This is a company blog used by the New Jersey Jones Lang LaSalle Team to keep track of current events within the real estate sector. All items posted on this website are originally written by other authors from various sources. This is simply used as a searchable tracking system for news we found relevant to our business.
Firm Adds Two New Divisions By Eric Peterson Last updated: March 15, 2006 10:28am (For more retail coverage, click GlobeSt.com/RETAIL.)
GLEN ROCK, NJ-The Goldstein Group, primarily a retail brokerage firm, is venturing deeper into the development and investment business with the formation of two new divisions. For one, Goldstein Development Co. will develop retail and residential properties, as well as acquire properties and create joint ventures, “utilizing a value-added approach,” says Alan Goldstein, co-founder and president of the parent company. And the new Goldstein Equities will manage commercial and mixed-use investment projects.
Goldstein Development is up and running with a couple of projects, including a retail property on Route 17 in Lodi anchored by Home Depot and National Wholesale Liquidators. The company is also starting work on a 15,000-sf building, the final phase of a 150,000-sf urban redevelopment shopping center in Newark, anchored by Home Depot, Applebee’s and Wendy’s.
And Goldstein Equities is currently working with clients to invest in a couple of projects, including a 180,000-sf Pathmark-anchored shopping center in Eatontown. Another early effort for the group is a 150,000-sf Levitz- and Babies R Us-anchored property in Paramus, NJ. “Our new divisions are a natural progression of our services,” Goldstein says.
posted by Jones Lang LaSalle NJ News Blog at 11:17 AM
Apartment Owner Secures $24M Financing Last updated: March 15, 2006 10:24am (To read more on the debt and equity markets, click here and to read more on the multifamily market, click here.)
SAYREVILLE, NJ-An affiliate of the Kaplan Cos. has obtained permanent, fixed-rate financing amounting to $23.6 million for its Camelot at LaMer multifamily community here. The funding was arranged through Freddie Mac for the Highland Park, NJ-based Kaplan by Irwin Boris, vice president of GMAC Commercial Mortgage Corp. in the firm’s New York loan origination office. “We were able to secure a forward commitment for this repeat borrower,” Boris says. “We also provided them with construction financing over the past 24 months while LaMer was built.”
Camelot at LaMer consists of 200 units, mixing townhouses and garden-style apartments, on 10 acres. The project consists of a total of 14 three-story buildings and a townhouse. The property is also the fourth phase of a planned community called LaMer, which contains a total of 1,524 units. The first three phases consists of a mix of for-sale townhomes, garden-style condos and single-family homes.
posted by Jones Lang LaSalle NJ News Blog at 11:16 AM
Morris, state hailed as business hotspot Available office space and proximity to major roads makes area very desirable BY MICHAEL DAIGLE DAILY RECORD
RANDOLPH -- Morris County and New Jersey's prime location as a transportation crossroads and an educated, skilled workforce is a key reason why businesses choose to relocate here, but those advantages are offset by the high cost of living, especially for housing, and an archaic zoning system that ensures delays in the application process.
The types of business that would be attracted here are high-technology, high paying companies for which being close to New York City and a high income population outweigh the higher costs of doing business, speakers said.
Those were among the key points made at the third annual Morris County Municipal Summit Wednesday at County College of Morris that attracted over 100 municipal officials.
The event, presented by The Morris County Economic Development Corp., featured discussions about how to create an effective and flexible building code program, and economic trends.
Office overflow
It is also time that towns reconsider the uses of the 32 million square feet of empty office space, said David T. Houston, president of real estate developers, Colliers Houston & Co. The businesses that once used those type of large office parks have moved to less costly locations, especially overseas. It is the cost of doing business in a global economy, he said.
"With the unemployment rate at 4.9 percent and 32 million square feet of office space available, even if every person in the state got a job, you could not fill the office space," he told the town officials.
Houston said that mixed uses that include retail and housing could be developed. He said he helped sell some empty office parks to colleges.
John Bronson, managing director for Barclays Capital, the British bank that moved 500 jobs into a Whippany office space, said the company chose Morris County for its location within 30 miles of New York City, the available workforce and "world class" restaurants.
He said after Sept. 11, Barclays decided that having all its operation in one place, at the time Manhattan, was unwise. After considering Jacksonville and Columbus, Ohio, the company settled on Morris County, he said.
The town helped the company recognize that it was the right choice by working well with the company to get the necessary site changes made, Bronson said.
Sticker shock
While Morris County's closeness to New York was a plus for workers who had worked in the city, the cost of housing was a shock, and some workers chose not to relocate, he said.
The workers there are not the "million dollar babies" of the company, he said, but technicians and operations people, who, while well paid, balked at the cost of housing in the county.
Houston, who helped Cadbury -Schweppes relocate its research facility to Route 10 in Hanover, listed 10 attributes of business life in Morris County and rated them as either a plus or a minus. The most favorable attribute is the highway system, he said. Routes 80, 287, 24, 23 and 10 all make it easy to move goods and people through the region.
Bronson said that the level of the workforce was a key in Barclay's decision to move to the county, and cautioned the town officials about the dangers of attacking school budgets as a way of reducing taxes.
The county's excellent school system is producing the kinds of talented workers that businesses need, he said. If that changes, it is easy for corporate leaders to look elsewhere.
Tax incentive
Houston said another plus for the state is business tax incentive plan that is used to lure companies to the state. It is a cost effective tool, he said.
The biggest problem in the state is a "1950s style zoning system" that simply takes too long for site plans to be approved, Houston said. It takes two years, and in a time when products are devised, designed and marketed in a few months, "no one has two years to wait."
posted by Jones Lang LaSalle NJ News Blog at 11:15 AM
Philadelphia Firms May Be Ripe for Mergers Gina Passarella The Legal Intelligencer March 16, 2006
While larger Philadelphia firms attempt to create various identities -- whether they be national, regional, super-regional or global -- one fact remains: There are few out-of-town national firms with offices in the City of Brotherly Love.
There is a bit of a debate around the legal community as to whether that is about to change, not through new office openings but through big-name mergers.
While discussing a possible merger between Pepper Hamilton and Rochester, N.Y.-based Nixon Peabody, Dan Binstock, managing director of BCG Attorney Search's Washington, D.C., office, said Philadelphia is an "untapped resource" when it comes to merger possibilities, citing the large amount of pharmaceutical work done by the city's firms and the lower hourly rates.
"To some extent Philadelphia has been, over the years, in the shadow of New York or Washington, D.C.," Drinker Biddle & Reath managing partner Andrew C. Kassner said. "But that may not be the case for much longer."
Robert Denney of consulting firm Robert Denney Associates Inc. said he questions whether the Philadelphia market has the potential to be "tapped."
"I do not see that the Philadelphia legal market has the growth potential for a national firm to want to acquire a Philadelphia firm," he said. "A regional firm might look at a Philadelphia acquisition as a defensive step to consolidate their regional position. I do not think a national firm would be as interested."
The two biggest reasons that a large national firm would want to come in and acquire a large Philadelphia firm, according to Joel A. Rose of Joel A. Rose & Associates, would be for a certain client base and attorneys who round out the firms' areas of expertise.
The problem with a merger of that magnitude, however, would be client conflicts, he said. Rose said that the "tremendous pharmaceutical base" in the Philadelphia market would be another big draw.
"I could see a national or multinational law firm acquiring one of the large firms in Philadelphia because of the client base," he said.
Stephen A. Cozen, chairman of Cozen O'Connor, said he thinks the pharmaceutical work is not concentrated in the Philadelphia area, but spread around to several national firms.
According to Cozen, other than the "wealth of legal talent" in the market, he does not see why a large firm would want to come to Philadelphia before other markets.
"I can't think of anything that any Philadelphia firm does ... that larger national firms from New York, Chicago and Los Angeles couldn't acquire elsewhere," Cozen said, adding that he could not think of a particular practice area that was so unique that it could not be found in the "back yard" of the large national firms.
Kassner said that while Philadelphia firms may not be the first on the list of merger prospects, they could eventually move up.
"As consolidation is completed in major markets like New York, Washington, D.C., and maybe Chicago, I think national firms might look to other major markets," including Philadelphia, he said.
Binstock agreed in an interview March 9 that the first choice for big firms is not to go into a smaller market. He said, however, that such a move could provide opportunities to get more medium-size clients and farm out more work to offices that do have lower rates.
"It's a strategy for retaining clients rather than losing them to firms with lower billing rates," he said.
Binstock said larger firms are "racing to merge with the firms in large cities," but added that a second wave may come in which those same firms look to smaller markets.
In an end-of-the-year letter to clients, Michael Coleman of Coleman Legal Search predicted that 2006 would be the first time a large out-of-town firm and a large Philadelphia firm would merge. He also predicted that if that were to happen, an intracity merger between two Philadelphia firms would take place.
He said in an interview that the second merger would occur with a firm that realized that while it would not receive interest from a large national firm, it did not want to remain stagnate. He said a firm in that situation would most likely look to merge with another local firm.
"Someone has to be the leader, and once someone leads, others tend to follow," Coleman said. Coleman said that the positive press Philadelphia has been receiving in general as a place to live might spill over to its legal market as well.
"Up to now, there was a feeling of 'this is not a must-locale,'" he said. "I don't think it's an untapped resource unless we change our thinking."
Fox Rothschild Co-Chairman Abraham C. Reich said he has often wondered why large national firms have not targeted Philadelphia.
"If it was going to happen, it would have happened" already, Reich said. "Philadelphia may not be a growth market in terms of client base."
Reich said most local law firms say their growth is in other markets.
There are also questions about whether the city provides the same economic model that many large firms are seeking to attain, given that Philadelphia often has lower hourly rates than most major markets.
Kassner questioned whether national firms would manage practice areas in markets with varying rate structures and be able to maintain their profitability.
Coleman said that while the rates may not be the same, the cost of living, associate salaries and overhead in this market are still lower than many other major markets.
"It's worth looking into because if the cost structure is lower, profits can be further enhanced by raising rates," he said.
Kassner said the business model would have to make sense.
"Most national firms, I imagine, would be hesitant to just acquire a general-practice regional firm," he said.
Whether they agree that Philadelphia could soon see merger madness, most of those firm leaders who spoke with The Legal Intelligencer said their firms have had discussions, albeit at varying levels, with firms around the country.
"I think most large law firms speak on a regular basis with other national firms," Ballard Spahr Andrews & Ingersoll Chairman Arthur Makadon said.
Kassner said Drinker Biddle would never merge simply to get bigger, but added that strategic growth is important.
"Given the legal market today, firms throughout the country are always talking to each other, and we're no different," he said.
Reich said that while his firm has had "flirtations" over the years, Fox Rothschild is "not looking to get gobbled up by someone to become an afterthought."
Cozen said his firm is always interested in talking to firms, larger or smaller, if the opportunity is a good fit.
He said his firm might be one of the only local large firms that has a practice area -- "high-level insurance litigation" -- that would be attractive to national firms.
posted by Jones Lang LaSalle NJ News Blog at 11:12 AM
City looks to earmark $33.5M for local projects Funds part of disputed $80M intended for nonprofits Thursday, March 16, 2006 BY JEFFERY C. MAYS Star-Ledger Staff
Instead of giving $80 million to two nonprofit corporations to aid development, Newark will set aside $33.5 million in the municipal budget to fund projects ranging from an expansion of the Newark Museum to a dormitory for Seton Hall Law School, the city council and Business Administrator Richard Monteilh said yesterday.
The move comes a week after Susan Jacobucci, director of the state Division of Local Government Services, ordered Newark to "take no action" with the $80 million until her agency could review the deal. Four city residents also filed a lawsuit to stop the transaction.
The $80 million is a portion of the city's $450 million settlement with the Port Authority of New York and New Jersey over back lease payment for Port Newark and Newark Liberty International Airport.
Monteilh said the city's attorneys and auditors believe that they do not need state approval to appropriate the funds to city agencies like the Newark Public Library and Newark Museum through the municipal budget. The remaining $46.5 million will sit in reserve until a meeting with state officials, said Monteilh.
"We have the authority to make these appropriations within the law. More than half this money is going to city facilities," he said.
Sean Darcy, a spokesman for the Division of Local Government Services, disagreed. "As a general rule, this letter prohibits the money from being used to make a charitable contribution to a nonprofit corporation," he said. "The Division of Local Government Services was advised that no action would be taken until our meeting."
The city and the division have had conversations about a meeting but have not set a firm date, added Darcy.
The council did not vote on the new proposals before The Star- Ledger went to press, but at least six council members expressed support for the plan.
Questions about the Newark Redevelopment Trust Fund Inc. and the Newark Neighborhood and Recreation Redevelopment Trust Fund Inc. arose after it was revealed that Mayor Sharpe James was on the board of trustees of both corporations and that both were incorporated the same day the council voted to set aside the money.
In addition, the agencies were funded before rules were established under which the money would be awarded.
Following a raucous meeting filled with arguments, jeers, cheers and passionate speeches from residents and candidates for public office, city council members endorsed the plan after saying that the public and former councilman and mayoral candidate Cory Booker had attacking them unfairly. With the May 9 election approaching and today the last day to file as a candidate, accusations of political grandstanding were rampant.
Earlier this week, a Booker- funded piece of campaign literature began arriving in residents' mailboxes. It accused James and the council members of using some of the $80 million to "fund their retirement account."
Two council members running on Booker's ticket, Augusto Amador and Luis Quintana, voted to endow one of the corporations with $30 million, a fact not mentioned in Booker's campaign literature. Both changed their minds and unsuccessfully attempted to have the council rescind their earlier action last night.
After announcing the projects they wanted to spend money on, a few council members threatened to sue Booker for slander and libel. Booker could not be reached for comment last evening.
"I didn't break any law. I didn't do anything illegal," said Councilwoman Bessie Walker. "Build a brand new school for special needs children. This is the slush fund they are talking about," said Council President Donald Bradley as he held up a large board with a list of all the proposed projects.
Monteilh said the goal is to boost the level of development going on around the city with projects that will help to change the face of Newark.
"We want to get the enthusiasm out that other development projects apart from the arena can get going. People want to see that the city is trying to drive the quality of life in Newark," said Monteilh.
In addition to giving money to the museum and library, the city would help fund a $5 million redevelopment of Symphony Hall. The city would also provide Seton Hall Law School with a $3 million loan to help its student housing project get off the ground. Some of the organizers of the projects to be funded have to present the city with redevelopment proposals that will have to be approved by the city council.
"I want $5 million for Newark Symphony Hall. I want $1 million for summer jobs," said Councilman Ras Baraka. "I wouldn't vote for $80 million to go into anybody's pockets." But angry residents questioned the council about the way it originally appropriated the $80 million, saying they did not see any public input, the money was awarded hastily before an election and the council was unsure of all the details about the nonprofit corporations themselves.
"Representing the public means we ensure that the people are aware of critical public issues before we make final decisions and that they are given the chance to comment, influence and participate," said community activist and advisory school board member Richard Cammarieri. "It is your responsibility to take care of our money and make sure our future is secure and our children's future is secure," said resident Leonard Thomas.
Cammarieri said he didn't know what to think of the council's latest funding proposals because, like the original proposal, they were kept from residents until the last minute.
posted by Jones Lang LaSalle NJ News Blog at 11:11 AM
A pair of law firms announced separate expansion plans this week.
Lawrenceville-based Stark & Stark took over a Cherry Hill firm. Robert Newman and Jeffrey Weiner, both commercial litigators, joined the firm. The move is an effort to expand the firm's reach into South Jersey, officials said.
To the north, Drinker Biddle & Reath -- with offices in Princeton and Florham Park -- is almost doubling the size of it's Chicago office. The firm is leasing 17,400 square- feet in the Central Loop. -- Kate Coscarelli
posted by Jones Lang LaSalle NJ News Blog at 11:10 AM
Newark arts center shows off its plans for a grand high-rise Thursday, March 16, 2006 BY PEGGY McGLONE Star-Ledger Staff
The New Jersey Performing Arts Center raised the curtain on its next production yesterday, when it unveiled plans for a high- rise development across Center Street in downtown Newark.
The first major expansion since the arts center opened in 1997, the high-rise would feature at least 250 residential units -- including 50 reserved for performing and visual artists -- 30,000 square feet of street-level retail and structured parking for 700 cars.
"This is a complicated project in an untested market, but it's time for Newark to have a 24/7 downtown," said Lawrence P. Goldman, NJPAC's president and CEO.
Goldman announced the arts center is seeking a developer to construct the $100million-plus building. The goal is to select a developer by the end of this year, and to open the building in 2010.
A cornerstone of NJPAC's mission is to be an economic engine for Newark. With a light rail station set to open on its property this summer and the ongoing development of the Passaic River waterfront, the time seems right to proceed, Goldman said.
"The best nonprofits are entrepreneurial. You shape your environment, you don't wait around for others to shape it for you," he said. "We want to create value and then share in it."
NJPAC already has invested $2.5million in the preliminary stages of the effort, which was first detailed in NJPAC's master plan in 1988. Built with $185million from public and private sources, NJPAC features the multi-use 2,750-seat Prudential Hall and the 514-seat Victoria Theater. In its first eight seasons, the venue has attracted more than 4million people to classical and pop concerts, dance, theater and jazz programs.
The new building, to be known as Two Center Street, will be erected on a 1.2-acre site between Park and Mulberry streets across from the arts center's entrance. Currently, the land features a two-story building and a surface parking lot. There are two more planned developments on the art center's 16-acre footprint.
The proposal received high marks from Arthur Stern, a principal of Cogswell Realty Group, a developer with a majority interest in 22 Newark properties.
"It's a very exciting project and I think the prospects for it are very strong," Stern said. "There is an absolute need for residential housing in Newark. Combining it with a world-class arts center will attract a lot of residents."
Although Stern described the projected costs as "optimistic for a project that ambitious," he predicted the arts center's plan will attract the attention of developers.
"Our firm would very much welcome the opportunity to participate in something of this stature," he said. "
During construction of the arts center, modifications were made to Mulberry Street in anticipation of this development. The street was rerouted and all the infrastructure fixed to ready it for future construction.
Last fall, NJPAC officials persuaded the Legislature to amend the 99-year land lease to allow NJPAC to keep more of the profits from the development. The state agreed to allow NJPAC to keep the state's 50 percent share of revenues as long as the arts center used that money for capital expenses or invested it in its endowment.
posted by Jones Lang LaSalle NJ News Blog at 11:10 AM
By RONALD SMOTHERS Published: March 16, 2006 NEWARK, March 15 — For nearly 40 years, Newark has been trying to fight its way back from the riots of the 1960's and a generation in which people and businesses spilled out of the city to the suburbs on the highways that crisscross it.
Joyce Dopkeen/The New York Times
Lawrence P. Goldman, chief executive of the New Jersey Performing Arts Center, said that "no city can be great without downtown housing."
In fits and starts over the last decade, residents have seen some progress in rebuilding the state's largest city: a minor league ballpark, the start of construction on a new hockey arena for the New Jersey Devils, the addition of the New Jersey Performing Arts Center.
But the benefits, like jobs and tax revenues, have not been obvious, and the urban ills of poverty, high crime, gang violence and substandard housing have persisted. To many, a sense of excitement may not have caught on, and they question whether Newark has actually turned a corner.
Now civic leaders and city officials are hoping to give the city another little push toward revival, this time pinning their hopes on the performing arts center.
Built nine years ago, at a cost of $187 million, the center has been a surprise success story, drawing both crowds and interest, and serving as an effective good-will ambassador for downtown Newark.
On Wednesday, Lawrence P. Goldman, the president and chief executive of the arts center, announced a plan to expand both the scope and presence of the complex, in the hopes that it will transform that part of Newark into a haven for artists and art lovers.
The center is seeking developers interested in becoming a partner in the construction of 250 units of mostly market-rate housing and street-level retail space on a plot of land it owns across the street from the red-brick-and-glass building that houses its concert hall and theater and restaurant complexes.
Mr. Goldman said the proposed housing towers, like the performing arts center, would look out over the Passaic River and form a southern boundary to an area now envisioned as a "theater square."
Under the plan, 20 percent of the apartments would be set aside for artists with modest incomes, Mr. Goldman said; the rest would be market-rate rentals. The project involves the first new residential construction in downtown Newark in a generation, he said.
The project is necessary, he said in an interview, "because no city can be great without downtown housing."
If the project gets off the ground, it will be only the latest residential development downtown. Public and private partners are also creating 324 housing units in a former office building, and Rutgers University is building a dorm for its Newark campus a block away from the arts center. In nearby neighborhoods, Mr. Goldman said, town houses and two-family homes are sprouting on vacant lots where for years there had been only wildflowers and tall grass.
"Urban transformation has always been in the performing arts center's DNA," Mr. Goldman said. "Now we want to ride the wave and amplify the wave of what is happening in Newark." The cost is estimated at more than $100 million, and most of it would be privately financed, but the center will probably seek some public money to help defray the cost of an underground parking garage. Mr. Goldman said he was confident that public money would be found.
He has some experience in this kind of project. Before coming to Newark, he was the vice president of Carnegie Hall, and he promoted its expansion into housing and office space. The Carnegie Hall Tower includes a mini artists colony in Midtown and has generated considerable income for Carnegie Hall.
Newark is not the only urban area to pin its revival hopes on an arts institution. Cleveland, Pittsburgh and Brooklyn — around the Brooklyn Academy of Music — and myriad smaller struggling cities have hoped to lure more artists and related businesses to their struggling downtowns.
Although arts institutions are important, said Michael D. Beyard, a senior fellow at the Urban Land Institute, they alone are not a "silver bullet" against urban blight. "If an arts institution is lucky," he said, "they do not have to take much action after they are built, and the private sector will do the heavy lifting of revitalization. But that is the exception and not the rule. Many downtowns have declined so far that to recreate the market is not easy."
But Arthur Stern, the chief executive of the Cogswell Realty Group, said he saw other signs that Newark was ripe for revival. His company has already staked more than $200 million on efforts to rebuild the city, including the purchase and renovation of the city's tallest building, a historic office tower. The building, at 744 Broad Street, which reopened in 1999, is nearly full and includes a Starbucks on the ground floor. The company is also completing the renovation of a 28-story Art Deco office tower into 324 units of market-rate housing, with health clubs and a bowling alley for tenants.
Mr. Goldman said that the performing arts center would seek proposals from several dozen developers with experience in urban settings. Arthur F. Ryan, chairman and chief executive of Prudential Financial, who is co-chairman of the center's board, said the company that was chosen would have to share the center's commitment to "artistic excellence, opportunity for all and racial diversity."
The performing arts center has attracted more than four million people to performances in the nine years it has been open, said Mr. Goldman, who called it an artistic success. Consequently, he said, now was the right time to make the foray into housing.
The planned housing will not provide anywhere near the income for the center that Carnegie Hall's office tower has, he said. But he noted that the Newark center owns another nearby parcel, which it would seek to develop next.
posted by Jones Lang LaSalle NJ News Blog at 11:05 AM
Lehman posts record 25% gain in profit (AP) — Quarterly earnings at Lehman Brothers Holding Inc. climbed 25%, setting a new record for both profits and revenues on strong results from the Wall Street firm's investment banking and equities trading businesses.
For the quarter ending Feb. 28, Lehman Brothers earned $1.07 billion, or $3.66 per share, compared with $856 million, or $2.91 per share, a year earlier.
The results include a one-time gain due to accounting changes that added $47 million, or 16 cents per share, to the company's results. Revenue rose 17%, to $4.46 billion. Analysts surveyed by Thomson Financial had forecast earnings of $3.17 per share on revenue of $4.17 billion.
Investment banking revenue rose 22% to $835 million, the third consecutive quarter of record income for the division. The increase came largely due to record activity in corporate debt underwriting.
Within Lehman's capital markets division, equity revenues surged 52% to $944 million as the company took advantage of strong gains in the stock market during the quarter. Fixed-income revenue, which includes bonds, real estate and credit trading, rose 2% to $2.1 billion.
The nation's commercial real estate markets are benefiting from rising demand for space, following record investment flows in 2005, according to the latest industry outlook from the National Association of Realtors (NAR).
Citing solid fundamentals, David Lereah, NAR's chief economist, said, "Vacancy rates are declining in all of the major commercial sectors, and rents are rising at healthy rates." He noted that rising U.S. employment and expanding international trade are largely fueling the demand for commercial space.
Investment in higher-quality commercial property, excluding deals valued at under $5 million, climbed 44% last year to a record $268 billion. NAR forecasts that office vacancy rates, now at the lowest level since 2001, will drop to an average of 11% by year-end from 13.6% in the fourth quarter of 2005, while office rents are to rise 5% this year.
Currently, three counties in California--Ventura, Orange and Riverside--plus New York City and Miami are enjoying the lowest vacancy rates in the country, posting numbers of not more than 8.5%.
Meantime, the top suburban office markets for investment are Los Angeles, northern Virginia, California's Orange County, Dallas and northern New Jersey, according to NAR. In the industrial sector, trade with China continues to drive heavy traffic at the nation's ports. NAR expects new industrial construction to climb 20% this year to meet distribution requirements and to replace aging structures.
The industry association forecast retail vacancy rates to fall to an average of 7.8% by year-end from 8% in the fourth quarter of 2005, with average rents rising 4% this year. - Ki Kim
posted by Jones Lang LaSalle NJ News Blog at 11:03 AM
(Nasdaq: PARS) has agreed to acquire Vela Pharmaceuticals Inc., a Ewing, N.J.–based drug company focused on CNS disorders. The deal is valued at approximately $29.7 million, including $5 million in cash and 11.5 million shares of Pharmos common stock. The deal also includes up to 8 million shares worth of milestone payments. Vela has raised around $58 million in total VC funding since its 1998 inception, from firms like Venrock Associates, New Enterprise Associates and JPMorgan Partners.
posted by Jones Lang LaSalle NJ News Blog at 11:03 AM
UPDATE: Mack-Cali/Gale Deal Goes Under Contract By Eric Peterson Last updated: March 14, 2006 10:14am
CRANFORD, NJ-The deal for Mack-Cali Realty Corp. to acquire most of the Florham Park, NJ-based Gale Co., which GlobeSt.com first reported in February, is under contract. The former will acquire the Gale Real Estate Services Co. and approximately 2.8 million sf of office properties in New Jersey, and officials of both companies expect the deal to close next month.
Under the terms of the signed agreement, Mack-Cali will buy the Gale Real Estate Services Co. for $12 million in cash, $10 million in common operating partnership units and as much as $18 million in additional cash based on an earn-out formula. The REIT will also acquire from Gale affiliates stakes in certain development/joint ventures with institutional investors on terms to be determined prior to closing.
Mack-Cali will also acquire substantially all of the ownership interests in 13 class A office properties, valued at $378 million and amounting to 1.9 million sf in New Jersey. Included in the total is 343 Thornall St. in Edison, in which Mack-Cali had earlier indicated to would acquire only a half interest.
Finally, Mack-Cali will pick up one-half ownership interests in seven class A office buildings, valued at $127.5 million. The seven properties total some 900,000 sf and are situated in Northern and Central New Jersey.
According to a statement issued by Mack-Cali, “the transactions will be financed through a combination of the assumption of, and placement of new, mortgage debt, credit facility drawings, cash and the issuance of common operating partnership units.”
posted by Jones Lang LaSalle NJ News Blog at 11:33 AM
Closures Fuel Vacancy Rate Increase By Eric Peterson Last updated: March 14, 2006 10:20am (For more retail coverage, click GlobeSt.com/RETAIL.)
OLD BRIDGE, NJ-With the recent demise of the Treasure Island craft shop chain putting more than 145,000 sf on the market the Northern New Jersey retail vacancy rate along major highway corridors increased slightly to 3% from year-end 2004’s 2.8%. Still, this retail market remains one of the tightest in the country, according to a new report.
“The vacancy factor moved up a bit in the wake of Treasure Island’s decision to totally close, and targeted closings by Levitz Home Furnishings and several other chains,” says Richard J. Brunelli, president of RJ Brunelli & Co., the retail real estate services firm based here. His company’s latest study found just under 800,000 sf of vacancies within the 26.5 million sf of shopping center and freestanding space it tracks along a half-dozen highway corridors in Bergen, Essex, Morris, Passaic, Somerset and Union counties. The latest study found availabilities in 95 of the 791 properties studied.
“But with new development opportunities along the six corridors few and far between, availabilities that arise in existing properties are typically gobbled up right away,” Brunelli says. “For the most part, large blocks of space that linger on the market are in properties with visibility or access issues.
The Levitz closings followed the furniture retailer’s acquisition of the rival Seaman’s chain and several locations occupied by the defunct Huffman Koos, and its subsequent Chapter 11 bankruptcy filing in October. Levitz is currently reorganizing under new ownership. And the market is getting another jolt with the closure of four OfficeMax locations totaling 93,000 sf as part of a larger shut-down of 110 stores nationwide. “But given the level of demand for retail space in the region, we anticipate that virtually all of these big-box stores already on the market or in the process of being closed will be absorbed over the course of 2006,” Brunelli says.
posted by Jones Lang LaSalle NJ News Blog at 11:17 AM
PLOTS & PLOYS Pricey Peripherals March 15, 2006; Page B4
Despite signs of a housing-market slowdown, the number of areas in the U.S. rated as "extremely overvalued" continues to climb. And in addition to the usual suspects on both coasts, some peripheral markets are getting more pricey.
According to Global Insight/National City's quarterly housing valuation analysis, 42% of the U.S. housing market was overvalued and at risk for a price correction during the fourth quarter of 2005. The study analyzed 299 metro areas in the U.S., which account for 76% of all single-family housing units. The number of extremely overvalued markets increased to 71 from 61 in the third quarter.
California and Florida had the highest concentration, accounting for 18 of the 20 most overvalued metro areas. But in terms of markets that had the biggest valuation increases during the quarter, Bend, Ore., had the second-highest increase after Naples, Fla., growing 13% from the earlier quarter. Boise City, Idaho, and St. George, Utah, also had substantial valuation increases.
Richard DeKaser, chief economist at National City Corp., says the findings show equity-rich homeowners are cashing out of places like California and moving to such secondary markets in Oregon and Idaho.
The analysis deems markets that are overvalued by 30% at risk for price corrections based on the typical degree of overvaluation that preceded the 63 market price declines observed since 1985.
'I Double-Dare You' In a hot office market like Bellevue, Wash., developers should be elbowing each other out of the way to get new buildings started.
And indeed, it looked like that would happen this year. No fewer than six developers announced plans to construct office buildings in this suburb where rental rates are slightly cheaper than in nearby Seattle. Vacancy in the Bellevue submarket has dropped to 8.8% from 14.8% in just one year, according to Colliers International Inc.
But these developers can do the math and have realized that if the six proposed buildings were built, three million square feet of office space would come online in a market with only six million square feet now. So it's become a game of dare, with no developer actually starting construction. "It's interesting to see who is going to go first and see what will get done, because they could easily overbuild the market overnight," says Craig Hill, senior vice president and managing director for Grubb & Ellis in Seattle.
Of the six buildings, only Lincoln Square, owned by Kemper Development Co. of Bellevue, has hooked a tenant. Outdoor sportswear company Eddie Bauer is relocating its headquarters from nearby Redmond. Odds are that Lincoln Square will go forward sometime in the second quarter.
posted by Jones Lang LaSalle NJ News Blog at 11:15 AM
Warehouse tenant battles on fate of building Firm's lawyer alleges 'insider deal' with Newark arena area redeveloper Wednesday, March 15, 2006 BY STEVE CHAMBERS Star-Ledger Staff
The old concrete warehouse has sat near Newark's Penn Station since 1907, a hulking fortress that once received railroad cars on its second floor as part of a state-of-the-art freight-distribution operation.
Times change, of course, and when the city began discussing a downtown makeover that included a new arena for the Devils, it decided the warehouse had to be either demolished or refurbished for some more vital use.
In a quintessential Jersey spat, however, the building's lone tenant is fighting back, arguing the city is unfairly trying to seize the building and hand it over to a politically-connected businessman, Jerome Gottesman, who owns Edison Parking.
Edison was named the redeveloper of roughly half the city's 23-acre downtown makeover -- including the warehouse -- as part of a complex property swap that allowed construction of the arena to begin last summer.
"This is such an insider deal," said William Ward, a lawyer for Iron Mountain, a document-storage company that rents the warehouse. "Their (Newark's ) own experts said they could take this building or not take it as part of the redevelopment, but all of a sudden they take it. Why? Because they made a deal with Gottesman."
City officials deny they are singling out Iron Mountain and argue that such a strategically located building cannot remain as a ghostly presence in a redevelopment breathing new life into the city. "We need a vibrant downtown core," said City Administrator Richard Monteilh. "Our plan calls for office, retail or commercial uses that create jobs. Presently on that site, there are few jobs and no activity, whatsoever. The entire building is taken up with paper."
Although Iron Mountain has kept the building in good, secure shape -- its own planning expert argues it doesn't meet the legal definition of blighted property -- there is little question that the area cries out for sprucing up. Fences topped with razor wire and surface parking lots dominate the landscape.
The city would like to see all this replaced with a park that includes a pathway linking Penn Station to the $310 million arena -- currently under construction -- as well as parking garages and several high-rise residential or office buildings with stores and restaurants on the ground floor.
Combined with the arena, the plan would dramatically reshape the entire stretch between City Hall and Penn Station. But to make it work, the city signed an agreement with Gottesman. He gave up land on the arena site, and the city in turn named him redeveloper of everything east of Mulberry Street -- about half the entire makeover zone.
Gottesman declined to comment, but Thomas Banker, a consultant to Edison, said the designation of redeveloper came with financial risks and contractual obligations that could cost the company its land if it fails to deliver.
"As a landowner, Gottesman had no obligation to build anything," Banker said. "He's stepped up and said, 'I want to be part of this.'"
Both Banker and Monteilh noted that neither Iron Mountain nor the warehouse owner ever approached city officials with a similar offer. But Ward said the state's sweeping redevelopment law -- which gives Newark the right to seize the warehouse and hand it over to Edison -- works much better for politically-connected people.
Gottesman has long been a powerful player in Newark by virtue of his large downtown land holdings. But he has not been shy about protecting his rights. In the late 1990s, he sued the city to stop the redevelopment plans, because he felt he was surrendering too much of his land. He held up the plans and eventually forced the city to move the arena.
Iron Mountain is battling the seizure of the warehouse in court, and Ward said he would seek to make the agreement with Gottesman an issue.
But Monteilh said it made perfect sense to put the site in Edison's hand. The company owns much of the surrounding property and was an experienced developer that has built high-rises in New York City.
The building's owner, David Berkowitz of Central Lewmar Corporate, has so far not gotten involved in the battle. A call to his lawyer was not returned.
Iron Mountain leased its warehouse 10 years ago and the company said it spent $3 million making it suitable for storing documents from a wide array of businesses, from financial services to hospitals to law firms. The lease gave Iron Mountain the right to purchase the building this year or extend the lease for 10 years.
"It's not like we've never had to move facilities, but it's very expensive," said Melissa Mahoney, a company spokeswoman. "It's an arduous undertaking that takes lots of time and money. For obvious reasons, we'd like to stay."
Banker, who headed the Essex County Improvement Authority for more than a decade, said that Iron Mountain would be fully compensated for its relocation expenses. But he said Edison is hopeful the city will soon prevail so the redevelopment plans can move forward.
"You're going to have a spanking new arena and park and roads, and next to it you'll have something that is, aesthetically, a nightmare," he said.
Steve Chambers covers land-use issues. He may be reached at schambers@starledger.com or (973) 392-1674.
Growth of port and county are linked Middlesex economic forum shines spotlight on core of 'Liberty International Corridor' Wednesday, March 15, 2006 BY DIANE C. WALSH Star-Ledger Staff
Middlesex County is in a prime position to benefit from the rapid growth at the Port of New York and New Jersey, an executive from the North Jersey Transportation Planning Authority said yesterday at the county's first economic summit.
The port is the core of the "Liberty International Corridor," stretching from the George Washington Bridge, south along the spine of Interstate 95 and down to the Raritan River, according to John Hummer, who is in charge of economic development for the transportation authority.
Last year, records were broken when more than 4.8 million containers were shipped through the port, feeding a massive cargo and freight industry, according to Hummer, who said Congress earmarked $100 million to develop the infrastructure for the region.
"It will be New Jersey's equivalent to the Silicone Valley," he said.
Old manufacturing jobs that the region lost in the past decade could be replaced by new light manufacturing jobs, such as warehousing, and the service industry that feeds off the port, Hummer said.
But sponsors of the summit voiced fears that warehouse jobs do not pay enough.
Jane Brady, a former freeholder now in charge of the county's department of employment training, said a family of four must make at least $34,000 a year to be self-sustaining. Warehouse jobs often do not pay the $15 an hour needed to keep a family from sinking below the poverty level, she said.
Carl Spataro, the county economic development coordinator, lamented that high-paying jobs are being lost and replaced by lower- end retail, service and hospitality jobs. Brady and others urged the local leaders to improve education, especially literacy programs, so workers can land jobs in higher- paying industries, such as information technology, financial services and health care. Still, Hummer said a new working class could be created by the economic boom at the port and entry levels could lead to better, high-paying jobs. Furthermore, he said brownfields near the port could be redeveloped.
Hummer said it was his job to "knit together the infrastructure to support this economic development."
Officials from 13 towns around the county attended yesterday's two-hour summit at the Sheraton in Edison. Edison Mayor Jun Choi said the session showed "we need to focus on regional planning and coordination.
"If we're going to grow right, we need to do it in a coordinated way," Choi said. Thomas Dallessio, the New Jersey director of the Regional Planning Association, one of the oldest independent planning agencies in the nation, urged the participants to "coordinate and collaborate" across the region.
He said Middlesex County is sitting in the middle of a mega-development region in the Northeast. "It's the economic breadbasket," he said. "But you need to talk to one another."
posted by Jones Lang LaSalle NJ News Blog at 11:11 AM
A DUBAI-ING SPREE IN N.Y. By LOIS WEISS Between The Bricks
DUBAI may have lost its U.S. port deal, but that hasn't stopped it from snapping up prime New York office buildings.
Dubai investment firm Istithmar, which means "investment" in Arabic, is now gobbling up city office buildings in a scenario New Yorkers might think of as déjà vu Japan all over again.
The latest $2.2 billion deal, we hear, is a direct grab for two Class A office towers owned by Mortimer Zuckerman's Boston Properties at $1,000 a foot. The cap rate would tally at 4.25 percent. A senior executive did not return a call for comment.
The first of Zuckerman's Dubai deals - at Five Times Square, a 2002-era 1.1 million-foot tower - is fully leased to Ernst & Young plus a few smaller tenants including former Mayor Rudy Giuliani's firm, Giuliani Partners, as well as retailers such as Red Lobster.
It should throw off $1 billion in cash flow through 2019, a report in Commercial Real Estate Direct said.
According to CoStar Group data, the twin buildings totaling 1.04 million feet at 280 Park Ave. are home to Deutsche Bank and the National Football League.
"They had gone to the market, interviewed three brokerage firms - CB Richard Ellis, Cushman & Wakefield and Eastdil Secured - and then went radio-silent," advised one top city real estate exec.
At a Left Coast gathering earlier this week, Sam Zell warned of a stealth deal in the city, and those aware of the transaction cautioned it was still a "rumor."
Nevertheless, it fits the previous deal run by Istithmar's U.S. advisory Andrew Farkas, who preempted offers for 230 Park Ave. late last year with a bid of $704 million.
Another firm tied to the Dubai government also purchased the Essex House hotel.
The Chairman of the Board of Istithmar, Sultan Ahmed Bin Sulayem, is also the executive chairman for the Dubai Ports, Customs and Free Zone Corp., and of Nakheel, the company constructing The Palm and The World Islands off the Gulf.
posted by Jones Lang LaSalle NJ News Blog at 11:10 AM
INSATIABLE Bank of America just scooped up three more floors at Douglas Durst's 1133 Sixth Ave., across the road from where Durst's and BofA's joint-venture One Bryant Park is rising on the avenue between 42d-43d streets.
The new, 67,000 square-foot lease, signed within the past few days, seems a drop in the bucket compared to the 522,000-foot chunk the bank recently took at its new, $1 billion headquarters, on top of 1.1 million feet it had earlier pre-leased.
But while the new building won't open until 2008, BofA plans to move immediately into the extra floors at 1133 Sixth.
"They already had two floors there, 39 and 40, which they inherited from Fleet," said Durst leasing chief Tom Bow. "Now they've signed for 17, 42 and 43 as well."
Online database mrofficespace.com lists the asking rent on the 17th floor as $58 a foot, and, in the tower-topping 42nd and 43rd, $70 a foot.
But how much is BofA paying at One Bryant Park, which it will jointly own with Durst?
After the bank originally signed for floors 2-24 - the deal that got the long-planned skyscraper out of the ground - Durst said he expected rents of $100 and up for the remaining, higher floors. Two weeks ago, the bank added floors 25-36 and 51, the top. Asked about rent, Bow would say only, "the whole deal is very complicated," adding, "BofA did take the top of One Bryant Park. Rest assured we easily achieved Doug's objective."
Since BofA is a part owner of the tower, whatever it's paying is being paid partly to itself. BofA was repped by Jones Lang LaSalle's John Ryan III along with JLL regional president Peter Riguardi.
BofA currently has around 2 million square feet in Midtown, including blocks at 9 W. 57th St., 40 W. 57th, 1673 Broadway and 1185 Sixth.
Meanwhile, work is speeding up on 1 Bryant Park. Its western half is going up first because "that's where BofA's mission-critical facilities will be, their trading operations," Bow said.
posted by Jones Lang LaSalle NJ News Blog at 11:09 AM
Fed says NJ economic growth likely By LINDA A. JOHNSON The Associated Press
TRENTON -- New Jersey's economy appears to be picking up steam, with employment holding strong, manufacturing employees putting in longer hours and housing construction picking up, at least temporarily, the Federal Reserve Bank of Philadelphia reported Tuesday.
While the regional bank's latest monthly forecast puts economic growth at more than 3 percent through the fall, a bank economist said it's too soon to declare a boom.
"We're seeing stronger numbers, but before we draw any conclusion, we want to see another month or two" of similar data, said Ted Crone, a vice president at the regional bank.
One reason for Crone's caution: The most recent data used in the forecast was collected in January, when unseasonably warm, fair weather likely boosted home construction and could have affected other key factors such as manufacturing.
Still, the bank's forecast that the Garden State economy will grow by 3.3 percent from January through September is the best since that level was predicted in November 2004. The bank's nine-month forecasts, issued each month, have generally been for below 2 percent growth since last June, Crone said.
Meanwhile, the bank's index of current economic activity rose 0.4 percent from December to January, more than in most recent months. The economy has grown by 0.9 percent in the last three months and by 3.1 percent over the last year.
Crone said New Jersey has matched the average economic growth of the 50 states nearly exactly over the past year
posted by Jones Lang LaSalle NJ News Blog at 11:08 AM
A Trend for Public REIT's: Going Private By TERRY PRISTIN
CenterPoint Properties Trust, a leading developer of industrial property, has burnished its image over the last few years by transforming a former weapons factory in the Chicago suburb of Elwood into a successful intermodal railroad and warehouse complex.
CenterPoint had been a publicly traded real estate investment trust since 1993, but its solid reputation was not reflected in its share price. Analysts fretted when the company tried to spread its wings beyond its home base of Chicago. The sudden dismissal last year of a top executive also dragged down the stock.
Fortunately for CenterPoint, executives at the California Public Employees' Retirement System, or CalPers, the nation's largest pension fund, saw things differently. CalPers, a joint venture partner with CenterPoint for the last five years, liked the company's plan to build additional intermodal centers — where shipping containers from around the world are transferred from long freight trains to shorter trains or trucks. CalPers also had great confidence in CenterPoint's management, said José McNeil, who manages the pension fund's industrial portfolio.
So last fall, CalEast Industrial Investors, a joint venture between CalPers and LaSalle Investment Management, a division of Chicago-based Jones Lang LaSalle that invests in real estate for pension funds and other institutional investors, made the kind of move that is occurring with increasing frequency. It bought CenterPoint for $3.4 billion, or $50 a share. The sale, representing a 13.1 percent premium above the average stock price over the three months before the deal was announced on Dec. 9, was completed last week.
Since 2004, 12 real estate investment trusts, or REIT's, representing all commercial property sectors — office, industrial, retail, hotels and apartments — have been acquired by private companies, and two other buyout offers are pending, both involving the Blackstone Group, a private equity firm in New York. Last week, Blackstone agreed to buy the CarrAmerica Realty Corporation, a large national office REIT based in Washington, for $5.6 billion, the richest price so far. Shareholders are expected to approve the deal this summer.
Real estate specialists say more REIT's can be expected to go private as long as interest rates remain low, investors are flush with capital and private buyers and Wall Street analysts have disparate views of how much the underlying real estate is worth. "I think it will continue as long as the stocks are cheap," said James S. Corl, the chief investment officer for real estate at Cohen & Steers, CarrAmerica's largest shareholder.
As many as 10 other deals may be in the pipeline, said Richard D. Kincaid, the chief executive of Equity Office Properties Trust, a REIT based in Chicago that is almost certain to remain public because of its enormous size; it has interests in 615 office buildings, with 111.1 million square feet.
Jonathan L. Mechanic, the chairman of the real estate practice at Fried, Frank, Harris, Shriver & Jacobson, said his firm was working on at least four possible deals.
The announcement by Town and Country Trust, an apartment REIT based in Baltimore, that it had accepted a buyout offer from an investor group made up of Morgan Stanley Real Estate and the Onex Corporation of Canada, unleashed a bidding war with two other suitors. Shareholders approved the deal with Morgan Stanley last week, but not before the bid was raised from $33.90 a share to $40.20 a share.
All this activity has helped to drive up share prices, even for REIT's that are not considered acquisition targets. "The stocks are up another percent today," Chandler Spears, the portfolio manager for Davis Real Estate Fund of Santa Fe, a major shareholder in CenterPoint and other REIT stocks, said last week. "It's almost getting a bit comical. It's like tech mania has hit REIT-land."
Since Dec. 31, REIT shares have risen 11.6 percent, according to Keven Lindemann, the director of real estate for SNL Financial, a research company based in Charlottesville, Va. Helping to spur the privatization trend is the widespread availability of debt financing, giving private buyers an advantage over public companies, which have traditionally limited their borrowing. "There isn't a lot of precedent for highly leveraged REIT's," said Cameron W. Clough, a managing director of North American banking for Morgan Stanley Real Estate, which advised CalEast on the CenterPoint deal. "The market would have a little trouble accepting it."
Blackstone, for example, is under no such constraints. The firm will borrow $4.25 billion to complete its purchase of CarrAmerica, the REIT said last week in a document filed with the Securities and Exchange Commission. Blackstone declined to discuss its plans for CarrAmerica, which has buildings in two of the strongest office markets, Washington and Southern California, but is also well represented in Northern California, a market that has yet to recover from the technology bust.
Mr. Kincaid, the Equity Office chief executive, however, speculated that Blackstone would sell CarrAmerica's trophy assets while holding onto its buildings in the Silicon Valley and San Francisco in anticipation of improvement in those markets.
At CenterPoint, the company president, Paul S. Fisher, said he was relieved to be free of the requirements of being a public company, including the more stringent accounting practices imposed by the Sarbanes-Oxley Act of 2002, which he described as a distraction. As a public company, CenterPoint had to disclose information before a transaction was completed, giving its competitors an advantage, Mr. Fisher said.
In addition, he and Michael M. Mullen, the chief executive, had to spend too much of their time explaining their business to Wall Street, Mr. Fisher said. "I'm now back doing transactions," he said.
But Dale Anne Reiss, who directs the global real estate practice at Ernst & Young, said that the availability of information had helped give the commercial real estate industry credibility. "That's one of the things that's helped create the value in real estate," she said. "Were we to lose that — over a period of time, it could impact the values."
Copyright 2006The New York Times
posted by Jones Lang LaSalle NJ News Blog at 11:06 AM
Career Switchers Add New Depth to Talent Pool in Real Estate By SANA SIWOLOP
When John McCarthy, a treasury manager at Toys "R" Us, started looking for a new job in July 2005, he was not looking at commercial real estate per se, merely for a position in which he might be able to improve a company's business more directly — and be rewarded for the effort. At Toys "R" Us, Mr. McCarthy spent considerable time evaluating the real estate potential of the individual stores as the company was in the process of being acquired. But he felt that his credentials — which included an M.B.A. in finance and corporate accounting — were most suited to a job in investment banking.
He did get an offer in that field, but in the end opted for a job at Cushman & Wakefield of New Jersey, a commercial real estate firm, where he is now working on leasing both office and industrial properties.
Commercial brokerage teams used to consist mainly of people who had spend their entire careers in real estate, but lately they have grown to be surprisingly diverse, according to many industry executives.
At Cushman & Wakefield, for example, Mr. McCarthy joined several other recently hired brokers who started in other fields; they included two former lawyers, two certified public accountants and a former saleswoman for Microsoft, said Gualberto Medina, the executive managing director.
Mr. Medina himself started out as a lawyer and as a certified public accountant. Before joining Cushman & Wakefield in 2002, he also served as secretary of commerce for the State of New Jersey, handled business development for an Internet telecommunications company and was president of a biotech start-up.
In August, Mr. Medina took the helm of Cushman & Wakefield's New Jersey operations, and since then he has looked for both seasoned professionals and industry newcomers as a way of providing specialized experience or expertise to his company's clients. Lately, Mr. Medina has also been receiving more unsolicited résumés from other types of professionals who think commercial real estate offers both more interesting challenges and better compensation.
Executives at other companies confirm the interest. Some of it, they say, can be pegged to the greater number of universities that now offer course work in real estate, as well as the career restlessness that seemed to course through many industries after the Sept. 11 terrorist attacks. But executives say that many job switchers also seem convinced that commercial real estate offers less drudgery and deskwork than other careers, like law, as well as the potential to earn large commissions, rather than simply bringing home a salary.
Michael Bush, the executive director of the Real Estate Associate Program, an industry-backed program that recruits and trains minority candidates for careers in commercial real estate, said that about a third of the 33 students who started the inaugural program in New York in January had come from either law firms or Wall Street firms.
The program, which already exists in Washington and Atlanta, meets for three hours a week in the evening and lasts for 24 weeks. Mr. Bush said the typical participant was 25 to 35 years old with several years of business experience.
Marisa Manley, the founder and principal of Commercial Tenant Real Estate Representation in Manhattan, said that when her company recently had an opening for a transaction manager, she interviewed four lawyers for the job, as well as an accountant who held both a law and a business school degree.
"The talent pool is stronger, and I'm seeing stronger professional backgrounds than I would have seen 10 years ago," said Ms. Manley, who was first trained as both an architect and as a lawyer.
Robert A. Knakal, co-founder of Massey Knakal Realty Services in Manhattan, agreed that the pool of applicants today had a wider range of talents. "The people coming into the field now have tremendous credentials," he said. "For about a year after Sept. 11, we found, to our great surprise, that the quality of people looking to get into the business had changed dramatically. In the 80's and 90's, it's very unlikely that people would have left other careers to go into commercial real estate."
Still, making the jump is not always easy, some real estate executives caution. Mr. Knakal said that while his company's efforts to bring in other professionals had allowed it to grow substantially over the last five years, his firm has also had to make a "substantial commitment" to training programs, which are taught by the company's current employees and generally run two or three months each.
Even with training, newcomers usually take a while to establish themselves in the field. "Commercial real estate is not a quick and easy game, and we are always stressing the long-term nature of this business," Ms. Manley said. "This is a business where lease negotiations can take 12 weeks or more and where 18 months is usually the minimum amount of time" to close projects of 20,000 square feet and more.
Still, some recent career switchers say they relish the change.
Earl L. Segal spent more than 30 years practicing real estate law before he joined the Washington office of Newmark Knight Frank in January as a business adviser. Last week, Mr. Segal said that while he was not necessarily reading fewer stacks of legal documents these days, he had "moved up the line" to working on a broader range of issues.
At Massey Knakal, John Barrett, one of the company's newest brokers, said he hoped eventually to use his love of problem-solving to generate high prices for properties that he is asked to represent. Before joining the company, Mr. Barrett, 42, spent more than 20 years running his own corporate and group travel services firm and then spent six months getting his real estate license.
He recently completed a two-month training program and planned to spend the next two months learning everything he could about the area that he would eventually cover — a sizable segment of Westchester County.
"I had done one thing since graduating from college, and I thought it was time for a new challenge," Mr. Barrett said last week.
So did Marjorie L. Torres, the founder and chief executive of Concrete Stories, a Manhattan company that offers real estate advice as well as brokerage and development services. Ms. Torres, 38, worked as an industrial engineer and then as a Wall Street investment banker before she was sent to Latin America in 1995 to turn around distressed properties. There, she discovered that she preferred some of the more tangible rewards of commercial real estate. "In investment banking you do a lot of deals, but very rarely can you build something that you can actually touch," she said.
Copyright 2006The New York Times
posted by Jones Lang LaSalle NJ News Blog at 11:06 AM
Glenmark Pharmaceuticals Inc. USA, 750 Corporate Drive, Mahwah 07430; 210-684-8000. Terry Coughlin, president. Home page: www.glenmarkus.com
After three years in Princeton, the pharmaceutical company moved from 1 Independence Way to Mahwah. The 10-person office belongs to a company, founded in 1977 in India, that manufactures generic drugs. This office was opened to help file drug applications and market finished formulations in the United States market.
posted by Jones Lang LaSalle NJ News Blog at 11:05 AM
Lander Co. Inc. (ICU), 2000 Lenox Drive, Suite 202, Lawrenceville 08648; 609-219-0930; fax, 609-219-1238. Joe Falsetti, chairman and CEO. Home page: www.lander-hba.com
Lander has signed a lease for 16,000 square feet at the American Metro Center. The firm was represented by Jerry Fennelly of NAI Fennelly. The parent company is Cenuco Inc., which has changed its corporate name to Ascendia Brands, Inc. in order to focus on its health and beauty care products. The Lander division offers private label health and beauty care products. Last year Cenuco had bought some Playtex brands, including Baby Magic, Mr. Bubble, and Binaca. This is the headquarters and it has warehouses in Binghamton, New York and Toronto, Canada.
posted by Jones Lang LaSalle NJ News Blog at 11:04 AM
CBRE Picks Up 378,000-SF Assignment By Eric Peterson Last updated: March 14, 2006 07:41am
PISCATAWAY, NJ-The Hampshire Cos. has picked CB Richard Ellis as the exclusive leasing agent for a seven-building office/flex portfolio totaling just under 378,000 sf here. As reported by Globest.com, Hampshire acquired the portfolio back in October for $30.2 million, or about $78 per sf, from the Syosset, NY-based Blumenfeld Development Group. The buildings were acquired for the firm’s Hampshire Partners Fund VI, a $235-million institutional real estate discretionary investment fund.
According to Deborah L. Haller, asset manager for the fund, availabilities within the portfolio currently include the entire 87,501-sf flex building at 140 Centennial Ave., which is subdivisible. The building is suitable for office, flex or light industrial use, including such special uses as schools, data centers and training space, Haller says, noting that the building “is scheduled for an extensive repositioning, including a complete demolition of its interiors and a new facade.”
Other availabilities for lease within the portfolio also include 240 Centennial, a 21,262-sf lab and R&D facility formerly occupied by Castrol BP. The building is located on a five-acre site and is expandable to double its current size, according to Haller. And 16,745 sf is currently available within the nearby 80 Kingsbridge Rd., a 31,000-sf building on a five-acre site.
“The substantial repositioning that is planned for these properties by Hampshire will increase their availability for a variety of users, we feel,” says Mindy Lissner, senior vice president at CBRE. Lissner is heading the assignment, along with first vice president Carolyn Sica and senior associate Robert Ryan. “We’re confident that we can achieve our investment objectives with it.” Built between 1971 and 1977, the seven buildings are arrayed across 46 acres near Interstate 287 in Middlesex County. Current tenants within the portfolio include Cablevision, GE Healthcare, Rutgers R&D, Enzon Pharmaceuticals and the Gibbs School.
posted by Jones Lang LaSalle NJ News Blog at 11:19 AM
From hospital to housingSt. Francis project, if approved, will see more than 300 new apartments
Ricardo KaulessarReporter staff writer 03/12/2006
After St. Francis Hospital closed last August, longtime local developers Eric and Paul Silverman wanted to preserve as the much of the old complex on McWilliams Place as possible, while transforming it into a building with 225 condo units. But it wasn't necessarily going to be an easy sell to the neighbors between Eighth and Ninth streets near Hamilton Park.
The residents already had rejected two construction plans and held numerous public meetings in order to make sure there would be development that respected the historic character of the neighborhood.The residents recently came out to express their concerns on the proposed St. Francis Redevelopment Project at a meeting of the city's Historic Preservation Commission on Feb. 28. The issues of concern ranged from the noise from construction to the increase in traffic from new residents.
At the meeting, the commission approved the St. Francis Redevelopment Project - which would make the Silvermans' proposal possible - by a vote of 7-0, with conditions such as making the entrances for the retail spaces to be on street corners, and reducing the signage in front of the retail.The plan will go in front of the Planning Board for their approval this Tuesday. Residents may go to the meeting to voice their opinions.The Silvermans purchased the St. Francis property last year.
The Silverman project would be done in three phases, with construction to begin in spring/summer 2006 and completion within three years.The first phase proposed by the Silvermans would restore a 1920s-era building on the corner of Erie and Tenth Streets, construct a six-story infill building on McWilliams Place and Ninth Street, and demolish the hospital's main building near Eighth Street.Also during this phase, Pavonia Avenue would be opened as a cobblestone road. It has been closed for years because of one of the hospital buildings was constructed on top of it. When that first phase is completed, the result would be two 13-floor, 140 foot towers with a total of 225 dwelling units, ground level retail limited to 2,500 square feet and underground parking. There would be a wine shop, a preschool, doctors offices, and health club.
The second phase will be construction of a nine-story 105-foot tall building on the site of an existing garage on Erie Street that will include 65 dwelling units, ground floor retail, and parking.The third phase will see the construction of a new five-story building on a vacant parking lot that will have 35 units of housing but with no parking.The Silvermans also plan to make improvements to Hamilton Park including new lighting and changing the parking setup on McWillams Place from head-on parking to parallel parking, as well as rebuilding the sidewalks.
Getting the project off the ground
The Silvermans spoke recently about their project and the progress they have made.Eric and Paul Silverman have been developers for over 20 years in Jersey City, building a number of luxury condominium and rental apartment complexes including the restoration of the old Majestic Theatre on Grove Street and the Park Hamilton on Tenth Street, and currently the Schroeder Lofts on Erie and Tenth Street.
Their involvement with St. Francis Hospital goes back to around 2000 when they were approached by officials from the Bon Secours Health System, then owners of the hospital."At the beginning, [hospital officials] were thinking about closing one building, a nursing school. But ultimately they closed the whole hospital and sold it," said Eric Silverman last week.Silverman said in 2004, the owners of St. Francis then entered into contract with another developer, Lincoln Equities, who had plans to demolish the entire hospital and build two 20-story towers with townhouses. But after six or seven months, those developers were no longer involved, and in January 2005, the Silvermans made a deal to purchase St. Francis.
By August, the hospital was officially closed.Soon after the purchase, the Silvermans started creating architectural plans and meeting with the Hamilton Park Neighborhood Association. "Meeting with the neighborhood people the three most important things to them was parking, open space and...not exceed the square footage of the existing building with the new building," said Silverman. Silverman said the square footage of the St. Francis complex is 350,000 square feet.Residents who saw the initial plans like the idea of the opening of Pavonia Avenue, but were not on board with the modern design, saying it didn't fit in with the Hamilton Park historic district. Silverman then retained the services of a new architect and made revisions to the plans and after subsequent meetings with the community.
But critics remain
Steve Gold created the 25 McWilliams Watchdog Group in August of last year. The group's intention is to increase the public's knowledge of the St. Francis redevelopment project and to make sure community feedback is taken into consideration.Gold, a Tenth Street resident, said his group initially was the result of an "overreaction" to not having a phone call returned by the Silvermans. But his efforts led to a membership of over 200 people who had questions about the project."After talking to about 50 people, you get the same idea. One of the first things was to let them know what the project was about," said Gold.
In particular, he created a website (www.25mc.org) and an accompanying weblog where visitors can look at the site plans of the St. Francis project and comment on the plans.What Gold has gleaned from feedback onto the group's website were several issues of concern: building density (he feels 225 units is too many for the space); building height (The heights of the buildings slated for McWilliams Place would be 140 feet, which is acceptable for the Hamilton Park area, but he also wants to make sure other buildings are compatible); parking issues, and smaller retail establishments rather than chain stores.And then there's Dan Levin, a resident of Third Street.
Levin in a recent letter to the Jersey City Reporter pointed out several things that concern him about the St. Francis Redevelopment Plan.Levin complained that the "redevelopment plan was written by a potential developer and not City Planning."The meeting will be held Tuesday at 5:30 p.m. at City Hall on Grove Street.
Ricardo Kaulessar can be reached at rkaulessar@hudsonreporter.com
posted by Jones Lang LaSalle NJ News Blog at 11:14 AM
Florham Park still hopeful on Jets training facility Officials confident team will relocate to borough BY NAVID IQBAL DAILY RECORD
FLORHAM PARK -- Officials here remain confident the borough will land the New York Jets' new practice facility in spite of Gov. Jon Corzine re-examining an agreement with the Jets and New York Giants over a new joint stadium they want to build.
As part of the agreementwith the state, representatives said the teams would privately fund a new stadium at the Meadowlands. In turn, the state would purchase about 20 acres of land for each team to build a new practice facility. The Giants agreed to remain in East Rutherford. The Jets, who previously had plans to build a stadium on Manhattan's West Side scratched by local opposition, selected five sites in northern New Jersey that they called ideal for a new practice facility. The team's current facility is on the campus of Hofstra University in Long Island.
The 423-acre former Exxon property, now owned by a joint venture between Gale Co. and the Rockefeller Group, was one of the five site the Jets had named earlier this year. The other places that Jets are considering moving to are the Wood-Ridge Industrial Park in Wood-Ridge; East Orange Water Works land in Millburn; a warehouse facility in Jersey City and a corporate campus in Berkeley Heights.
A decision through a joint announcement with the New Jersey Sports Exposition Authority had been widely expected March 1. It was later pushed back to mid-March. Borough officials previously said an announcement would be made March 16, but now expect it to be pushed back.
NJSEA officials had not returned phone calls and messages seeking comment.
Previously, Gale Co. had wanted to build 500 townhouses on the site, something which caused Florham Park to be sued by Madison and the Chathams.
The plan to build a stadium was overwhelmingly supported. The borough council even issued a proclamation "welcoming" the Jets to town. The Morris County freeholders even sent messages to the Jets saying the county would appreciate the team.
Florham Park Mayor Frank D. Tinari said Monday that he remains confident the Jets would find a comfortable new home in his hometown.
He said the team has already asked the borough and owners of the Exxon site for detailed site plans. Tinari said other towns also submitted similar plans earlier this month.
N.J. Senate President Richard J. Codey told The Associated Press on Monday that he considered the state's six-month-old agreement with the two teams to be "a moral and ethical contract."
Gov. Corzine last week questioned if the $1 billion cost of the stadium without a roof limits the stadium's use. He said he would like to see events such as a Super Bowl, Final Four championships or political conventions held there. On Monday, a Corzine spokesman said the acting state treasurer, Bradley Abelow, was reviewing the deal.
Published reports said the two professional football team's owners would pull out of the stadium deal if they were required to pay for a retractable roof, something that Corzine suggested they do.
If the Jets do move to Florham Park, the site they would be on would be purchased by the state. This means that the borough would not be able to collect taxes on the site. Instead, as the Jets do in other municipalities, the team would enter into an agreement called payment in lieu of taxes, or PILOT, with the borough.
When Florham Park and the other towns were named, the Jets had said the move would generate more than $10 million each year in taxes.
The five-year PILOT agreement would require the Jets to pay 75 percent of the amount they would have owed in taxes in the first year. By the fifth year, they would pay 50 percent of the tax and then the agreement would be renegotiated.
If the Jets do move to the borough, it would be the first time the municipality would have an organization that has the PILOT arrangement, Tinari said.
Some borough councilmen had expressed concern that Florham Park, a Republican town, may be overlooked because of its politics. But others disputed that notion.
"I think the decision now is going to be made on the top levels of the Jets and of the NJSEA,"Tinari said.
While the state assemblyman who covers three communities near or in the town the Jets may go to did not say where he would like to see the team go, he did say concern over the politics influencing the team's decision was not necessary.
"I think that the decision will be made by the Jets, and I don't think the Jets care whether there is a Democratic mayor or a Republican mayor, I don't think the Jets really care much about the political persuasion of the town," said Republican Assemblyman Jon M. Bramnick, who covers a district that includes Millburn, Berkeley Heights and Madison.
posted by Jones Lang LaSalle NJ News Blog at 11:12 AM
