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.
Warehouse Changes Hands Twice in 15 Months By Eric Peterson Last updated: April 6, 2006 08:00am (To read more on the industrial market, click here.)
WOOLWICH TWP., NJ-1200 Ferry Associates, an affiliate of Camden International Commodities Terminal LLC, a regional distribution operation, has acquired Endurance Real Estate Group’s 206,450-sf industrial building at 52 Locke Ave. It is near Exit 2 of the New Jersey Turnpike in this South Jersey community. The announced sale price of $6.45 million factors out to about $31 per sf.
CICT, which effectively moved into the asset while the then-pending sale was under contract, is using the site for the warehousing and distribution of cocoa products. Jim Young, a senior industrial advisor in the Philadelphia office of Grubb & Ellis, represented the Bala Cynwyd, PA-based Endurance. The buyer was represented by Allen Good and Malcolm Shreibman of NAI Mertz Corp. of Mt. Laurel.
The latest deal marks the second time G&E’s Young has sold the same building in 15 months, having arranged the transaction when Endurance bought it in early 2005 from the Del Monte Corp. The food processor had used it for a number of years as its northeastern distribution center, but had vacated the site prior to selling it. The earlier sale price was not released, but industry sources put the number in the $5-million range.
“Endurance originally purchased this property on spec from Del Monte to grow its industrial portfolio in the area,” says Young, who subsequently got the exclusive from Endurance to market the asset for sale or lease. “However, these are smart guys and they decided to capitalize on the continued strong demand by end-users who would rather buy than lease.” “The property fit our investment criteria on many levels,” says Benjamin Cohen, president of Endurance. “The building has always been owner-occupied and we saw an opportunity to reposition it.” The building was built in phases from 1952 to 1962, and underwent a major renovation in 1986. Its 20-acre site has room for expansion of up to another 180,000 sf of building space.
posted by Jones Lang LaSalle NJ News Blog at 12:25 PM
UPDATE: Largest Shareholder Ups Pressure on Wilshire to Sell or Liquidate By Eric Peterson Last updated: April 6, 2006 10:22am (To read more on the debt and equity markets, click here.)
NEWARK-Mercury Real Estate Advisors has increased the pressure on locally based Wilshire Enterprises, demanding the troubled real estate company’s immediate sale or liquidation. The Greenwich, CT-based Mercury is Wilshire’s largest unaffiliated shareholder, owning a reported 14.6% of the company.
The demand comes in a letter to Wilshire’s board, dated today and signed by Mercury CEO David R. Jarvis and president Malcolm F. McLean IV. It’s a follow-up to a letter Mercury sent to Wilshire’s board this past November, a missive that criticized the latter’s turnaround strategy. At the time, Mercury also offered to pursue an acquisition of all outstanding shares of Wilshire for $8.50 per share subject to several conditions.
In the latest letter, the Mercury execs state that, “the only response…to the offer has been confirmation of its receipt. Your lack of a substantive response and continued focus on a seemingly imaginary process with an investment banks leads us to believe that this hiring of an advisor is pure eyewash to somehow suggest that the board is progressing towards maximizing shareholder value.”
The last is a reference to Wilshire’s announcement, in January, that it had hired consultants Friedman, Billings, Ramsey & Co. “to conduct a strategic review regarding alternatives to maximize shareholder value,” Wilshire chairman/CEO Sherry Wilzig Izak stated at the time. Today’s letter is particularly harsh on Wilzig Izak, demanding that she be “immediately terminated” by Wilshire’s board “to end corporate waste.
“We only see a company that has continually wasted corporate profits on exorbitant compensation for a part-time [CEO]…. [We see] a board that is not fulfilling its fiduciary duties to the true owners of the company.” The Mercury execs also demand “an immediate meeting with Mr. Eric Schmertz, the proclaimed independent board member, who should be representing the interests of the shareholders.” A call to Wilshire was not returned by deadline. The latest Wilshire saga began in early 2004 when the company announced a turnaround strategy that, in the short term, involved selling off the company’s holdings in the Northeast to focus on such Sunbelt states as Arizona, Texas and Florida, and in the long term pursuing a possible sale or merger. Since then Wilshire has effectively sold off its New Jersey holdings, including the Wilshire Grand Hotel in West Orange, acquired by an investor group for $12.75 million. Early this year, Wilshire sold an apartment complex in Long Branch for nearly $7 million, and a couple of smaller properties.
posted by Jones Lang LaSalle NJ News Blog at 12:24 PM
Enviro Firm Expands HQ to 30,000 SF By Eric Peterson Last updated: April 6, 2006 10:24am
NEPTUNE, NJ-Groundwater & Environmental Services Inc. has expanded its corporate headquarters location here to just over 30,000 sf. The firm is adding 5,870 sf of space contiguous to its existing 24,200 sf.
GES’ location is within a 72,000-sf building that itself is part of a larger 330,000-sf corporate campus. The location is 1340 Campus Parkway, within Mack-Cali Realty’s Monmouth Shores Corporate Park.
The expansion, an additional lease, was arranged by Bryan Lisowski of Equis Corp. “The two separate leases were reevaluated and negotiated so that they would now be co-terminous for GES,” Lisowski says. “The landlord was able to provide the build-out space and approved locking in the current rental rate on the existing premises so it would expire with the new lease. By extending their current lease, we were able to provide future cost avoidance with the contiguous space.”
posted by Jones Lang LaSalle NJ News Blog at 12:24 PM
Office Vacancies Fall, Rents RiseAmid Positive Signs for Landlords By JENNIFER S. FORSYTHApril 6, 2006; Page A2
Vacancies in U.S. office buildings fell to the lowest level in five years, reaffirming an improving market that is allowing landlords to boost rents.
The office vacancy rate for the 69 largest metropolitan markets dropped to 14.1% in the first quarter from 14.7% in the fourth quarter of 2005, the steepest percentage-point drop in at least seven years, according to a survey by Reis Inc., a New York-based commercial-real-estate research firm. The eighth consecutive quarterly drop resulted from continued strong absorption -- the net change in occupied space -- totaling 15 million square feet in the first quarter.
With those trends, landlords were able to raise effective rental rates -- the negotiated price after concessions to tenants -- an average of 2% in the quarter, the largest increase in 5½; years. Taken together, the increases signal "a very favorable shift in momentum" in the office market, said Reis Chief Executive Lloyd Lynford.
Another positive sign for landlords: Rent concessions, such as a period of no payments, declined to an average 15.5% discount from a high of 19% in the fourth quarter of 2004.
The nationally aggregated numbers mask the uneven distribution of the office recovery. In the 10 markets with the lowest vacancy rates, effective rents grew 5.7% for all of 2005 and 3% in the first quarter of this year. By comparison, in all other markets, effective rents climbed an average of 1.9% last year and 1.5% in the first quarter of this year.
The West Coast and the East Coast continue to benefit from international trade, job growth and steeper barriers to entry in some markets where construction is constrained. The Midwest and the South lag behind. Landlords in Cleveland and Pittsburgh, as well as the Carolinas cities of Greensboro, Charlotte and Columbia, actually lost ground on effective rental rates during the quarter.
One market with a noteworthy turnaround is Phoenix, which Reis said had the largest increase in effective rent in the past three months. Office space has been in demand there because of strong job growth, particularly in finance and insurance, said Phoenix-based Mike Beall, senior director for commercial-real-estate-services firm Cushman & Wakefield.
Also helping Phoenix is that office developers have been fairly restrained in their building, with only about one million square feet of new office space added in all of 2005. Mr. Beall notes that 2.6 million square feet should be completed in 2006.
posted by Jones Lang LaSalle NJ News Blog at 12:23 PM
WP Carey Sells 105,000-SF Warehouse By Eric Peterson Last updated: April 5, 2006 09:56am (To read more on the industrial market, click here.)
PISCATAWAY, NJ-WP Carey & Co. has sold the 105,000-sf warehouse building at One Possumtown Rd. here. The building traded for $3.85 million, or just under $37 per sf. However, the asset isn’t likely to be a warehouse much longer--buyer Lackland Associates, a local group, is said to be planning to turn the site into townhouses. Specific plans have not been announced and Lackland Associates could not be reached for comment.
"For this disposition, we worked closely with WP Carey," says Ward Greer, first vice president with CB Richard Ellis. Greer and CBRE colleagues Robert Pine and Patricia Riedel arranged the sale. "For WP Carey, this was a non-performing warehouse asset." Largely vacant, the building had recent been used for warehouse purposes by Anacom Systems/Fiber Span, SSI America and Proterion Corp.
The sale by no means takes WP Carey out of the local market. Just a year ago, as reported by GlobeSt.com, the New York City-based investment firm bought the six-building, 891,000-sf Telcordia Technologies headquarters campus for $119.3 million, or $134 per sf. Telcordia remains on-site with its office, lab and related operations under the terms of the sale-leaseback agreement.
posted by Jones Lang LaSalle NJ News Blog at 12:22 PM
Accounting Firm Relocates HQ By Eric Peterson Last updated: April 4, 2006 12:50pm
BRIDGEWATER, NJ-The independent regional accounting and consulting firm Amper, Politziner & Mattia has relocated its Flemington office to Steiner Equities’ 750 Route 202 here. The firm leased 19,355 sf representing the entire fifth floor of the 104,410-sf, six-story asset, and added another 4,500 sf on the fourth floor for its Amper Financial Services affiliate.
"Our client relocated this branch office because they had grown out of a building in which they were the sole occupant," says Sean Brady of Cushman & Wakefield of NJ, East Rutherford, who represented the tenant along with colleagues Ed Duenas and Matt Seltzer. The Roseland-based Steiner Equities was represented in-house by Doug Steiner.
"The lease and expansion has effectively doubled its size," Brady says of Amper, Politziner & Mattia, which has its headquarters in Edison. "This is a new building located adjacent to a recently completed strip mall that offers great amenities."
The building was actually completed in late 2001, and its major tenants include Synchronoss Technologies and Sears. It also has a ground-floor retail component of about 5,000 sf. On the tenant side, besides the C&W trio, AP&M’s David Politziner and Jack Nahama managed the relocation project and assisted in negotiating the lease.
posted by Jones Lang LaSalle NJ News Blog at 12:22 PM
Housing cut from plan for Ford site Edison has concerns over debris with PCBs Thursday, April 06, 2006 BY SULEMAN DIN Star-Ledger Staff
In preliminary plans for the former Ford Edison assembly plant site, Secaucus-based developer Hartz Mountain Industries envi sioned a center including big-box retail, office space, movie theaters, a hotel and 275 age-restricted condominiums.
But with recent revelations that thousands of tons of PCB-tainted concrete debris were trucked off the site to developments around the state, and thousands more still remaining on site, the township council and Mayor Jun Choi agree that housing cannot be a part of a redevelopment proposal.
"After all the concerns about safety from residents, we'll have to go back to the drawing board," said Councilman Peter Barnes III. "The housing element will have to come out."
The automaker is awaiting state approval to begin cleanup efforts at the former assembly plant site. In response to residents' concerns, the state Department of Environmental Protection has done soil sampling at 12 residences near the former plant and at Paterniti Park for PCBs -- polychlorinated biphe nyls -- which have been classified as a probable cause of cancer.
The DEP and the Attorney General's Office are investigating how debris with low levels of PCBs left the demolition site and ended up at numerous residential and commercial construction sites across the state.
Choi said the issues over the contaminants raised questions about developing housing at the site. Currently, Edison's master plan has no allowance for housing on the Ford site.
"The administration is concerned about proposals to put residential housing there, even those that are age-restricted," Choi said.
In a statement yesterday, Hartz Mountain said it is reworking its plans while Ford finishes cleaning up the contaminated debris. In January, it presented a set of preliminary sketches for the 98-acre site, which were widely denounced by residents.
"Our redevelopment plan is under consideration, and no determination has been made as to its ultimate composition," said Walter Smith, senior vice president of Hartz Mountain Industries.
"We await the regulatory process to run its course, and we are confident that we will be able to make a compelling presentation about our vision for the site soon."
Councilman Charles Tomaro said Choi, Hartz Mountain representatives and council members have been meeting informally since November, trying to agree on a vision for the site.
Tomaro said he has tried to keep an open mind about the site's development, arguing that the township needs more senior hous ing. But following reports about the PCB-tainted debris, he said council opinion has hardened against allowing housing at the site.
"So far, what they have presented is unacceptable," Tomaro said. "Nothing gets developed until the council changes the zoning. They've got to cooperate with us."
Councilman Anthony Massaro said the council will not consider the Ford site's redevelopment until every safety concern had been addressed.
The goal of preventing further residential development in Edison, Massaro said, is another reason why the township should not agree to housing at the site.
No date has been set for another public session on the site's redevelopment.
The assembly plant was closed in February 2004, and demolition began later that year after Ford sold the 98-acre site to Hartz Mountain. Ford officials said 166,000 tons of PCB-contaminated debris were moved from the site and another 93,000 tons remain there.
posted by Jones Lang LaSalle NJ News Blog at 12:21 PM
Stripped-down factory slotted for redevelopment Pharmaceutical plant cleared for overhaul Thursday, April 06, 2006 BY JONATHAN CASIANO Star-Ledger Staff
The West Orange Planning Board voted last night to designate the abandoned Organon pharmaceutical plant as a redevelopment area, urging the township council to accept its recommendation and begin soliciting proposals for the site.
The recommendation, which cleared the nine-member board by a vote of 5 to 4, paves the way for a complete overhaul of the 11-acre site, either by the township or a town-approved developer. West Orange holds an option on the property and could purchase it outright for $4.5 million before the option expires in September.
The planning board's recommendation came after a presentation by Stuart Portney of The Metro Company LLC, a Jersey City-based consultant hired by West Orange to study the property.
In his presentation, Portney told the board that the 175,000-square-foot factory was "functionally obsolete" after being gutted and abandoned by Organon in 2004.
He said the building's boilers, water purifiers and electrical conduits had all been stripped out and sold off, leaving the plant "virtually unusable" for another pharmaceu tical company or other enterprise.
"The entire building has been fully gutted, literally from stem to stern," Portney told the board. "Everything has been ripped out."
His assessment of the site found favor with five of the board members, including Councilwoman Susan McCartney, who said she wanted the township to steer redevelopment efforts at the factory.
"I would want control of that to see what the plans are and decide what's best for the town," she said.
But the presentation was not enough to convince the entire board.
Some panel members, as well as several residents at the meeting, said they felt the property's future should be left up to the free market, noting that it sits in an upper- middle-class neighborhood with easy access to major highways.
"People move all the time and businesses have problems all the time, and it seems that they generally solve those problems without the interdiction of the municipality," said John Schmidt, a mayoral candidate who spoke out against the designation.
The Organon site was first put on the table for redevelopment in January, when Mayor John McKeon suggested that it could be bundled with other properties in the township's downtown redevelopment zone to entice developers who have so far been reluctant to tackle that area.
The township also is considering the creation of a third redevelopment area encompassing Town Hall and the municipal complex. If that area is designated for redevelopment, the township could move its municipal complex to the Organon site and replace it with some mix of retail and residential development. McKeon has called the concept unlikely, and many residents have spoken out against relo cating Town Hall.
But The Metro Company filed a report in February stating that Town Hall, police headquarters and the West Orange Public Library all met the necessary redevelopment criteria, and the planning board will decide whether to recommend a formal redevelopment designation.
The panel was scheduled to debate that issue last night, but postponed its review of the municipal complex until its June 7 meeting, scheduled for 8 p.m. in council chambers.
posted by Jones Lang LaSalle NJ News Blog at 12:20 PM
Lawrence E. Fiedler I read with interest Jeffrey Lacilla’s article in the March 2nd issue of The Slatin Report, "What Price Value?" Mr. Lacilla assumes that the inflationary pressures brought about by increases in commodity prices such as oil, along with the Federal deficits resulting from the Iraq war and the war on terror, will lead to higher short and long term interest rates and consequently a reduction in property prices.
We presently are experiencing a yield curve inversion where short term Treasury interest rates have moved above the 10-year Treasury interest rate. Bill Gross of PIMCO, one of the largest U.S. bond firms, stated in a January 2006 article that inversions such as what we are now going through have historically preceded U.S. economic recessions by 12 to 18 months. If history is in fact a precursor of the future, as Mr. Gross believes, then we will be seeing a substantial slowdown in our economy by the end of 2007.
The 10-year Treasury interest rate has long been the base rate for all long-term investments. Historically within that rate has been the investing public’s attempt at recovering perceived future inflation-driven asset-value losses, plus approximately a 1.5% to 2% non-risk real internal rate of return. This non-risk real internal rate of return has never fluctuated materially during the past 50 years. Therefore, the key moving element within the 10-year Treasury has been the perception by investors of the average annual inflation rate for the next 10 years.
A recent study by a major financial institution concluded that the present risk premium (the Internal Rate of Return historically being projected on newly acquired assets) in excess of the current 10 year Treasury rate (3%-4%) is very close to the historical risk premium they have projected for new acquisitions in the past. In other words, when the 10-year Treasury was 13%, risk premiums reached another 3% to 4% above that to 16% to 17%; today, with the 10-year Treasury at about 4.8%, projected Internal rates of return for new assets are now roughly 7.8% to 8.8%.
The conclusion that I draw is first that the public's perception of inflation for the next 10 years is now about 2.8% to 3.3% (4.8% Treasury rate less a 1.5% to 2% non-risk real rate of return). Inflation perceptions are a result of all the current commentaries and gut feelings by investors today. The prediction of a future recession is also being taken into account today. If the value of real estate is mainly predicated on the perception of future inflation, this perception will only change if a surprise event occurs that changes the 10 year inflation expectations of the investing public. Obviously, any circumstance being discussed now have been taken into account. It is only those possibilities (surprises) that we are not aware of that will change the perception of future inflation and therefore the future value of real estate.
Lawrence E. Fiedler is the president of JRM Enterprises, a real estate investment concern in New York City, He taught real estate investment and finance at New York University for more than 25 years. Jeff Lacillla, who also teaches real estate finance at NYU, is an associate at JRM Enterprises.
posted by Jones Lang LaSalle NJ News Blog at 12:20 PM
The Newark Alliance Introduces an Aggressive Economic Development Initiative to Spur Business and Job Growth
NEWARK, N.J.--(BUSINESS WIRE)--April 5, 2006--
The OpportunityNewark Plan includes strategies to link local residents with thousands of jobs expected to be created in the city over the next five years.
The Newark Alliance and a broad coalition of Newark organizations today released an aggressive five-year economic development strategy designed to attract and retain businesses and prepare Newark workers to fill jobs in the city's key growth industries.
The initiative, called OpportunityNewark, is a product of a partnership between the Newark Alliance, the City of Newark, and the City Advisory Practice (CAP) of the Initiative for a Competitive Inner City (ICIC), a Boston-based national nonprofit economic development organization. Over the past eighteen months, more than 400 Newark stakeholders- Fortune 500 companies, small business owners, community organizations, local and state policy-makers, representatives of the higher education community, and the faith-based community - contributed to the plan's development.
"This is a step-by-step results-oriented plan that is intended to make Newark and its citizens formidable competitors in the economy of the 21st century," says Al Koeppe, president and CEO of the Newark Alliance and co-chair of OpportunityNewark. "It is a fact-based and inclusive approach to economic development."
"Opportunity Newark has set some challenging but achievable goals and objectives designed to bring business to Newark and to prepare Newark's residents with the necessary skills to fill the jobs created through this effort," said Arthur Ryan, chairman and CEO of Prudential Financial, Inc. "It is a market-driven economic plan that provides an aggressive blue print for new businesses, job creation and economic growth."
The economic development plan leverages Newark's key competitive advantages: strategic location, a vibrant port, and a strong base of higher education and health care institutions. The plan anticipates that future job creation will occur in the transportation, logistics and distribution services cluster, as well as in the health services, education and knowledge creation and entertainment, arts and retail clusters. The goal is to improve Newark's competitiveness as a business location and to prepare and connect Newark residents to jobs expected in the future. It is projected that over 6,000 new jobs, each year over the next five years, in the targeted clusters will be added to Newark's economy.
To stimulate job creation at that pace, OpportunityNewark prescribes an aggressive action agenda that includes specific recommendations as well as benchmarks to measure progress. The recommended actions address making public policy changes to remove barriers to employment, implementing workforce development and training programs and improving communication channels both for the job provider and the job seeker.
"OpportunityNewark's goal is to prepare local residents for jobs that will be created over the next five years in the targeted clusters," said Professor Michael Porter, Harvard Business School professor and founder and chairman of ICIC. Professor Porter will deliver the keynote address at OpportunityNewark's launch. "The most critical part of the overall process, in reality, is just about to begin - the implementation. The fact that you have created such momentum already will ensure your success."
The strategic action plan also addresses such issues as the shortage of truck drivers and other port workers, the need to upgrade Newark's technological capabilities, and the creation of a promotion campaign for the hospitality sector.
The 90-page report also recommends:
-- Creating a regional council to develop a shared vision for the Port's future; -- Freeing up valuable space around the Port by redesigning parking structures and storage facilities; -- Developing a central placement agency for truck drivers to address an endemic workforce shortage; -- Preparing Newark's residents for technology-related jobs by setting up an industry -led training consortium with participating bio-tech, health services, and computer and electronics companies; -- Enhancing the real-time web site to be the one-stop portal for information on Newark "at work" , "at home" and "at play"; and -- Launching a Conventions and Visitor's Bureau to ensure marketing and branding activities are managed.
ICIC was founded by Harvard Business School Professor Michael E. Porter, a world-renowned authority on strategy and competition. The organization has been studying the economic condition of the largest 100 American cities and is working to revitalize inner cities across the country. Newark is the latest in a series of initiatives that include economic growth programs in Oakland, Chicago, Louisville, Boston and Milwaukee, Reading, PA, and Brooklyn, NY.
posted by Jones Lang LaSalle NJ News Blog at 12:19 PM
REIT Buys Washington, DC Melrose Hotel for $76M by JT Redmon
The Highland Hospitality Corp. of McLean, VA acquired the Melrose Hotel in Washington, DC for $76 million, or nearly $316,700 per room. It has an average occupancy calculated at 70%. The lodging REIT has opted to use Crestline Hotels & Resorts Inc. to manage the property, which will be marketed as an independent hotel. Purchased from Bristol Hotel Investors LP, this acquisition gives Highland Hospitality Corp. a total of 7,621 rooms in 12 states, the District of Columbia and Mexico. The 240-room hotel, at 2430 Pennsylvania Ave. NW in the District's West End, between Georgetown and the Foggy Bottom Metro station. The Washington, DC office of Jones Lang LaSalle represented the seller while the buyer had no broker.
posted by Jones Lang LaSalle NJ News Blog at 12:18 PM
Sandoz Inc. (ADR), 2400 Route 130, Dayton 08810; 732-274-2400; fax, 732-274-8989. Francois Menard, manager. Home page: www.sandoz.com
The Sandoz facility at 2400 Route 130 in Dayton is moving to North Carolina. The facility expects to close completely by June. Sandoz, a Novartis company, is a world leader in generic pharmaceuticals. This facility was formerly known as Invamed. Previous owners have included Geneva and Duramed Pharmaceuticals. Another division of Sandoz retains its office at 506 Carnegie Center with 150 employees.
posted by Jones Lang LaSalle NJ News Blog at 2:56 PM
What's in a Building's Name? More Than Meets the Eye By ALISON GREGOR
The MONY Building, a Midtown Manhattan office tower named more than a half century ago for the Mutual of New York insurance company and the inspiration for the 1960's pop hit "Mony Mony," may soon have a new name.
About half of the 600,000-square-foot office tower at 1740 Broadway, at 56th Street, is available for lease. In connection with a potential tenancy, the building's owner, Vornado Realty Trust, is offering to lease the lighted signs at the building's pinnacle, marketing them as "an unprecedented skyline branding opportunity." As for MONY, it was acquired by AXA, the French insurance company, in 2004.
Vornado would not disclose the price to rent the signs, but a broker at Colliers ABR reported that the sign was being listed at $1 million a year — less if a tenant took all the space being offered.
Industry experts say such a naming opportunity is rare. "Simply put, a great name can help put a building on the map," said Paul N. Glickman, an executive vice president at Cushman & Wakefield.
The struggle to find the right name for a building is not uncommon in New York. An address is easy to forget, but some buildings are so known that the name suffices: the Empire State Building, for instance, or the Flatiron Building, the Chrysler Building or the Woolworth Building.
Then there are buildings whose names give corporations a plug every time they are spoken: the MetLife Building, the General Electric Building, the McGraw-Hill Building, the General Motors Building.
For both owners and tenants, deciding what the name of a building is worth can be an important strategic and competitive decision. A landlord must decide whether to name a building or hand over those rights to a tenant. Typically, companies that have a stake in developing a building or that have leased a huge amount of space may negotiate the naming rights.
One highly publicized building under construction in Manhattan is the product of a joint venture of the Durst Organization, a commercial developer, and Bank of America, one of the nation's largest consumer banks. When it was first announced, the 54-story skyscraper, going up diagonally across the Avenue of the Americas and 42nd Street from Bryant Park, was referred to as One Bryant Park, suggesting that this building was so important and so well placed, it did not need a real mailing address.
Lately, the developers have been using a different name: the Bank of America Tower.
"It's a statement to the world that we are a major player in one of the world's biggest financial markets," said John Saclarides, a real estate executive with Bank of America.
Sometimes it's hard to put a price tag on naming rights, as they are often negotiated as part of a package leasing deal, but commercial real estate brokers say they are not cheap.
"It's a valuable commodity that can be sold and resold by the landlord," said Michael Colacino, president of Studley, a brokerage firm.
Often intertwined with the naming rights is the issue of signs, like those on the MONY Building, which can often be a costly proposition. For instance, a tenant could lease the four exposures just below the top of the Condé Nast Building at 4 Times Square for $4 million a year. Currently, they are not leased and a numeral 4, several stories tall, occupies the space.
The effectiveness of this type of branding is hard to quantify. Many people still refer to the skyscraper atop Grand Central Station as the Pan Am Building even though an enormous MetLife sign was hoisted onto its crest in 1992. "When they changed over the MetLife sign from Pan Am, it was $1 million just to do the construction work," Mr. Colacino said. "So we're talking about things that are multiples of seven figures."
The tradition of naming office buildings in the city is one of convention rather than law, although altered addresses are subject to approval by the borough president's office. Though the city's tax rolls have many office buildings listed by name, there is no official registry of building names.
"Years ago, it was very prestigious to have your name on a building," said Michael Laginestra, a vice chairman at CB Richard Ellis. "You can go around Manhattan and still see these small buildings with names on them in old block letters. That culture prevailed."
Nowadays, the approximate life span of a building name in the city is about a decade, said Barry Lewis, an architectural historian at Cooper Union. "In Europe, we know palaces from their royal associations, which last forever," he said. "In New York City, forever's about 10 years. New York changes a lot faster than the human mind can absorb."
Recognizing the difficulties of renaming an old building, many companies would prefer to start from scratch. Bank of America decided to build its own tower, one with 2.1 million feet of available space; the bank has leased more than 1.6 million feet.
"The community can name a building whatever it wants," Mr. Saclarides said. "It's more of an art than a science. But when you construct a new building and name it, that is the most sure-fire way to ensure the building will be known as that name."
The company knows something about names that are not universally embraced. Bank of America Plaza at 335 Madison Avenue, at 43rd Street, has existed for some time but it did not catch on as widely as anticipated.
Sometimes a building's name is a way of adding prestige, thereby attracting tenants. An example is Park Avenue Plaza, Mr. Laginestra said. "Park Avenue Plaza is actually 55 East 52nd Street," he noted. "But it's right off Park Avenue, so with the name, they dragged it to the avenue."
Some names could drive away potential tenants. "Would Ford want to be in the G.M. Building? Would Gimbel's want to be in the Macy's Building?" Mr. Glickman asked. "There can be drawbacks to a landlord naming a building."
Companies in some industries — banking and mass media, for instance — are frequently eager to be in buildings that bear their names, while others, like law firms, are more discreet, said Marcus Rayner of Cresa Partners. There are some tenants who reject naming rights, but negotiate instead to keep a competitor from being given those rights.
Since the attacks on the World Trade Center, some companies have become wary of publicity. "Some tenants like to do their business out of the spotlight, which is difficult to accomplish if the building is branded," Mr. Glickman said.
posted by Jones Lang LaSalle NJ News Blog at 2:56 PM
A Suburban Builder Heads for the City By LISA CHAMBERLAIN
Toll Brothers is perhaps the best-known builder of luxury homes in the country, having honed the art of upper-middle-class living into the science of large-scale suburban development. But now the company is entering the New York City real estate market, with five sites in various stages of development from the East Village to the Gowanus Canal neighborhood in Brooklyn.
For a national homebuilder that has specialized in upscale suburban houses, the obvious question is, Why New York City and why now?
"The better question is, Why didn't I do it earlier?" said Robert I. Toll, chairman and chief executive of the $6.5 billion company, which is based in Horsham, Pa. "We weren't ready for urban development. We're a conservative company. There was too much risk. It required a different set of skills. But we picked up some urban skills in Hoboken and Jersey City, and built some towers in Florida. So the question then is, Why not the boroughs?"
Toll Brothers will be investing approximately $500 million to build 1,000 condo units in Manhattan, Queens and Brooklyn.
Two years ago, Toll Brothers hired David Von Spreckelsen, who has worked in real estate in New York City for nearly 20 years, most recently as director of real estate development for Silvercup Studios in Queens. Mr. Von Spreckelsen set about securing plots in established areas that still had room for improvement, but were also near transportation and other amenities.
Working for a conservative company, however, has required Mr. Von Spreckelsen to educate his boss. The first purchase recommendation he made, two blocks along the Gowanus Canal in Brooklyn, was initially rejected by Mr. Toll.
The two-mile canal, which passes through a once heavily industrialized area of Brooklyn, would certainly seem like an unlikely place for Toll Brothers to make its first move in New York City. But Mr. Von Spreckelsen prevailed when he was able to show that not only was the Gowanus area likely to be rezoned (an action that is still pending), but that the canal was being cleaned up after nearly 30 years of community activism. And the site, along Bond Street between Carroll and Second Streets, is only two blocks from the Carroll Gardens subway stop and the rapidly evolving restaurant row on Smith Street.
"It's a unique spot," Mr. Von Spreckelsen said. "It's not Venice; I don't expect to see gondolas up and down the canal. But people are excited about reactivating this waterfront."
Mr. Von Spreckelsen envisions turning First Street into an entry point to the canal and has promised a boat launching dock and storage space to the Gowanus Dredgers, a canoe club. On either side of First Street will be approximately 200 housing units each between Carroll and First and between First and Second Streets. Even though this was Toll's first purchase in New York City, it is expected to be the last of the five developments to be completed because construction will not begin until the current industrial zoning has been changed to allow residential development.
On Third Avenue between 13th and 14th Streets in Manhattan, Toll Brothers has begun excavation for One Ten Third, a 77-unit 21-story tower that will have one- to three-bedroom units priced at $850,000 to $2.2 million, the upper limit of all the New York City apartments being built by the company. The 16th-floor units will have terraces; other floors will have balconies. The roof will have both a common area and partly roofed private spaces, equipped with electrical outlets and running water and ranging from 250 to 500 square feet, which will be for sale. There will be ground-floor retailing as well. Sales are to begin this summer, and the projected move-in date is the spring of 2007.
Demolition has begun on another purchase in Long Island City, Queens. The L-shaped plot at 48th Avenue and Fifth Street will become a building of 118 units, from studios to three bedrooms, starting as low as $350,000. Some units will have private backyards. There will also be bike storage, 24-hour concierge service and enclosed parking available for purchase. Sales are to begin in the fall, with an expected move-in date of spring 2007.
Mr. Von Spreckelsen also secured two sites in Williamsburg. At Kent and North Eighth Street will be North8, a building that is restricted to six stories but will overlook a new waterfront park with unobstructed views of the Manhattan skyline. In addition to 40 apartments, there will be a series of six town houses along North Eighth Street that will be part of the building but will have separate entrances. Sales will begin in early summer, with a projected move-in date of January.
The most recent acquisition is a joint venture to build three high-rise towers on the Williamsburg waterfront with L&M Equity and RD Management. The first tower to go up is to be 164 Kent, designed by FxFowle Architects. It is to have 180 units (studios to three bedrooms) and a yoga studio; half of the apartments are to have balconies. Plans for the other two towers are not yet available.
Some real estate specialists say that Toll Brothers is moving into the New York market for two reasons. The obvious one is purely a growth opportunity. But the other is that the company's traditional market — single-family suburban development — is being curtailed both by local ordinances designed to limit growth and by a lack of premium buildable land.
In recent months the company has also encountered problems related to broader market trends; Toll Brothers announced in February that the company was experiencing increased cancellations of new home orders, and that new contracts fell by 21 percent compared with the previous year.
"They have to move beyond their primary market: high-end single-family housing," said Gregory E. Gieber, an equity analyst who follows homebuilders for A. G. Edwards & Sons. "That market is declining right now. Urban development is riskier for the company, but diversification is usually viewed as a good thing. The question is, there's a lot of construction going on. We haven't seen overbuilding in New York in a long time, but it has happened."
John K. McIlwain, senior resident fellow for housing at the Urban Land Institute, a nonprofit research and policy organization based in Washington, said, "All the big builders are having land problems."
"What I'm assuming is that Toll Brothers are ambiguous about the exurban market, the farthest-out areas," he said. "One way to respond to that is to be pushed into urban markets. And now average condo prices are higher than single-family prices for the first time ever. That's a trend that will continue because you have a strong reurbanization."
Mr. Toll disagreed that suitable suburban land was becoming increasingly limited, and he said the company was not being pushed into the urban market, but pulled in by its vibrancy. "The thrust into urban development for me and other homebuilders is not because we don't have the available product in suburbia, but rather because you have a new market here. You might say, 'What new market? New York's always been here.' But there's a lot of urban demand that wasn't there before."
Jon Epstein, senior director of the New York capital markets group for Cushman & Wakefield, who sold the Long Island City site to Toll Brothers, said that beyond the purely financial reasons for moving into this market was an image issue: "If you want to be seen as a real national player," Mr. Epstein said, "you have to be in New York at some point."
posted by Jones Lang LaSalle NJ News Blog at 2:55 PM
Has been asking agents for a reported half-million-foot space in Midtown. Among the targets are 1095 Ave. of the Americas, the 1.228 million foot soon-to-be-reinvented former Verizon Building. Like nearly all the financial firms, Lehman Bros. is facing a huge space crunch.
posted by Jones Lang LaSalle NJ News Blog at 2:54 PM
Will shift its U.S. headquarters from Plano, Texas, to New Jersey under its acquisition of New Providence-based Lucent Technologies, but company officials have declined to say how the move will affect Alcatel's 2,350 workers in the Dallas suburb.
posted by Jones Lang LaSalle NJ News Blog at 2:53 PM
Morristown is seeing green at office building Parking authority's home planned to beenvironmentally safe
BY MICHAEL DAIGLE DAILY RECORD
MORRISTOWN -- The next green that could bring Morristown renown is not another park, but an office building.
The 27,200-square-foot, four-story headquarters of the Morristown Parking Authority -- part of the extensive Epstein's redevelopment project -- is being planned as Morristown's first "green" building.
Its developers aspire to national voluntary planning and construction standards called LEED --Leadership in Energy and Environmental Design --that are being applied to new construction and renovations across the country, and, they said, make environmental and economic sense.
$20 million project
The $20 million project also includes offices for the Geraldine R. Dodge Foundation, The Morristown Partnership, a training site with parking for The Seeing Eye, and an attached 800-space parking deck.
The building also is a challenge to the Morris County community to change its ways of thinking about planning and constructing new projects.
"The goal is sustainable development," Dodge Foundation comptroller Cynthia Evans said. "This will be the first LEEDS building in northern New Jersey, a potential model for future development, and an example for planning boards to show how they can adjust ordinances to encourage green development.
"When they walk in and see cork or bamboo floors, they will know that it is both beautiful, cost effective and sustainable -- a showcase of what can be done through design and with electrical and mechanical systems."
The building's planners will discuss the project at the Whippany River Watershed Action Committee's meeting at 5:45 p.m. Wednesday at the Morris County Library on East Hanover Avenue.
The building will use renewable energy sources -- geothermal heating and cooling and solar -- potentially recycle water for cleaning and irrigation of a rooftop garden, use reflected sunlight to illuminate offices and natural materials and fabrics to outfit the interior spaces that will produce a less toxic environment that should increase worker productivity, designers said.
Embodies mission
For the Dodge Foundation, the building also is an opportunity to be a part of a project that embodies its mission.
David Grant, executive director of the Dodge Foundation said the discussions leading to the decision to build a green building began last year after he challenged the foundation's board to consider how its physical space and actions reflected its stated larger values to promote community sustainability.
"I asked the board to consider the question: 'Can we live our values?'" Grant said.
The answer began to take shape when Dodge board members and staff began to drive hybrid cars, which now number 10, he said.
The discussion moved to the issue of how to make more real the foundation's goal of supporting a sustainable community and growth in Morristown, and "how to provide leadership in the community," Grant said.
Part of that answer, he said, was to plan to move the foundation's office from its current Morris Township home on Madison Avenue into Morristown.
"We are out on Madison Avenue between Friendly's and the hospital and you can't exactly walk to work," Grant said. "We wanted to be in Morristown, because Morristown is our home. We feel we can better support the community if we move to Morristown. Our objective is to be part of neighborhood life."
Grant said the new office will be a demonstration building and the foundation hopes to document its planning and construction process as a training tool for future green development in the county. Studies have also shown, he said, that worker productivity increased 1 to 2 percent in green buildings.
High costs offset
George Fiore, executive director of the Morristown Parking Authority, which will be the landlord of the new building, said the initial higher costs of planning and construction will be offset by lower long-term operating expenses.
"As a landlord, I like the idea of a 35 percent cut in electrical costs," Fiore said. "Also, as a public building, we are able to make a statement about such development meeting LEED standards, and improving quality of life for workers and visitors. We are excited to be a part of this."
The planned building also fits into the mission of the Whippany River Committee, said Freeholder Jack Schrier of Mendham Township, one of the founders of the watershed group.
The group's mission is to promote ways to clean up the watershed, Schrier said.
"A recent U.S. Geological Society survey showed significant water pollution comes from everyday activity related to development and more people. Any small step to reduce pollution is a giant step," he said.
The LEED standards were developed by the U.S. Green Building Council and have been adopted by cities like Pittsburgh and Chicago to govern all future construction.
In New Jersey, state government supports the green development with funding programs in the departments of community affairs, environmental protection, financing agencies and the Board of Public Utilities.
Federal research showed that tenants can save about 50 cents per square foot each year through strategies that reduce energy use by 30 percent, the USGBC reported. Over the life of a five-year lease of 20,000 square feet, the savings could reach $50,000.
Evolution in construction
Green buildings -- actually "integrated sustainable structures," said Paul Lilli of Gensler, who is designing the interior of the parking authority building -- are an evolution in the construction business. Gensler also is involved with PNC Bank's efforts to create green branch offices, and worked on the Goldman Sachs & Co.'s Jersey City headquarters, one of the state's largest sustainable buildings, he said.
Lilli said the Morristown project will include geothermal heating and cooling, the reuse of gray water for cleaning, stormwater for irrigation of a rooftop lawn and garden, solar power, and reflectors on the outside of the building that will direct sunlight to interior spaces where light sensors will turn lights on or off as needed.
The heating and cooling system will be built under the floor and will allow individuals to control the temperatures of their work space, he said.
Glenn Haydu of Minno and Wasko Architect and Planners of Lambertville, the designers of the building's exterior, said New Jersey has made millions of dollars in grants and loans available for green building development.
In Morristown, Haydu said, opportunities for further green development were written into the redevelopment plan for the Epstein's site.
Slowed by conflicts
Conflicts between existing ordinances and the use of green technologies can slow the development of such projects, said developer Bill Asdal of Chester, who has been waiting for two years to get a certificate of occupancy for a bed-and-breakfast he would like to open in a historic building he rebuilt in Califon, Hunterdon County.
It would not be such a sore point if the project was not being hailed at the first zero-energy home rebuilding project in the country, Asdal said.
PATH, a public-private partnership for advancing housing technology, said the project was certified by the National Association of Home Builders Research Center.
Asdal said he bought a dilapidated shell of a Civil War-era building and turned into a 4,000-square-foot bed-and breakfast with a slew of green technologies from solar panels, high efficiency windows and newer insulation materials.
Using less energy
The project also uses a geothermal energy system that draws 55-degree water into the system and requires less energy to heat it to temperatures required for heating the buildings or human use, he said on-demand water heaters also cut consumption and cost, Asdal said.
The clash with the local board, he said, is that solar panels used on the project are not compatible with the local rules governing the historic district on Route 513 in Middle Valley along the Raritan River.
The need is for towns to update local ordinances to take into account new technologies, he said. While early solar panels were bulky and detracted from the appearance of a building, newer solar panels are thin and can be installed unobtrusively, he said.
Haydu said the developers of the Morristown green building are learning how to fit a green building into a historic district. For example, he said, the building's solar panels will be installed outside the public's direct view and planners are considering the choice of colors and materials that will better allow the reflective light panels to satisfy the needs of the historic zoning.
Jennifer Cronin, marketing director of Morris Partnership, said the ability to settle these issues in Morristown could have great impact on the way the town is developed in the future.
"For a business and historic zone, it is a matter of how to make both sides feel they have been heard," she said. "Change can be hard to take. Getting both sides together not all is black and white; it is a matter of showing how the building fits in. It requires education and cooperation from both sides."
Cronin, who has been attending meetings to choose furniture and carpeting for the agency's office, said, "what's important is that Morristown is changing. If we get a green building in Morristown, others could follow. In the future, Morristown will build up, not out. This building can show the way to build in a more effective, smart way."
posted by Jones Lang LaSalle NJ News Blog at 2:51 PM
N.J. economy shows evidence of slowdown By JEFFREY GOLD The Associated Press
NEWARK -- New Jersey's economy slowed in the second half of 2005, and early 2006 offers few encouraging signs, according to reports released Tuesday.
In February, unemployment rose, housing permits declined and hours worked in manufacturing fell, the Federal Reserve Bank of Philadelphia found.
Meanwhile, the Federal Deposit Insurance Corp. reported that most new jobs in 2005 were lower-paying, rising home prices stabilized and reduced office vacancy rates may not be sustained.
However, the monthly forecast from the reserve bank projected moderate growth for the New Jersey economy through September, noting that initial unemployment claims decreased in February while payroll employment rose.
The findings affirm that New Jersey remains in the slowest expansion since World War II, said James W. Hughes, dean of the Edward J. Bloustein School of Planning and Public Policy at Rutgers University.
"Our conclusion is that all the national statistics show that high-end corporate America is expanding quite briskly, but it is doing that expansion almost exclusively outside New Jersey," Hughes said. "New Jersey has secured a reputation over the last four years of being a hostile place to do business."
From 2000 to 2005, the state lost 118,000 high-paying office and manufacturing jobs while adding 113,000 low-paying service jobs, Hughes said, adding, "So, not a good trade-off." The reserve bank forecast that the Garden State economy would grow by 2.1 percent through September. The bank's nine-month forecasts, issued each month, have generally been for less than 2 percent growth since last June.
The bank's index of current economic activity rose 0.2 percent from January to February. The economy has grown by 0.8 percent in the last three months and by 2.9 percent over the last year.
The FDIC found that New Jersey job growth in the fourth quarter of 2005 was about 1.1 percent, slightly below the prior quarter.
The state added 44,100 new jobs in 2005, but about 60 percent were in sectors in which salaries were below the state average, such as health care facilities, hotels and restaurants. In the high-paying sectors, job gains in areas such as financial and business services outpaced losses in areas such as manufacturing and information services.
The value of the average New Jersey home rose 15.6 percent in 2005, 12th highest in the nation but a slower pace than in prior years.
"Declining sales activity coincides with a growing inventory of homes on the market and increased time required to sell them," the FDIC report said. "A slowdown in home sales and higher inventory levels could portend an easing in appreciation rates in 2006." from the Courier News website www.c-n.com
posted by Jones Lang LaSalle NJ News Blog at 2:50 PM
Gotham Broad Buys $84M NYC Office Building April 04, 2006 By April Michelle Davis, Northeast Correspondent Gotham Broad L.L.C., an affiliate of Gotham Realty Holdings, has acquired 30 Broad St. (pictured), a 50-story, 431,502-square-foot office building in lower Manhattan. Carlton Advisory Services Inc. arranged an $84 million acquisition loan for the company.
The building at 30 Broad St., which is approximately 90 percent occupied with long-term leases of credit quality tenants, sits at the crossroads of the Financial District, Silicon Alley, Insurance District, World Banking Community and Shipping Industry, some 200 feet from the New York Stock Exchange. Carlton Advisory Services’ Chairman, Howard Michaels, was unavailable for comment at deadline.
The vacancy rate of 30 Broad Street is slightly higher than the 8.8 percent average vacancy rate for Downtown Manhattan as of February, according to Colliers ABR.
Within 30 Broad St., the floors range in size from 5,355 square feet on the top floors to 14,000 square feet on the lower floors. The office building features a 24-hour concierge, a refurbished lobby and renovated elevators.
posted by Jones Lang LaSalle NJ News Blog at 2:50 PM
Cost of Manhattan office rent continues rise by Julie Satow April 04, 2006
Manhattan’s average asking rent for commercial office space in March hit $43.20 a square foot, the highest level in over three years.
Manhattan’s average asking rent for commercial office space in March hit $43.20 a square foot, the highest level in over three years, according to a first quarter market report released today by brokerage firm Cushman & Wakefield Inc.
The number of tenants who have signed leases with rents of more than $100 a square foot is also growing, according to the report. There were 15 deals in the first quarter that reached this benchmark, compared with only 10 such deals for all of 2005.
The rise in rents is attributable to the scarcity of Class A office space in Midtown and the addition of newer buildings that have high asking rents. At the renovated Verizon building at 1095 Sixth Ave., for example, the asking rents are $85 a square foot.
The completion of 7 World Trade Center has pushed up rents and vacancy rates downtown, according to the report. Average asking rents downtown rose to $35 a square foot, a $4 hike from the fourth quarter of 2005, while the vacancy rate rose to 11.6% in the first quarter from 10.6% in the previous three-month period.
Other trends noted in the report include a number of clothiers who are opening their own boutiques, including Juicy Couture and Anne Klein, and the emergence of Fifth Ave. between 42nd and 49th streets as a desirable area for retail leasing.
posted by Jones Lang LaSalle NJ News Blog at 2:49 PM
Meadowlands Commission to hold public hearing on increases to height, number of residences By Michael D. Mullins
LIVE BY THE TRAIN – The changes would allow the developer to include another 20 units of market-rate housing and another 225 to 235 affordable housing units on site. The New Jersey Meadowlands Commission will hold a public hearing April 11 on five proposed changes to the Secaucus Transit Village Redevelopment Plan, including increasing the existing number of allowable market-rate residential units from 1,935 to 1,955, and a four-story height increase for some of the buildings. In addition, they are seeking to allow 225 to 235 affordable housing units at the site, which would be separate from the 1,955 unit limit. Thus, all totaled, the number of units in the 237-acre redevelopment area could increase to 2,190.
Why the change?
The redevelopment plan for the entire 237-acre Transit Village site was passed by the NJMC in 2004. It contains three zones. The largest, the Riverfront Landing Zone along the waterfront, originally was to include 1,700 units of housing. A zone closer to the train station includes another 150 units, and a third zone does not contain housing. The total original number of units was 1,850.
A development company called Fraternity Meadows has been named the developer of the 1,700 units by the water. Last January, they made an agreement with the town of Secaucus to pay a $5 million developer's impact fee and they got to increase the number of units in that zone to 1,785. The 20 additional market-rate units are to be added to that zone. The newly added market-rate units would compensate for the fact that the town, in order to comply with recently adjusted state affordable housing guidelines, may require the developer to build 225 to 235 more affordable units in the Riverfront Landing Zone. Mayor Dennis Elwell and NJMC Public Information Officer Chris Gale both said that the increase keeps the project financially viable so that the developer can provide on-site affordable housing. Gale said, "These measures ensure that teachers, hospital workers, and others who require affordable housing can live in the community they serve, and in addition, be able to live in a transit-oriented area among market rate units, ensuring a community that represents the entirety of Secaucus." Another change that will be part of the hearing will be a proposal to designate 735 of the market-rate units in the Riverfront Landing Zone as senior citizen housing.
The back story
In April of 2004, the NJMC adopted a Secaucus Transit Village Redevelopment Plan for 237 acres of property near the Allied Junction/Secaucus Transfer train station. The Secaucus Transit Village is part of a statewide initiative aimed at reducing the amount of cars on the road by building communities that are centered on train stations. Fraternity Meadows already owned some of the land. The company, a subsidiary of the Atlantic Realty Development Corporation (ADRC), had purchased 60 acres of vacant property from Gallo Construction Materials six months earlier. ADRC has been developing properties through the country, including sites in North Brunswick and Rahway. The company is owned by a number of individuals, including David Halpern and Gene Heller, former president of Hartz Mountain Industries. The original plan overall called for a total of up to 1,850 units of both market-rate and affordable housing, and some retail stores.
Proposed changes
The NJMC is a state agency that controls zoning for 89.4 percent of Secaucus' land because the town is in the Meadowlands district. The public hearing will be held on April 11 at 10 a.m. at the NJMC headquarters in Kearny. There are five main changes being considered: · Increasing the maximum number of allowed market-rate units in the Riverfront Landing Zone to a maximum of 1,805. · Settling on 735 as the minimum number of "active adult" units. By definition, an "active adult unit" is housing designated for residents 55 or older. · Excluding those units from a yearly limitation on the number of occupancy certificates. The reason for this, according to Gale, is that the financial impact of active adult units is very positive for the municipality, so it would be beneficial for those to come onto the tax rolls first. · In order to incorporate these changes, Fraternity Meadows is asking to increase the allowable height for dwelling units from 8 to 12 stories, with the overall building height not to exceed 15 stories including parking. · Adding affordable housing on-site rather than off-site, and not having to count that number in the 1,805 maximum in the riverfront landing zone. That number could include another 225 to 235 affordable housing units.
What next
Following the April 11 hearing and comments from residents, the NJMC will then consult the Meadowlands Mayors' Committee. If there are no objections by any mayor, the issue will return to the NJMC board for a vote. If the changes are approved, construction can commence. Residents' concerns
On previous occasions, concerns were raised about the impact of the Secaucus Transit Village on school overcrowding and on the Police Department. Following Tuesday's Town Hall meeting, the mayor addressed concerns that had been raised at prior meetings. Regarding the school system, the mayor cited the fact that in the contract, "[735] units are age-restricted, and they will have no children in them." The mayor also said that the majority of the others are high-end units that will not be like the three-bedrooms one would find in Harmon Cove, but rather, one and two-bedrooms geared toward singles and couples. The mayor added that many of the high-end units will enter the market at or around $1 million apiece. Similar rental units will be offered at a price range of $2,000 to $3,000 per month. Elwell said tax revenue created by these units will provide for any necessary increases in police. Elwell added, "[This] type of housing doesn't ruin a community; it adds to it." He went on to say, "The same people who are out there screaming about the Transit Village, are the same people who were out there screaming about Harmon Cove being built, and look at that today."
Where it stands
Currently, the project is in its site preparation phase. The hope is that by the end of this year, 400 units will have been completed. At that time, the contract calls for what is referred to as a "circuit breaker," in which the governing bodies will sit down with Fraternity Meadows and the NJMC to review the impact the development has had on the community thus far. The "circuit breaker" is not intended to change the plan, rather to monitor it, insuring that the contract is being upheld and that there are no negative effects on the Secaucus community. There is no specific timetable for the completion of the project, which in large part is determined by the market and how many units can be sold per year. The mayor estimates the project should be completely finished in five to 10 years.
The Jersey City community of Newport includes 600 acres of waterfront land, 3,922 residential units, and a major shopping mall, all between 18th Street and Sixth Street.
Over the last 20 years, it has also seen a variety of office buildings, a private elementary school, and a child care center. There are high-end restaurants, a yacht club and marina, and several small parks and playgrounds.
And it all started when New York developer Samuel LeFrak put a shovel in the ground near the Jersey City waterfront on June 4, 1986.
He had completed numerous residential projects in New York City since the 1950s. Now he has built an area of New Jersey teeming with young professionals and shoppers who enjoy views of the Manhattan skyline.
Starting Monday, Newport will kick off its 20th Anniversary celebration with the introduction of a new logo, website (www.Newport20.com) and in-mall Satellite Information Center. Over the next two months, there will be various events culminating on June 3 with the 20th Anniversary Celebration at Newport Town Square.
The company will also be looking to the future, as there is a northeastern quadrant of their property near the Hoboken-Jersey City border that is still undeveloped. Seeing it from the beginning
The city secured, during the administration of former mayor Gerald McCann, a $40 million federal grant to construct the sewers and roads before housing and retail space was built. Young Jamie LeFrak was only 12 when the groundbreaking took place. LeFrak is now 32 and an executive within the company who is organizing the 20th anniversary celebration. (The F is capitalized in the family's last name but not in the name of the company.)
LeFrak remembers what was there before Newport.
"I remember I was driven around the waterfront when it was just abandoned, and it was pretty dangerous," said LeFrak last week. "Kind of beat-up with junkyard dogs roaming around free. It really was a no-man's land."
Now, LeFrak said, "Newport has served as the catalyst for the rest of the waterfront development for Jersey City. And it has changed the public's perception from 1986 thinking it's a dangerous place to more recent time with people thinking of it as a premier destination."
Bill Wissemann, project engineer for Newport, goes back with the project to 1984, when he was working for an engineering firm retained by the Lefrak Organization.
"The first time I came, I saw a sea of mud, and most of the warehouse buildings in the area had been demolished," said Wissemann. "In fact, they were shooting an adult movie."
Cucci said he has come to appreciate Newport all these years later. He said it was an easy relationship between the city and the LeFraks, especially when he was mayor from 1985 to 1989.
"I remember that Sam LeFrak came into my office and started yelling at me because I wanted them to put references to Jersey City on their development, since they were emphasizing this Newport City concept," said Cucci. "I told him to take his shovel and go home. And wouldn't you know it, about 24 hours later, they put Jersey City on every sign."
Ricardo Kaulessar can be reached at rkaulessar@hudsonreporter.com
Novartis increases Chiron bid Offering $5.33B to win support of shareholders
BY MARNI LEFF KOTTLE BLOOMBERG NEWS
Novartis, Switzerland's biggest drugmaker, boosted its offer for the rest of Chiron Corp. by more than $200 million to about $5.33 billion, winning the support of at least two major shareholders who had been opposed.
Novartis raised its bid for the 56 percent of Chiron that it doesn't already own to $48 a share from $45, Emervyille, Calif.-based Chiron said Monday.
CAM North America and ValueAct Capital, two funds that had argued the previous offer was two low, said they will support the deal.
"With the biggest dissident shareholders in favor of the new deal, we expect the transaction to be consummated without further disruptions," Geoffrey Porges, an analyst at Sanford C. Bernstein & Co. in New York, said Monday in a note to clients.
The offer is the third that Novartis, which has itsNorth American headquarters in East Hanover, has made for the biotechnology company, which is recovering from a series of missteps that led Chiron to pull its Fluvirin influenza vaccine off the market in 2004. It is the second time Novartis has sweetened its bid since first offering $40 a share in September.
Chiron and Novartis amended their agreement in the latest negotiations so the deal needs to be approved by a majority of shareholders for the acquisition to close.
Previously, Chiron had to win the backing of a majority of its shareholders excluding Novartis.
"We worked with major shareholders to address the issues to conclude this transaction," said John Gilardi, a spokesman for Novartis. "Our priority was to complete this transaction as fast as possible so that we can address the manufacturing issues at Chiron and increase the vaccine supply."
Last week, Chiron said two independent proxy advisory companies disagreed on whether shareholders should vote in favor of the acquisition.
ValueAct, a hedge fund that owns 9.8 million shares, or about 5 percent of Chiron, said it intends to vote in favor of the deal.
"We are pleased that our opposition to the original merger agreement has resulted in increased consideration for all shareholders," ValueAct partner G. Mason Morfit said.
posted by Jones Lang LaSalle NJ News Blog at 2:25 PM
Signs That Biotech Has a Healthier Future By Andrew Pollack THE biotechnology industry is finally getting closer to an elusive goal: breaking even.
Despite its reputation for developing lifesaving drugs and providing high-paying jobs, the industry has lost tens of billions of dollars since Genentech, the first genetic engineering company, was founded 30 years ago this Friday.
Although the biotechnology giants Genentech and Amgen are now profitable, as are about four dozen smaller players, the overall industry has been kept afloat only by the willingness of investors to finance research and development.
"Investors have been very patient with the biotech industry, which has been one of the biggest money-losing industries in the history of mankind," Arthur D. Levinson, the chief executive of Genentech, told analysts last month. "The cumulative loss by this industry from its inception in 1976 is nearing $100 billion."
But perhaps the tide is turning. Publicly traded American biotechnology companies lost only $2.1 billion in 2005, down from $4.9 billion in 2004, according to the latest annual scorecard compiled by Ernst & Young, the accounting and consulting firm.
More important, the firm said, the loss last year was equivalent to only 4 percent of the $47.8 billion in combined revenue from the 329 public companies in the biotech industry. That is the first time that figure has ever been below 5 percent.
"We still feel pretty bullish that profitability for the entire industry, at least in the United States, will occur by the end of this decade," said Donn Szaro, leader of the global biotechnology practice for Ernst & Young. The prediction is for profitability on a yearly basis, not an erasure of three decades of cumulative losses.
For investors, of course, what matters most is what happens to the share price, not profits. Even shares of unprofitable companies can rise substantially — at least for a while — based on prospects for new drugs.
The stock of New River Pharmaceuticals, for instance, has more than quadrupled since its initial offering in 2004, propelled by hopes that the company's experimental drug for attention deficit hyperactivity disorder will be safer than alternatives. The stock closed yesterday at $33.51, up 30 cents.
Moreover, investors generally seek out particular stocks, not the industry as a whole, and big hits can pay off well. Amgen and Genentech, the two largest biotech companies, have market values of more than $85 billion, exceeding those of many of the traditional pharmaceutical companies.
At the end of 2005, the market capitalization of those two companies alone accounted for nearly half the total $410 billion for all publicly traded American biotech companies. And much of the improvement in the industry's bottom line in 2005 came from an increase of $1.8 billion in the combined net profit of Amgen and Genentech.
But even as those companies succeeded, the industry's overall income has been dragged down by companies that failed, and by newer companies that are still too young to have reached profitability.
The American industry is generally far ahead of its competitors elsewhere in sales and product development and market value. Oddly, however, the biotechnology industry in the Asia-Pacific region eked out a small profit of $7 million, according to the Ernst & Young calculations, because big profits from an Australian company, CSL, more than offset small losses from many other companies.
The accounting firm's calculation of income favors the industry because it leaves out private companies, which tend to be in earlier stages of development, and therefore more likely to be in the red. The 1,086 private American biotech companies lost $2 billion last year, about the same as the public companies, but on revenue of only $2.9 billion.
On the other hand, the Ernst & Young data may also be shortchanging the industry because some successful biotech companies end up being acquired by larger pharmaceutical companies and are no longer counted.
So far, despite losses, investors continue to put money into the sector. The public and private American companies combined raised $14.7 billion last year, down slightly from 2004 but still the third-largest sum ever.
But investors have become increasingly wary of initial public stock offerings, particularly when companies do not have products close to reaching the market. Only 13 biotech companies went public last year, less than half the 2004 figure, and most of them were at lower prices than the companies had expected, according to the report.
If the industry has not fared well in terms of profit and loss, how about drug development? In 2005, for the third consecutive year, new biotechnology drugs received more approvals from the Food and Drug Administration than drugs from big pharmaceutical companies.
The F.D.A. approved 18 novel biotech drugs, compared with only 11 from big conventional drug makers. Still, biotechnology companies have by no means figured out how to avoid the pitfalls in drug development. And for companies without profits, any setback in development can mean a steep fall in the stock.
That happened three times just yesterday. Inhibitex lost two-thirds of its market value after reports that the company's leading drug candidate, Veronate, did not prevent infections in premature babies in a late-stage clinical trial.
Cortex Pharmaceuticals lost half its value when the F.D.A. halted clinical trials of a drug, citing problems seen in animal testing.
And shares of Incyte plummeted 40 percent when the company said it would discontinue development of a drug for treating H.I.V. because of side effects.
posted by Jones Lang LaSalle NJ News Blog at 2:24 PM
Developer considers new use for vacant Minute Maid plant
Tuesday, April 04, 2006 By CHRIS STURGISSpecial to The Times
HIGHTSTOWN -- The closing of the Minute Maid plant here in 2003 was considered a "bolt out of the blue" by residents and workers for whom the packaging operation was a mainstay of borough life for nearly 40 years.
But while the machines remain silent, optimism is building as a developer moves to buy the 37-acre Mercer Street site for conversion to housing and commercial use, in yet-unclarified plans. "Developed into a mixed-use it's going to have a positive effect on our businesses," said Mayor Robert Patten. "I don't have the calculations but it's going to bring more people into our town and extend our Main Street all the way up Mercer Street. It's definitely going to stimulate our economy."
The vacant factory straddles the border of Hightstown and East Windsor, offering the hope of tax revenues and economic stimulation for both towns.
"They haven't made a proposal to the planning board -- yet -- but I understand they are interested in a mixed-use proposal of residential, office and commercial property," Patten said. Minute Maid's parent company, Coca-Cola of North America, continues to own the property and pay about $400,000 in annual property taxes, Patten said, but the plant's closing in 2003 cost the borough about $235,000 in water and sewer revenue.
Patten said the plant used the borough's water supply to make Hi-C and other beverages but did not run all its wastewater through the sewage treatment plant. "There was quite a bit of waste when they manufactured the juices -- water waste, a residue that they needed to get rid of. They put it in tanker trucks that took it someplace else," he said.
Asked if the mixed-use residential development would replace that lost revenue when the new development seemed unlikely to consume as much water as an industrial use, Patten said, "I couldn't answer that. I'm not an engineer so I wouldn't know what the calculations would be." He said water usage would depend on the specifics of the proposal.
East Windsor Mayor Janice Mironov said Dornoch Management of Lakewood is poised to buy the plant on Mercer Street on about 17 acres in Hightstown and another 20 acres of undeveloped acreage in East Windsor, some of which is wetlands.
"It is my understanding that . . . (the) closing could occur within 30 days," Mironov said. "The prospective purchaser appears to be experienced and has a desire to work closely with the two municipalities in identifying the plan for the site. That's definitely a positive step, and we look forward to further engaging the developer."
In a separate development, Dornoch has received approval for a 240,000 square-foot business complex consisting of five structures at Wicoff Mill Road and Cranbury Station Road, Mironov said.
"We have an experience with them," she said.
Mironov said she had no firm information about what Dornoch is planning for the site, which only has road access through Hightstown.
Chris Stoeckman, vice president of operations for Dornoch, did not respond to requests for comment from a reporter left at Dornoch's Hightstown telephone number or another number provided by the Hightstown office.
Ray Crockett, spokesman for Coca-Cola North America, said he knew nothing of the sale. Mironov said East Windsor lost no tax ratables when the plant closed and 280 jobs were lost in 2003 because the township portion had never been developed. Therefore, any gain in tax ratables would be a net gain for East Windsor, not a replacement for something lost, she said. Patten said the fate of another long-closed industrial site -- the former rug mill on Bank Street -- also is up in the air.
One developer has offered a proposal, but the borough council last night decided to hear a plan from a second developer, Dranoff of Philadelphia.
The initial developer, Greystone Mill of Paoli, Pa., has proposed turning the site into 98 residential units.
Dranoff has proposed 143 units.
Patten said the borough's redevelopment plan called for no more than 80 units on the site, but a subsequent feasibility study found that number too low to provide an adequate profit for a developer.
Trammell Crow Returns to Cleveland Market with Boutique Firm Buy April 03, 2006 By Gail Kalinoski, Contributing Editor
With business steadily increasing in the Ohio market over the past five years, Trammell Crow Co. felt the time was right to officially return to the state when last week it acquired Brandon Wiant Converse Ltd., a 14-year-old Cleveland boutique real estate services firm. Terms were not disclosed.
"We just had so many clients in Ohio. That was the real catalyst that put this (deal) together," Tony Long (pictured), Trammell Crow's Central U.S. regional director, told CPN this morning. "We've seen some activity in Cincinnati and Toledo--all around the state."
Long said office, industrial and retail have all been growing across the Ohio market, particularly retail, with banks opening new branches and cellular service providers like Sprint and Nextel looking for more space.
He said Trammell Crow, which hasn't had an office in the state in at last 10 years, has worked with Brandon Wiant Converse during that time on many deals in the Cleveland area.
"It was a really good fit," Long said of why Trammell Crow, which doesn't usually grow by acquisition, bought the firm. "The center of our entire company is customer service and they have the same ethic. Taking care of the customer was their most important priority."
Some of Brandon Wiant Converse's major clients included Alcan Aluminum Corp. Linde Gas, CIT Group, Education Loan Servicing and First American. The firm completed approximately 1.6 million square feet of office transactions worth more than $175 million in 2004. Founded in 1992 by Robert Brandon and Allen Wiant, the firm grew in 1998 with the addition of Chandler Converse, who helped establish it as a market leader in tenant representation and corporate advisory services. The firm had 10 employees, including eight brokers. They will report to Long, who said he expects that Trammell Crow will likely expand the staff as needed.
Including Cleveland, Trammell Crow now has eight Midwest offices: Chicago; Schaumburg, Ill.; Indianapolis; Detroit; Kansas City, Kan.; St. Louis and Minneapolis.
posted by Jones Lang LaSalle NJ News Blog at 2:22 PM
James may depart, but his big projects will cast a shadow
Monday, April 03, 2006 BY JEFFERY C. MAYS
Star-Ledger Staff Newark Mayor Sharpe James is not your ordinary lame duck, and that's why his business administrator's desk is a little more cluttered than usual. With just three months left in James' 20-year reign, Richard Monteilh has to keep a long list of the mayor's pet projects rolling. "There's more of an urgency to move faster to get things done," Monteilh said. Since announcing last Monday that he would not seek a sixth term, James has been in and out of his office at City Hall. Just a few doors down is Monteilh, who has done two stints as city business administrator under James.
"He's going to be mayor until noon on July 1 and will not relinquish his obligation to the city," said Monteilh, who continues to work on projects that will shape the city long after James is gone. They include: Choosing a developer for a hotel next to Devils arena. Demolishing Douglass-Harrison Homes to create a park. Making sure the state funds several major road projects, including the widening of Route 21 from Green Street to the viaduct and the widening of Lafayette and Mulberry streets.
Providing funding for the New Jersey Performing Arts Center's residential tower. Demolition of the Pabst Brewery on South Orange Avenue to make way for housing and retail. Securing funding for completion of Joseph G. Minish Passaic Riverfront Park and Historic District. Providing funding to launch an expansion of the Newark Museum and Newark Public Library. Completion of the extension of the platform at Newark Penn Station and a pedestrian bridge leading to the Ironbound or the Newark arena and pocket parks leading to the arena. Launching the Mulberry Street project which will see 2,000 market-rate condominiums built downtown. Establishing a mechanism to spend $30 million to provide redevelopment projects in the city's neighborhoods. Taken together, the fate of the list could forever change Newark, the state's largest city. Monteilh said most of the projects James wants to address are already in the pipeline.
The job over the next three months is to make sure they continue smoothly and transition successfully to the next administration. "I don't think anyone is going to double cross Sharpe James," said Dennis Gale, a political science professor at Rutgers University. "He still carries power (as state senator). He still carries a certain amount of respect. The loss of power will happen slowly." One of the projects already under way is the widening of Mulberry and Lafayette streets, which will benefit the arena and a project to build 2,000 condominiums near Mulberry Street and the federal courthouse. The bulkhead for the waterfront park is in construction phase and the park itself is in the design stage. The ink on contracts for the arena are dry and the steel frame is starting to emerge.
Devils principal owner Jeff Vanderbeek said he was glad he had a chance to work with James, who used $210 million in taxpayer money from the Port Authority to finance the arena after a couple of earlier versions fell apart. But Vanderbeek made it clear he will also work with whoever winds up in the corner office suite on the second floor of City Hall. "This is a large project. It is the cornerstone of downtown. Whoever is mayor I will welcome them with open arms, bring them up to speed," he said. It was a tone struck by many of the people behind the projects on James' to-do list. "All the work and politics (James) did has laid it out for (mayoral candidates) Cory (Booker) or (Ronald) Rice," said Emilio Farina, one of the principal developers of the Mulberry Street condo project. "We want to work together."
Newark is also looking to provide money for the New Jersey Performing Arts Center's plan for a residential high-rise. The money would come from an $80 million pool Newark is using to fund redevelopment projects. The state is reviewing Newark's use of the money and the city already has started the process of assigning $33.5 million to the library, museum and other projects. City officials met with the state earlier this week in Trenton and a ruling is expected soon. Larry Goldman, CEO and President of NJPAC said the commitment of public money is necessary to get commitments from the private sector.
"We hope the underlying rationale, which is residential development in downtown Newark, people on the street, high quality shops, cafes and galleries ... would be embraced by whoever is in office," Goldman said. "Who wouldn't want the downtown to be alive and vital not just on performance nights, but every night." Booker said that while he will have to honor legally binding contracts entered into by the city to spare the city expensive legal wrangling, one of the first things he wants to do if elected is review all the contracts to make sure the city received the best deal possible. The city's history of starting or announcing projects such as the now-demolished Renaissance Mall, and not finishing them, is too much to ignore, he said.
