public markets, plus a revolving credit facility with Deutsche Bank Trust Co. Americas for $150 million. For that reason, it expects at least initially to make just one investment, the prospectus specified.

The entity represents an unusual approach to investment for a service provider, according to Deloitte & Touche national director of real estate capital markets Dennis Yeskey (pictured). While many other service providers or their personnel invest directly in real estate, some alongside clients, such investments are structured as private transactions. "It's the first one I've heard of as an IPO," he told CPN this afternoon. But then, Grubb & Ellis has a history of being a more "unusual" play, he said. "At one point, it was the hottest stock on the stock exchange."
The company, which claimed not to have any potential investments targeted, stated as its focus industrial or office property in secondary or tertiary markets or the suburban areas surrounding major metropolitan CBDs. For the time being, it will be operated by Grubb & Ellis personnel, with deals transacted by Grubb & Ellis brokers and acquired assets managed by affiliated Grubb & Ellis Management Services Inc.

Deutsche Bank Securities Inc. was lead manager and sole bookrunner on the deal.

Jones Lang LaSalle


iStar Financial profit falls short of forecasts

by Mary Sisson February 28, 2006
The Manhattan-based commercial real-estate finance firm's earnings were driven lower by higher costs and expenses.

Shares of iStar Financial Inc. slumped in morning trading Tuesday after the Manhattan-based commercial real-estate finance firm announced lower-than-expected quarterly earnings. iStar shares declined as much as 0.9%, to $37.90, in morning trading on the New York Stock Exchange. For the quarter ended Dec. 31, 2005, iStar earned $70 million, or 60 cents a share, compared with $117 million, or $1.02 a share, in the year-earleir period. iStar’s adjusted earnings for the quarter were 81 cents per share, below the 82 cents to 89 cents per share forecast by analysts.

Higher interest expense and general and administrative costs contributed to the lower-than-expected quarterly results. iStar also missed its own forecast for the full year. The company earned $246 million, or $2.11 per share, in 2005, down from its projection for a profit of between $2.25 and $2.60 per share. It's adjusted earnings of $3.36 a share were in line with Wall Street estimates. Looking ahead, the company increased its quarterly dividend by 5% to 77 cents a share and reiterated its earnings outlook of between $2.35 and $2.50 per share in 2006.

Jones Lang LaSalle


Parsippany gets plan for condos, temple
Tuesday, February 28, 2006
BY AL FRANK
Star-Ledger Staff

Those old steel bones that have served as an accidental landmark along Route 80 in Parsippany for 17 years may finally come to life.

A Warren County developer has filed plans with the township that would transform the four-story hulk of rusting steel into two-bedroom condominiums and add two other buildings for 90 apartments in all.

Given the site's visibility to thousands of motorists daily, the project will provide a "tremendous aesthetic improvement," applicant J.G. Petrucci Co. said in a filing with the board of adjustment.
The immediate neighbor to the L-shaped lot readily agreed.

"I'd be happy to see something done there because nothing has happened for so long," said the Rev. Donald Bragg, pastor of Parsippany Presbyterian Church.

Bragg was equally welcoming to a proposal for a Hindu temple on another parcel that adjoins the historic church.

Plans filed with the township by the International Swaminarayan Organization propose a 12,200-square-foot building with three shikaras, or towers, topped by flags. The design also shows six domes, one on either side of the roof and four above the temple's portico.

Both applications are awaiting hearings before the board of adjustment, which is holding hearings on a plan for another Hindu temple proposed for a warehouse on Entin Road near Lake Parsippany.

Bragg said the Route 46 temple would be no surprise in a town where 4,100 of the township's 50,000 residents are of Indian heritage, according to the 2000 U.S. Census. That's up from 753 in 1980. "We always welcome new neighbors and we believe this is the heart of Parsippany," he added.

The condominium proposal is not the first for the dormant site.

In 1998, another developer failed to bring another office plan to completion. Then, in 2002, the township was hopeful a new state law, which put a four-year time limit on abandoned construction projects, would force things to happen. The new plan arrived a year before the deadline.

The saga began in 1984, when the township planning board gave its approval to a project calling for a Bennigan's restaurant and two office buildings off eastbound Route 46 near Vail Road. The restaurant went up, as did the steel girders for the four-story office building and a foundation for a five-story office building. When the tenant defaulted, owner William Foody halted construction.

According to the current plan, the steel frame would house 40 units while the other 50 units would be housed in two three-story buildings. Also part of the project is a 3,600-square-foot club house and a pool.

Neither new homes nor houses of worship are permitted in the office zone. In addition, the temple needs a variance for its overall height of 55 feet, or 10 feet more than allowed.
The temple would include a basement with a kitchen and dining area, a prayer hall for 340 people on the first floor, where an apartment for the resident priest and his family also would be located, behind the altar. The second floor, with a balcony ringing the prayer hall, would also include a multipurpose room, classrooms and a meditation room.

Township planner John Chadwick has not yet filed a report on the condominium plan but, in comments about the temple, he said more information was needed on the temple's proposed operations. An accompanying police report also indicated more parking would be needed.
The temple's plans come as other congregations are also seeking permits to expand or build.
The zoning board is also considering plans by Christian Testimony Church, formerly on Tabor Road, to relocate its sanctuary to a former wire fabrication factory at 42 Intervale Road. The Chinese congregation began with seven families in 1980 and now has more than 300 members.
Meanwhile, a 7,600-square-foot church with a 50-foot steeple is proposed by the National Organization of the New Apostolic Church of North America for an Edwards Road lot near the Rutgers Village and Partridge Run apartment complexes. The two-story church would have 266 seats, according to the application.

Al Frank covers Parsippany. He may be reached at afrank@starledger.com or (973) 539-7910.

© 2006 The Star Ledger
© 2006 NJ.com All Rights Reserved.

Jones Lang LaSalle


Panorama Park Inc. Buys 7 Mercedes Drive for $5.2M

Campus Associates Sells 60,000-SF Building in Montvale
Campus Associates sold 7 Mercedes Drive in Montvale to Panorama Park Inc. for $5.2 million, or about $87 per square foot.

Built in 1975 on 5.9 acres, this 60,000-square-foot office building is located within a specialized economic development (SED) zone. The zone permits office use, as well as medical use, schools, and light manufacturing. The Montvale Parkway Campus is home to such corporate companies as Mercedes Benz, BMW, Hertz, Sony, The Ferolie Group and the Boro of Montvale. The location is central to the Garden State Parkway and Routes 17, 4, and 287.

The new owners plan to renovate and reposition this asset for future tenancy.
Jeff Kolodkin and Len Suskin of Grubb and Ellis represented the seller, while Gregg Kelman of GK Realty Services represented the buyer.

Jones Lang LaSalle


U.S. GDP likely to be revised to 1.6%
By Rex Nutting, MarketWatch
Last Update: 6:05 PM ET Feb 27, 2006

WASHINGTON (MarketWatch) - The U.S. economy didn't perform quite as horribly in the fourth quarter as initially portrayed.

But it still wasn't anything to cheer about.

The Commerce Department will release its second estimate of fourth-quarter gross domestic product on Tuesday at 8:30 a.m. Eastern.

Economists surveyed by MarketWatch are looking for an upward revision to 1.6% annualized growth vs. the initial estimate of 1.1%. It would still be the weakest growth in three years. See Economic Calendar.

The upward revision will mainly reflect higher inventory building, not more final sales, said James O'Sullivan, an economist for UBS.

Consumer spending and business investment will likely be revised higher marginally, while foreign trade was more of a drag than thought. Construction spending also contributed more to growth than previously assumed.

The inflation figures embedded in the GDP report won't be changed, economists say.
The weakness in the fourth quarter is only temporary, with growth bouncing back to a 5% annual pace in the current quarter, said Joseph LaVorgna, an economist for Deutsche Bank. "Much of this surge is due to unseasonably warm weather that got the quarter off to a tremendous start."

After that, economic growth will likely resume a 3% to 3.5% pace for the rest of the year, the majority say.

The GDP report will also include the government's first estimate of fourth-quarter corporate profits.

Before-tax profits likely rose 9% from the third quarter's levels after a 4% drop in the third quarter than was due to losses from the hurricanes, said Haseeb Ahmed, an economist for JPMorgan Chase. "Our forecast would put adjusted profits' share of GDP at a 39-year high of 11.1%."

Since 1970, corporate profits have averaged 8.4% of GDP.
Rex Nutting is Washington bureau chief of MarketWatch.

Jones Lang LaSalle


SPECIAL REPORT: Office or Residential? Execs Argue Diverse Downtown Priorities
February 09, 2006

A panel discussion on Downtown Manhattan's prospects as a residential community turned into a debate of sorts yesterday for top New York real estate executives to advocate different priorities for revitalizing the area.

"The more that gets developed residentially, the better Downtown is going to be," Newmark Knight Frank CEO Barry Gosin told some 250 real estate professionals, parents and others in attendance. Noting that Downtown has lost 19 million square feet of office space in the last decade to residential conversion and the Sept. 11 terrorist attacks, Gosin said, "You can still be the financial capital of the world at 85 million square feet or 90 million square feet…the sooner that downtown develops that critical mass of residents to make it a truly 24-7 environment, the better off everything will be for downtown."

Acting as a self-proclaimed devil's advocate, Kent Swig (pictured), co-chairman of
Terra Holdings and president of Swig Equities, offered a scenario including the full build-out of the World Trade Center site for commercial uses. "What we need," he said, "are newer office buildings to attract quality tenants."

After the discussion, Swig told CPN that key improvements to Downtown are being underestimated. For example, a massive, nearly complete effort to upgrade water, gas, telecommunications and other infrastructure is flying under the radar. "The reality is, you have a brand new city underground…and nobody has a clue about it," he said.

Gosin and Swig made their comments at a lunchtime panel discussion at Claremont Preparatory School, the first private school opened Downtown in 50 years. The setting was meant to underscore efforts to promote Downtown as a family-friendly residential neighborhood. Unused from 1988 to 2003, the 76-year-old building at 41 Broad St. was most recently occupied by Bank of America International.

Jones Lang LaSalle


EXCLUSIVE: CBRE Promotes Gell, Fiddle to Vice Chairman Roles
By Barbara Jarvie

Last updated: February 27, 2006 12:27pm
NEW YORK CITY-CB Richard Ellis has promoted both Brian D. Gell and Howard Fiddle to serve in the role of vice chairman. There are approximately 2,200 brokers working at CBRE, and fewer than 20 hold this rank. Both were promoted from the title of executive vice president.

Gell, a 22-year commercial real estate veteran, has spent his entire career at CB Richard Ellis and its predecessor companies and now joins the firm’s New York Tri-State Region executive leadership. Eighteen-year veteran Howard Fiddle also joins the ranks of the firm’s executive leadership in the Tri-State Region.

Gell has most recently been responsible for leasing more than one million sf of office space at 111 Eighth Ave. Other notable recent transactions include representing Ziff Brothers Investments in the leasing of 156,000 sf at 350 Park Ave.; nonprofit the Association for the Help of Retarded Children in its purchase of the 175,000-sf 83 Maiden Lane; and law firm Greenberg Traurig in a 240,000-sf expansion and renewal at 200 Park Ave. "Brian enjoys long-time, close relationships with corporate
Fiddle
and not-for-profit customers that rely on him to develop and execute their real estate strategies," says Mary Ann Tighe, CEO of CB Richard Ellis’ New York Tri-State Region. "He is equally skilled at positioning properties in the marketplace."

During the last five years, Fiddle has completed transactions comprising more than five million sf. Significant recent transactions on the agency side completed within the last 12 months include Citigroup’s 268,000-sf lease at 787 Seventh Ave. on behalf of AXA Equitable Life and Bowne’s 224,000-sf lease at 55 Water St. for Retirement Systems of Alabama. On the tenant side, Fiddle recently represented Bloomberg LP in two transactions, one for 200,000 sf in New Jersey and the other for 300,000 sf at 340 West St. "Howard is not only a star at representing tenants, he is also a leader at achieving maximum asset value on behalf of owners. His significant success at such properties as 787 Seventh Ave., 55 Water St. and 40 West 57th St. is a testament to his strengths as a top real estate professional," adds Tighe.

Jones Lang LaSalle


With a Deep-Pockets Partner, Denholtz Branches Out
The developer joins forces with Rothschild to invest in bigger and classier projects
Shankar P.
NJBIZ Staff
2/27/2006
RAHWAY

Real estate developer Steven Denholtz could see that the nationwide economic recovery had begun to buoy commercial real estate after a four-year slump. Landlords in select markets were charging more and scaling back on concessions like rebates and furnishing allowances. Denholtz knew it was time to find more capital to deploy, and to get it from deep-pocketed institutions instead of private investors. So that’s what he did.

For the last two months Denholtz has been working with a new investment partner, Rothschild Realty of New York City, and the deals are already bigger. Rothschild has committed equity of $125 million, Denholtz will bring in $55 million, and with borrowings the firm’s investment power could reach $500 million.

Until last year, Rahway-based Denholtz Associates did development jobs worth some $50 million annually. Now, renamed Denholtz Holdings, it is looking at a 2006 volume of $150 million. The firm’s average deal size has jumped from $10 million to $15 million to upwards of $25 million to $50 million. It owns a $700 million portfolio of commercial real estate of more than 7 million sq. ft. The focus is New Jersey, but Denholtz has investments in Chicago, Philadelphia and Florida.

Earlier this month Denholtz Associates made its first investment with Rothschild’s Five Arrows fund, buying a 217,000-sq.-ft., seven-story office building in downtown Atlanta for $27 million. With that, the firm’s office portfolio in Atlanta surpassed 800,000 sq. ft. Denholtz will also begin development of a five-acre site it owns in the central business district of Tampa, Fla., putting up a $30 million, 150,000-sq.-ft. office building.

"In just two months, it is very obvious to me that [Rothschild’s] understanding of the real estate industry and their network of contacts are just tremendous," says Denholtz, 51, CEO of Denholtz Associates. "It’s better than I dreamed of."

In the next two to three years, he plans to buy and develop properties in the New York-New Jersey-Philadelphia corridor, in Atlanta and across Florida.

Denholtz’s firm had raised private capital for more than 15 years. Its biggest such investor has been The Zaro Group, representing several high-net-worth investors led by Jerold Zaro, a managing partner at the law firm Ansell Zaro Grimm & Aaron in Ocean Township. Two years ago, Denholtz hired asset-management firm Legg Mason to help him tap institutional money. That search came up with GE Commercial Finance Real Estate of Stamford, Conn. Last July the two formed a joint venture in which GE Commercial committed to invest $150 million.

Denholtz says the GE joint venture was "very successful," but he still wanted more funding. Keith Getter, managing director of Stifel Nicolaus & Co., the St. Louis investment-banking firm that acquired the capital markets business from Legg Mason last December, kept on with the search. He ultimately made the Rothschild connection.

Rothschild has an unusual approach to its real estate partnerships. It is typical for real estate investment partners to form joint ventures for specific assets such as office buildings, and share the profits. But Rothschild prefers to be "aligned all the way," says Denholtz, buying into its partners’ management and operating companies too.

"We don’t invest directly in real estate; we invest in companies," says D. Pike Aloian, managing director at Rothschild in New York City. Aloian and Getter are the two Rothschild representatives on Denholtz Associates’ board; Denholtz and Zaro are the other members. While Denholtz—whose family owns the firm—has ceded some ownership control, he retains operational control.

Says Aloian: "By design, our job is to make the investments and to oversee the disposition of the proceeds, not running the company."

Over the years, Denholtz Associates made a niche for itself in turning around high-risk properties for high profit. These opportunistic plays are at one end of the investing spectrum. At the other end are so-called trophy properties with great locations and well-known tenants—the GM building in New York City, for example.

The Rothschild partnership now allows Denholtz to move up that value chain to "core plus" properties: good-quality office buildings one notch below premier office parks. These offer less upside potential but also involve much less risk than opportunistic investing.
E-mail to shankarp@njbiz.com

Jones Lang LaSalle


Garden State Gains Manufacturing Plants but Still Sees Related Job Losses

The state gained 588 manufacturing plants but still lost more than 4,866 manufacturing jobs last year, according to the 2006 New Jersey Manufacturers Register, an annual industrial guide published by Manufacturers' News in Evanston, IL.

In 2005 the Garden State hosted 11,067 manufacturing companies that generated 479,926 jobs, compared with 10,479 plants and 484,792 jobs reported a year earlier, according to the private survey. Newark and Paterson gained a total of 26 manufacturing plants in 2005, while Fairfield, Clifton, and Trenton gained 27. Many of the 588 new plants are in the medical, food, and printing and publishing industries, and most have fewer than 15 workers.

Some 7,474 plants, or 67% of the total, are located in the nine-county northeast region of the state. The area also gained 375 plants in 2005, or 64% of total plant gains. The top three manufacturing segments in the state are printing and publishing, which added 154 plants; industrial machinery and equipment, which gained 49 facilities; and metal fabricating, which grew by 38 factories. The three segments account for a total of 4,389 plants, or 40% of New Jersey manufacturers. - Martin C. Daks

Jones Lang LaSalle


Chicago’s GTCR Closes Purchase of N.J. Crafts Maker

GTCR Golder Rauner, a private equity firm in Chicago, announced today that it has wrapped up its management buyout of Clifton-based EK Success for an undisclosed amount.

Also, as previously announced, the firm and EK Success have entered into a deal with Martha Stewart Living Omnimedia (MSLO) to manufacture, market and sell Martha Stewart Crafts products.

EK Success, a craft-products maker with about 228 employees, reports a leading market share of the fast-growing $3.0 billion scrapbooking segment, which represents about 10% of the total U.S. craft industry.

"EK's management team and employees are thrilled with our partnership with GTCR and MSLO," said CEO Chris Skinner. "GTCR's financial support and experience will be invaluable as we evaluate acquisition opportunities in the fragmented crafts industry." Vince Hemmer, a principal with GTCR, told NJBIZ that his firm is in the midst of "continual dialogue" with several companies engaged in the broad crafts sector for a possible merger with EK.

The Martha Stewart Crafts product line is to be launched with paper-based craft and scrapbooking merchandise in the first quarter of 2007. The line will be sold in the major craft chains and in independent craft stores throughout the country, as well as on the Internet.
EK has also made some executive changes. It recently hired Tom Kasvin as CFO and promoted Dan Kochenash from vice president of operations to COO. Prior to joining EK, Kasvin served as the CFO of United Pet Group, a subsidiary of Spectrum Brands. - Ki Kim

Jones Lang LaSalle


Hanover Direct Looks to Go Private

Hanover Direct (Nasdaq OTC: HNVP), a Weehawken-based home fashion and apparel retailer, has received a proposal to go private from its largest private shareholder. Chelsea Direct, which owns nearly 70% of Hanover’s common stock, has offered to purchase the remaining Hanover shares for $1.25 a share.

Chelsea owns all of the company’s preferred stock and maintains about 91% of the voting rights in the company. Company owners believe the move will halt the "financial drain" caused by Hanover remaining public.

Once the cash transaction is complete, only Chelsea and its affiliates would own stock in the company. Hanover’s board has not yet reviewed the proposal. Company shares sank $1.05 to $1.50 in noon trading. - Brian Quinlan

Jones Lang LaSalle


Wilshire Enterprises Accused of Conflicts of Interest

An investment group that wants to buy Wilshire Enterprises (Amex: WOC) has launched accusations of double-dealing and conflicts of interest against Sherry Wilzig Izak, chairman of the Newark-based real estate investment and management firm.

A letter dated today from Mercury Real Estate Advisors, a Greenwich, Conn.-based real estate investment management firm, expresses "serious concerns over the strategic direction and value destroyed by management of Wilshire Enterprises." It goes on to offer $8.50 per share in cash for all of the outstanding shares of Wilshire.

On Jan. 27, Wilshire announced it had retained a broker-dealer to look at "alternatives to maximize shareholder value," including a merger or the sale of the company. However, Mercury casts doubt on that initiative, claiming that Wilzig Izak is a "part-time member of management who is continuing to receive exorbitant compensation from the company" and is therefore not really interested in selling Wilshire. In 2004, she received $538,000 in salary and bonus, according to Wilshire's most recent annual report.

Shares of the firm gained $0.27 to $8.47 in afternoon trading. - Martin C. Daks

Jones Lang LaSalle

K Hovnanian Proposes Three Communities Totaling 310 Units
By Eric Peterson
Last updated: February 27, 2006 08:10am
(To read more on the multifamily market, click here.)

RED BANK, NJ-K Hovnanian, based here, has rolled out plans for three multifamily projects at different locations, and all three face a number of issues related to the environment, government regulations and zoning. The largest of the proposals is Four Seasons at Rockaway which, if built, would consist of 188 age-restricted townhouses, a 6,600-sf clubhouse and a variety of recreational amenities on 51 acres, according to a Hovnanian spokesman.

The site was originally proposed for Villages at Rockaway, a supermarket-anchored strip shopping center. Proposed by Wellfleet Developers Inc., it was to have combined with a residential component on an adjacent tract with an English Village-style design to create a larger mixed-use development. The Rockaway planning board approved Villages at Rockaway in 2000, but the process of getting the necessary environmental permits relating to water took so long that the potential supermarket tenant backed out, according to attorney Richard Oller, representing the site’s current ownership, citing Highlands watershed development restrictions.
Hovnanian is now under contract to buy the site from the private owner, according to Fenichel. The next step for Hovnanian is to get the site rezoned; it’s in a zone where residential use is not permitted.

The other two projects are both in Atlantic Highlands. Hovnanian has submitted a plan to build 80 condos on a six-acre waterfront site on Sandy Hook Bay, locally owned by the Giuliani family. Hovnanian’s plans for Steamer Point at Atlantic Highlands also include a 7,000-sf clubhouse facility, and would leave about three-quarters of the site as open space, according to Fenichel. Once again, the Giuliani site needs to be rezoned for residential--it’s currently in use as a boatyard.

Atlantic Highlands recently got a $250,000 grant from Monmouth County toward the borough buying the tract for preservation. According to Mayor Peter Donoghue, the borough has also gotten some funding from the New Jersey Green Acres program for the same purpose. Hovnanian has for the past year or so been at odds with local residents over a plan to build 42 residential units on another bayfront site in Atlantic Highlands. The so-called McConnell site has been the subject of a series of contentious hearings involving preservation.

Jones Lang LaSalle


LaSalle Pays $91M for Northglenn Marketplace
By John Rebchook
Last updated: February 26, 2006 07:12pm

NORTHGLENN, CO-LaSalle Investment Management Co. recently paid $91 million for the Northglenn Marketplace in this Denver suburb. LaSalle bought 439,273 sf of the 664,258-sf center, which is located 12 miles north of Denver at Interstate 25 and 104th Avenue.

The seller was its developer, longtime Denver developer Jordon Perlmutter. Garrette Matlock of Marcus & Millichap represented Perlmutter & Co. in the transaction. Matlock tells GlobeSt.com that he thinks the sale represents the largest retail deal in the Denver metro area during the past 12 months. The center, 99% leased, attracted a lot of interest.

"We had quite a few offers," Matlock tells GlobeSt.com. "Then, Jordon selected the one he wanted to go with." LaSalle bought the center on behalf of one of its funds, he says.

Ten of the 12 anchors in the 51-tenant center were part of the sale, Matlock tells GlobeSt.com. Lowe’s Home Improvement center and Mervyns own their own buildings so were not purchased by LaSalle, he notes. Tenants in the center include Bed, Bath & Beyond, Borders Books, Gart Sports, JoAnn Fabrics, Marshalls, Office Depot, Old Navy, Petsmart, Ross Dress for Less and Ulta Cosmetics. The center was built in 1999 and 2001 on the 71.6-acre site.

It originally was the Northglenn Mall, also developed by Perlmutter. He tore it down to replace it with the power center in a public-private partnership with the city of Northglenn, which kicked in $12 million in subsidies for the redevelopment.

Matlock tells GlobeSt.com it was a good time for Perlmutter to sell, considering the interest in income-producing real estate from investors. "He was getting a good value," Matlock says. Noting his reluctance to quote cap rates because different groups calculate it differently, Matlock says it sold in the low 6% range.

Matlock says that LaSalle also received a good deal. "It is a premiere center in a great location," Matlock tells GlobeSt.com. "It’s in an area that is experiencing a lot of growth. Long-term, it’s going to be a homerun for them."