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.
Land Prices Increasingly Drive Housing Markets, Fed Study Says By CAMPION WALSH June 21, 2006
WASHINGTON -- Housing prices in big U.S. cities have increasingly reflected underlying land value rather than building value since the mid-1980s, and that trend is likely to continue, according to a Federal Reserve study released Tuesday.
In the 46 biggest metro housing markets, land's share of property prices increased on average to 51% in 2004 from 32% in 1984, according to the study authored by Michael Palumbo, chief economist in the Fed's flow of funds section, and Morris Davis, a former Fed economist now at the University of Wisconsin.
The increase was especially sharp during the 1998-2004 housing boom, when land's share of property values gained 11 percentage points, the study said.
"With residential land having appreciated so significantly over the past 20 years around the country, the future course of land prices is expected to play an even more important role in governing home prices -- in terms of average appreciation rates and volatility -- in the next two decades," according to the study.
The report concludes that land's increased share of property values "could mean faster home-price appreciation, on average, and possibly larger swings in home prices."
Even if land appreciation returns to the slower pace seen before the 1998-2004 boom, cumulative gains in land value mean that house prices might rise more quickly on average than they did before the boom, it said.
Regionally, relatively expensive housing markets have seen somewhat bigger increases in land's share of prices in the 1998-2004 period, but the current housing boom has been marked by rapid appreciation of residential land "just about everywhere," according to the report.
The Fed study also found that at some point since 1984 most large U.S. cities have gone through one pronounced price cycle in which residential land lost value for several years, usually after several years of rapid appreciation.
"In real terms, land prices have generally taken several years to go from peak to trough, and the subsequent recovery from these price declines has generally occurred at a more gradual pace," the study said.
Write to Campion Walsh at campion.walsh@dowjones.com
posted by Jones Lang LaSalle NJ News Blog at 9:37 AM
PLOTS & PLOYS Yachts and Models June 21, 2006; Page B4
The search goes on for new lures to sell slow-moving luxury condos.
In Florida, Miami-based Fortune International and Shefaor Development are throwing in a 60-foot yacht for condo buyers to lounge in while their unit is being built. To qualify, buyers must buy one of the units priced over $1 million. For an additional $300,000, they can have use of the yacht for 60 days a year every year they own the condo.
"We're not only selling real estate, we're selling a whole lifestyle," Shefaor co-principal Gilbert Benhamou says of the 232-unit ArTech development midway between Miami and Fort Lauderdale in Aventura.
To give buyers a feel of their new condo, the interior of the yachts will be outfitted like their landlocked new home, including a similar kitchen. Those paying for continued use of the boat will share it with five other condo buyers and receive fractional ownership. Developers hope the $1.8 million yachts will help them sell out a project they say is 80% sold.
Meanwhile, in New York, fashion models are moving from the catwalk to the condo sales office in a bid to stimulate sales. In the two months since founding ID Model Management, Paolo Zampolli says six models have earned their brokers' licenses and seven others have signed up for licensing courses. Models have sold two apartments in the Cipriani Club Residences at 55 Wall Street to two Italian financiers, says Mr. Zampolli, expressing confidence his models' looks and ambition will help him best Manhattan's more seasoned brokers.
Warning Sign?
Will the robust commercial construction market follow home building down the path of slower growth? So far, construction of hotels, malls and hospitals is picking up the slack for the dropoff in growth among single-family homes.
But there may be a blip on the horizon. A novel indicator of construction activity six to nine months in the future is showing softness for the first time in 20 months. The Architecture Billings Index, published by the American Institute of Architects, measures revenue at 300 architecture firms around the country; most do commercial rather than residential work. The index is meant to be a rough leading indicator of future construction spending. The idea is that hiring an architect is the first step to actual construction. The index was 49.6 in May, down from 54.2 in April. A score above 50 indicates revenue growth. A figure below 50 indicates contraction.
Possible causes for the slowdown include high material prices, rising interest rates and most importantly, an overall slowdown in the economy, says Kermit Baker, chief economist for the American Institute of Architects and author of the survey. Another possible explanation: Most of the revenue drops were among smaller firms in the survey, who tend to focus on residential projects. Some economists argue the Architecture Billings Index takes too small a look at the construction market to be a meaningful predictor.
Pricey Property
Office-building and apartment values jumped in the first quarter as strong leasing activity helped rents climb and vacancies fall. But investors are still paying a steep premium for properties in both sectors.
The average value of an office building in the U.S. was up 4.3% in the first quarter to $162.51 a square foot from the fourth quarter, according to the survey of the top 50 U.S. office markets by Reis Inc., a New York-based commercial real-estate research firm. Buildings that sold in the first quarter went for an average $210.94 a square foot, a 29.8% premium over the average value.
Some of the discrepancy between underlying values of properties and the prices being paid for them is because higher-quality buildings are trading more often, but much of the disparity is due to the flood of money looking for returns in the commercial real-estate market, says Reis Chief Executive Lloyd Lynford.
Apartments' average value posted a 3.2% gain to $84,940 per unit. Those sold in the first quarter went for $104,677 per unit, a 23.2% premium over the value. The reasons for the disparity are similar to those in the office sector.
---- Kemba J. Dunham, Christine Haughney, Alex Frangos and Ryan Chittum
posted by Jones Lang LaSalle NJ News Blog at 9:36 AM
PLOTS & PLOYS Yachts and Models June 21, 2006; Page B4
The search goes on for new lures to sell slow-moving luxury condos.
In Florida, Miami-based Fortune International and Shefaor Development are throwing in a 60-foot yacht for condo buyers to lounge in while their unit is being built. To qualify, buyers must buy one of the units priced over $1 million. For an additional $300,000, they can have use of the yacht for 60 days a year every year they own the condo.
"We're not only selling real estate, we're selling a whole lifestyle," Shefaor co-principal Gilbert Benhamou says of the 232-unit ArTech development midway between Miami and Fort Lauderdale in Aventura.
To give buyers a feel of their new condo, the interior of the yachts will be outfitted like their landlocked new home, including a similar kitchen. Those paying for continued use of the boat will share it with five other condo buyers and receive fractional ownership. Developers hope the $1.8 million yachts will help them sell out a project they say is 80% sold.
Meanwhile, in New York, fashion models are moving from the catwalk to the condo sales office in a bid to stimulate sales. In the two months since founding ID Model Management, Paolo Zampolli says six models have earned their brokers' licenses and seven others have signed up for licensing courses. Models have sold two apartments in the Cipriani Club Residences at 55 Wall Street to two Italian financiers, says Mr. Zampolli, expressing confidence his models' looks and ambition will help him best Manhattan's more seasoned brokers.
Warning Sign?
Will the robust commercial construction market follow home building down the path of slower growth? So far, construction of hotels, malls and hospitals is picking up the slack for the dropoff in growth among single-family homes.
But there may be a blip on the horizon. A novel indicator of construction activity six to nine months in the future is showing softness for the first time in 20 months. The Architecture Billings Index, published by the American Institute of Architects, measures revenue at 300 architecture firms around the country; most do commercial rather than residential work. The index is meant to be a rough leading indicator of future construction spending. The idea is that hiring an architect is the first step to actual construction. The index was 49.6 in May, down from 54.2 in April. A score above 50 indicates revenue growth. A figure below 50 indicates contraction.
Possible causes for the slowdown include high material prices, rising interest rates and most importantly, an overall slowdown in the economy, says Kermit Baker, chief economist for the American Institute of Architects and author of the survey. Another possible explanation: Most of the revenue drops were among smaller firms in the survey, who tend to focus on residential projects. Some economists argue the Architecture Billings Index takes too small a look at the construction market to be a meaningful predictor.
Pricey Property
Office-building and apartment values jumped in the first quarter as strong leasing activity helped rents climb and vacancies fall. But investors are still paying a steep premium for properties in both sectors.
The average value of an office building in the U.S. was up 4.3% in the first quarter to $162.51 a square foot from the fourth quarter, according to the survey of the top 50 U.S. office markets by Reis Inc., a New York-based commercial real-estate research firm. Buildings that sold in the first quarter went for an average $210.94 a square foot, a 29.8% premium over the average value.
Some of the discrepancy between underlying values of properties and the prices being paid for them is because higher-quality buildings are trading more often, but much of the disparity is due to the flood of money looking for returns in the commercial real-estate market, says Reis Chief Executive Lloyd Lynford.
Apartments' average value posted a 3.2% gain to $84,940 per unit. Those sold in the first quarter went for $104,677 per unit, a 23.2% premium over the value. The reasons for the disparity are similar to those in the office sector.
---- Kemba J. Dunham, Christine Haughney, Alex Frangos and Ryan Chittum
posted by Jones Lang LaSalle NJ News Blog at 9:36 AM
Morris population growth slowing Census data show 3% rise since '00, but Florham Pk. up 23% BY COLLEEN O'DEA DAILY RECORD
At the midpoint between decennial censuses, new data released today show the Morris County region as a whole growing at a much smaller rate than it did in the previous decade.
The 2005 population estimates from the U.S. Census Bureau show that population in the typical town in Morris rose by about 3 percent since Census 2000, or less than a half percent a year. Between 1990 and 2000, population rose by more than twice that on average, or 1.1 percent a year.
But that doesn't mean some places aren't growing.
Already, the bureau estimates, the population in four Morris communities has jumped more than 10 percent in five years. Florham Park has registered the largest increase, of nearly a quarter. Mount Arlington, Pequannock and Rockaway Township all have had double digits population increases.
Between 2004 and 2005, Mount Arlington, Pequannock and Denville saw their populations rise the most, the bureau believes.
"The fastest growers are towns with large condo/(apartment)-style housing -- senior or assisted living," said Christine Marion of the Morris County Planning Department.
That's certainly been the case in Pequannock, which now has the county's largest continuing-care retirement community --Cedar Crest Village, with 1,500 units, Marion said.
But there are also several municipalities that census officials believe have lost population, either between 2004 and 2005 or in the previous five years.
Chatham, Lincoln Park, Mine Hill, Rockaway, Victory Gardens and Wharton all have smaller population counts in 2005 than they did in 2000, according to the estimates. And Butler, Madison, Mendham Township, Rockaway, Victory Gardens, Wharton, Hopatcong and Stanhope had fewer residents in 2005 than a year earlier.
In nearly all of those cases, the population losers are the smaller, older communities without land for growth and where residents tend to be older and have fewer children or have children who have moved away.
"It's perhaps due to declining household size," Marion said.
These newest data still don't show a clear trend that can be attributable to the Highlands Water Protection and Planning Act limiting growth in much of Morris County and the rest of the Highlands region. That act was signed in August 2004.
Of Morris region towns in the Highlands, 16 grew faster between 2004 and 2005 than they had from 2000 to 2004, while 20 municipalities grew at a slower pace. Because of the complexities of the act and the fact that growth is limited in portions of only some municipalities, it's hard to draw any conclusions from those numbers.
Dante DiPirro, executive director of the New Jersey Highlands Council that is drafting a master plan to govern development in the region, said staff is still analyzing population data and hasn't come to any conclusions yet.
But Jeff Tittel, head of the New Jersey chapter of the Sierra Club, said the fact that there is still population growth shows the need for the plan.
"Between the exemptions and the planning area and the grandfathering of projects, there's still a lot of growth happening."
posted by Jones Lang LaSalle NJ News Blog at 9:35 AM
CAST Expands West and East Thomas Gaudio NJBIZ Staff 6/21/2006
Woodcliff Lake-based CAST today announced the opening of an office in San Jose, Calif., and that the company has hooked up with a distribution partner in Japan. The company, The company, which develops and sells software that allows different functions on a circuit to communicate with each other, is working with PROTOtyping Japan Corp. in Kobe and Tokyo. The San Jose office will be led by Steve Lilly, the company's West Coast regional sales manager. Lilly has 30 years of experience in the semiconductor, manufacturing and electronic design industries.
posted by Jones Lang LaSalle NJ News Blog at 9:35 AM
June 21, 2006 -- As the New York Times continues to struggle amid weak advertising demand, business is looking up in a surprising corner: real estate.
The Gray Lady's much-maligned splurge on a new Midtown headquarters is proving a winning bet, the Times' two top execs boasted yesterday at a conference sponsored by the Newspaper Association of America.
"I'm happy to report - I know this may come as a shock to most of you - the headquarters is actually turning out to be an attractive financial investment," said Len Forman, chief finanical officer of the Times.
The building, located on Eighth Avenue between 40th and 41st streets, is slated to open on time and under budget, he said.
Also, with the real estate market heating up, the company now has an investment worth considerably more than the $600 million it plunked down for the first 28 floors of the 52-storey tower.
"We'll be looking at ways to realize the gains once the building is completed," Forman said. Executives added that a series of layoffs over the past 18 months has freed up at least four floors that the company plans to rent out.
That would amount to more than 125,000 square feet for lease in a "very, very hot Midtown real-estate market," Forman said.
Times Chief Executive Janet Robinson said the property is so hot that About.com staffers will be staying in their less expensive downtown location, rather than moving into the new building. The Times, which will get its name on the building, will own and operate the bottom floors, while developer Bruce Ratner will own the top floors.
Workers at the Gray Lady are slated to move into the new building in the spring of 2007. The old location on 43rd Street - home to the flagship paper since 1913 - was sold to Tishman Speyer Properties in 2004.
In New York Stock Exchange trading yesterday, shares fell 19 cents to $23.41.
posted by Jones Lang LaSalle NJ News Blog at 9:35 AM
MXD Wins $60M Land/Construction Loan By Eric Peterson
JERSEY CITY-Mocco Enterprises has picked up a $60-million land/construction loan for the initial phase of its Liberty Harbor North mixed-use community currently under construction on this city’s lower waterfront. The financing covers initial construction of the project’s first phase, including 269 luxury condos comprised of townhouses, brownstones and an eight-story mid-rise, as well as an eight-story, 140-unit rental building.
As reported by GlobeSt.com, the first phase will also include a one-million-sf, 32-story office tower, the construction of which awaits the signing of an anchor tenant, another 400 residential units and 80,000 sf of retail. Estimated price tag for the full phase one has been put at $200 million.
"Liberty Harbor North has been more than 20 years in the making," says Peter Mocco of the New York City-based Mocco Enterprises, who assembled the 25-square-block site in 1984 and has spent most of the time since dealing with site remediation, legal issues and an extended permitting process. After Phase I, the larger plan calls for a 10- to 15-year build-out, carrying an estimated $2-billion price tag, that will add up to more than 6,000 residential units, plus what Mocco terms a "complementary" retail component and hotels. Master planned by architect Andres Duany, it will encompass a plan of what he terms "new urbanism," focused on dense mixed-use neighborhoods. The site is directly across a canal from Liberty State Park and the Liberty Science Center.
"Actually, we’re zoned for more," Mocco told GlobeSt.com last year, when detailed plans were unveiled. "The zoning permits more than 6,500 units, 1.2 million sf of commercial space and five million sf of office space. But sometimes your zoning permits you to build more than you can physically build. Sometimes the market doesn’t permit you to build the total envelope."
The loan was arranged by Mark Cohen, senior director in CBRE Melody’s New York office and Marty Klebanoff, managing director of NorthMarq Capital’s Parsippany, NJ office. The source of the funding was not disclosed. "Mark and Marty shared my vision and had the creativity and tenacity to accomplish my financing goal," adds Mocco.
Anchors Sign On for Heritage Square By Eric Peterson
SOUTH BRUNSWICK, NJ-The anchor tenant lineup is set for Heritage Square, a 210,000-sf power center being developed by the Valley Forge, PA-based Pineville Properties. According to Jon Kushner, a principal of the Plymouth Meeting, PA-based Fameco, which has the leasing exclusive for the property, Target has signed on to occupy 120,000 sf. The other majors are Best Buy (30,000 sf), Staples (20,388 sf) and PetSmart (15,000 sf).
According to Kushner, Fameco’s leasing team is also currently negotiating final terms with Subway, Hair Cuttery, Dunkin Donuts and Chase Bank. The latter deal is for a pad site.
The development process for Heritage Square began in early 2004. "We identified the site for sale and then represented Pineville Properties in purchasing the site," says Kushner, who has been working the project with Fameco colleague Perry Garbois. The shopping center is currently under construction on Route 1 here and is slated for delivery in March 2007.
posted by Jones Lang LaSalle NJ News Blog at 9:33 AM
(AP) — Pfizer Inc. said Tuesday it will phase out its manufacturing operations in Groton, Conn., by the end of 2008, eliminating about 300 jobs.
The 50-acre site is also home to the Manhattan-based drugmaker's growing research and development operations.
The Groton and New London campuses in Connecticut are Pfizer's largest research sites, employing nearly 6,000 people.
The move is part of Pfizer’s restructuring announced last year. The firm has a global work force of 106,000 and said it expects to save $4 billion by 2008 with all of the changes.
Pfizer said it will begin cutting its manufacturing operation next year and could use the site to expand research and development.
"R&D has grown significantly in Connecticut for more than a decade," said Toni Hoover, site director of Pfizer's Groton/New London laboratories. "The Groton R&D site is at capacity and the manufacturing change announced today provides space for potential expansion."
The Groton complex makes active ingredients for a number of pharmaceuticals and animal-health products and the company expects to transfer those jobs to other plants.
Pfizer officials said workers affected by the closure will be offered severance, job placement assistance and other benefits. They can also apply for other openings in Groton and New London and at other Pfizer locations.
Manhattan retail rents expected to jump 5.5% by Julie Satow June 20, 2006
Asking rents for retail space in Manhattan will jump to $109.25 a square foot this year, driven by the economy and tourism according to a new study.
The asking rents for retail space in Manhattan will jump by 5.5% to $109.25 a square foot this year, driven by a solid economy, booming tourism industry and a strong housing market, according to a new study.
"The local retail sector continues to show steady improvement as the economy generates job growth," says Mitchell LaBar, the regional manager of Marcus & Millichap, which released the figures in a national retail research report.
Employers are expected to add 14,000 jobs this year, which is expected to drive down the overall retail vacancy rate in Manhattan to 4.2%, according to the report.
While attention is traditionally paid to retail corridors on Fifth and Madison Avenues in midtown, new retail submarkets are emerging.
In the Penn Plaza/Garment District, vacancy has dropped to 0.4% from 1% in the past year and demand for retail space in the Meatpacking District has led to a vacancy rate in Chelsea of 1.5%. Harlem's vacancy rate of 6% is expected to drop to 5.5% by year end.
While vacancies are expected to decline, there is still 100,000 square feet of new retail space scheduled to hit the market this year.
This figure does not include large projects expected to come online in the outer boroughs, including the Bronx Terminal Market, and the Atlantic Yards project in downtown Brooklyn.
posted by Jones Lang LaSalle NJ News Blog at 9:32 AM
Hearing on condos plan for Bayonne Tuesday, June 20, 2006 By RONALD LEIR JOURNAL STAFF WRITER
Baker Residential, whichalready built two residential waterfront developments in Bayonne is now pitching a conversion of an uptown commercial site to a 107-unit condominium loft complex. The city Planning Board will consider Baker's application for approval of site plan and a variance for maximum lot coverage at a July 11 hearing at 6 p.m. in City Council chambers at City Hall, Avenue C and 27th Street.
The developer built the 144-unit Boatworks downtown and the 30-unit Bay Harbor apartments in midtown.
Plans filed with the city for Baker's latest project - "The Gateway at Bayonne" - show that the developer wants to tear down three attached commercial buildings at the Riggio/Keene Cashman site, Avenue E between East 50th and East 51st streets, and replace them with a five-story building with ground-floor garage parking for 145 cars and apartments on the four floors above.
The new building would have 91 two-bedroom apartments and 16 one-bedrooms, averaging 1,300 square feet each, priced from $245,000 to $390,000.
TRENTON (AP) -- New Jersey's drug and medical technology industry added a modest number of jobs last year, reversing a trend of cutting workers and consolidating operations, according to a survey released Monday by an industry group.
The 25 members of the HealthCare Institute of New Jersey, which commissioned the survey, employed 60,556 people last year, up 282 jobs from the 60,274 industry workers in the state in 2004, but down from 63,447 in 2003.
The companies' total payroll also increased last year, to $7 billion from $6.6 billion. The 10th survey of the Hillside-based trade group's members, conducted by the Deloitte consulting firm, found the average salary for industry workers in the state was $93,948, up 6.7 percent from 2004. When health and other benefits are added in, compensation averaged $115,701, up 5.2 percent from 2004.
"The overall economic impact of the state's pharmaceutical and medical technology industry topped $27 billion," the institute's president, Bob Franks, said in a statement. "Through our direct payroll, our R&D expenditures, our payments to vendors, and from what we have contributed in taxes and philanthropy, the industry is having a pronounced effect on New Jersey."
The survey showed R&D spending totaled $7.5 billion, a 17 percent increase over the $6.4 billion reported in 2004.
Members reported nearly 900 pharmaceutical products in development and 70 new drug applications submitted, creating what the survey called "a robust pipeline." Additionally, 3,690 studies and clinical trials were in progress, the survey showed.
Also, 131 new medical product applications were submitted to the Food and Drug Administration in 2005, and 55 improvements to existing medical devices were approved. The survey also showed the industry's corporate giving to charity topped $4.4 billion last year, with $152 million going directly to state-based causes.
BASF finds buyer for Mt. Olive complex Real-estate investment firm planning a redesign to lure corporate tenants BY TIM O'REILEY DAILY RECORD
MOUNT OLIVE -- BASF has sold its former North American headquarters, the largest office building in Morris County, to a real estate investment firm that will try to fill it with several corporate tenants.
The purchase by BPG Properties Ltd., an affiliate of Philadelphia-based conglomerate Berwind Corp., comes more than two years after German chemical giant BASF put it up for sale and later moved out as part of a cost-cutting drive. The price was not disclosed, although Robert Donnelly Jr., part of the team at the brokerage Cushman & Wakefield that handled the deal, said it was less than the $195 million initial asking price.
Township council president Robert Greenbaum said he did not know the exact price but thought it might be less than the assessed valuation of $74.5 million. The site has five connected buildings covering 950,000 square feet, although it has also been listed as 970,000 square feet, parking garages for nearly 2,500 cars and 97 acres of land. According to Donnelly, BASF will retain another 57 adjacent acres that now are vacant and the permits to build about 800,000 square feet more office space there.
BPG has retained an architect to begin mapping out renovations that the campus will require going from one to multiple tenants, including some changes to the lobby and restrooms, addition of a fitness center for employees and a way to separate the four principal office buildings, said Donnelly, an associate director of Cushman & Wakefield's capital markets group at its East Rutherford office. "Overall, the building is in very good condition,"he said, with the first phase completed in 1994 and an addition four years later.
BPG executives could not be reached for comment. The sale was closed Friday and made public Monday.
Perhaps the largest hurdle the project faces is luring major companies to sign leases at a site considered remotes from the major office corridors, notably along Routes 287 and 24 in Morris County. The early marketing of the building was aimed at companies that might want to buy the entire complex for their own use, as Verizon Communications did with AT&T's former headquarters in Basking Ridge, but later shifted to property investors such as BPG.
"One of the problems we have had attracting a business interested in the property is that it is probably 30 miles from the established markets," Greenbaum said.
To counter that, BPG and Cushman & Wakefield will sell the campus as a reverse commute, avoiding the eastbound congestion on Route 80 in the mornings and westbound at night.
Further, said Donnelly, the rental rates will run substantially less than midtown Manhattan, a point that will be pushed at major companies looking to lower their costs by moving large numbers of employees west of the Hudson, but he did not disclose any proposed price. Although Morris County's vacancy percentage rate runs in the low 20s, according the surveys conducted by several major brokerages, blocks of 100,000 square feet or more in top-of-the-scale buildings, known as Class A, has shrunken to a short list.
Completely full, the BASF complex could hold about 3,000 people.
'Very positive'
"Overall, this is a very, very positive event for Mount Olive," Greenbaum said. "Putting tenants back in the building is going to help everyone economically. I am very eager to meet with the new property owner to see what we could do that would benefit both them and the town."
Nearby businesses, such as the Wyndham Garden Hotel across the street, saw their sales suffer as BASF shrank, then departed.
For a decade, BASF has been the town's largest taxpayer, paying $3.5 million last year, according to Morris County Tax Board records. However, reflecting the deterioration of the area's office market in recent years, the assessment was appealed and has been reduced from $160 million in 2002 to $74.5 million now. If the sale price topped that, it would become the new assessed value.
BASF planned and began building the complex in the early 1990s to bring under one roof the people spread across several buildings in Parsippany.
But as the chemical market slowed about five years ago and BASF reined in its aggressive expansion, cost cutting became a major focus to restore profits.
The staff at Mount Olive shrank by more than half from the 2,600 people reported there in 2000, leaving more than half the complex in mothballs. The company decided in March 2004 to put it up for sale, moving about 700 managers to a much smaller office in Florham Park at midyear and then the technology staff to Rockaway.
BPG Properties Ltd. has bought the former North American headquarters of BASF in Mount Olive. At 970,000 square feet, the complex is the largest office building in Morris. Profile: BPG Properties
Background: Part of Philadelphia-based Berwind Corp., which started in coal mining in 1886. As the use of coal began to wane after World War II, the company began to diversify, leasing the operation of mines to others in 1962. Has since diversified into a wide range of industries, including chemical coatings that release medicines over time, Elmer's glue, promotional pens and automotive cleaning chemicals.
Portfolio: Starting in 1980, BPG has amassed ownership in office buildings, warehouses, 90 apartment complexes with 22,000 units, four upscale hotels and shopping centers mainly east of the Mississippi River but stretching as far as California. In New Jersey, investments have been located from Princeton on south, including 1.9 million square feet of offices and warehouses, the Shopping Centers at East Gate in Mt. Laurel and four apartment complexes with 769 units.Ownership: Company is in the hands of the fifth generation of the Berwind family. Since 1993, BPG has raised $1.5 billion from outsiders. BASF building was purchased using some of the funds in a fund with commitments of $550 million.
The property: The BASF complex, renamed Willsbrook at Mt. Olive, covers a total of 970,000 square feet, almost all of it in four connected buildings. The campus covers 97 acres, with parking for nearly 2,500 cars. BASF retains ownership of an adjacent 57 acres.
posted by Jones Lang LaSalle NJ News Blog at 9:50 AM
Rag Shops Names New CEO Martin C. Daks NJBIZ Staff 6/20/2006
Rag Shops has announced that Ronald Staffieri has resigned from his CEO position "to pursue personal interests." The Hawthorne-based retailer named Mark Syrstad as its new CEO. Syrstad has more than 30 years of experience in executive management positions with such U.S. specialty retailers as Carter's, Inc., the Gingiss Group, and McWhorter's. Rag Shops operates more than 60 craft stores in New Jersey, New York, Pennsylvania, Connecticut, and Florida, carrying merchandise used for crafting, sewing, quilting, scrapbooking, and home decoration. In September 2004, Rag Shops was acquired by the investment group Sun Capital Partners.
posted by Jones Lang LaSalle NJ News Blog at 9:50 AM
Plan to Move Garden Augurs Change for Midtown By CHARLES V. BAGLI
Steven Roth, the chairman of a company once known for operating suburban shopping centers, made a startling move nine years ago when he plunked down more than $2 billion for office towers, a hotel and retail space surrounding Madison Square Garden on a bet that the neighborhood was ripe for transformation.
Now, Mr. Roth is quietly circulating a $7 billion plan detailing just how radical a transformation he envisions for the district, including moving the Garden to a new home on Ninth Avenue. He wants state officials to rethink the plan they have hired him to develop, an expansion of Pennsylvania Station under Eighth Avenue into the landmark James A. Farley Post Office, which is to be renamed Moynihan Station for the senator who championed the project.
Not only would Mr. Roth build Moynihan Station, but he would remake the cramped and dreary Pennsylvania Station itself, turning it into a monumental gateway to New York under a sweeping glass canopy.
The Garden would move a block west to the rear of the Farley building, allowing Mr. Roth, the chairman of Vornado Realty Trust, and his partner, Stephen M. Ross, the chairman of Related Companies, to build a commercial complex on top of Penn Station akin to Rockefeller Center, with five towers and seven million square feet of office space, apartments and stores.
The city's history is littered with hugely ambitious and ultimately unrealized plans, but while this one faces obstacles, it has been gaining momentum in the past few months. The two men have a nonbinding agreement with the owners of the Garden to move the arena, something other developers sought in vain for more than two decades.
A battle royale like the one that doomed the Jets stadium on the Far West Side last year seems unlikely. The Regional Plan Association and Community Board 4, which opposed the stadium, both like the Roth-Ross plan. And six of the city's business organizations heartily endorsed it at a public hearing on May 30, even though it was not on the agenda and has yet to have a formal public debut.
Transportation advocates say the Roth-Ross plan provides a once-in-a-lifetime opportunity to reconfigure and expand the busiest rail station in the country, where 550,000 passengers struggle through a maze of underground passageways each day. Under the current Moynihan Station plan, 80 percent of passengers would still use the old, crowded quarters.
To win approval, the project would have to run a gantlet from City Hall to Albany to Amtrak, which operates Penn Station. The state preservation commission would have to approve the Garden's move to the rear of the Farley post office in order for the developers to get valuable tax credits. Finally, it is unclear who would pay for the estimated $1 billion cost of renovating Penn Station.
There are political obstacles. Mayor Michael R. Bloomberg is displeased with the owners of the Garden, who ran a multimillion-dollar ad campaign against him last year that helped kill his plan for the $2.2 billion football stadium on the Far West Side. And state officials are moving quickly with the simpler Moynihan Station plan, because Gov. George E. Pataki wants a groundbreaking before he leaves office.
If the larger project is approved, it would mean billions for Mr. Roth and Mr. Ross — the two Steves, as they have become known. It would enormously enhance Mr. Roth's holdings, which include the skyscraper at 1 Penn Plaza and the Pennsylvania Hotel. He would also solidify his hold on an area where his company already owns or controls seven million square feet and plans to double that figure.
"We are about making money here on a grand scale," said Mr. Roth, who has a reputation for refreshing boldness, at an investors' conference earlier this month.
But some say the Roth-Ross plan would serve the public, too. "It's actually a real convergence of public benefits and private interests, assuming the Garden fits without breaching the grand historic space," said Lynne B. Sagalyn, a professor of real estate development and planning at the University of Pennsylvania. "There's the potential for another high-density cluster of commercial activity connected to transportation, like Times Square and Grand Central."
Not everyone is a fan. The Farley post office was designed by McKim, Mead & White, the architects of the original Penn Station, which was torn down in 1963 to make way for the current Garden. Now some fear that history is repeating itself.
Peg Breen, the president of the New York Landmarks Conservancy, called the proposal to move the Garden into the Farley building akin to "Cinderella's stepsisters trying to jam their feet into the glass slipper."
Mr. Roth and Mr. Ross were selected last year to build Moynihan Station and a major block of space for retail, office or residential use. The developers, who would pay the state $313.8 million and a yet-to-be negotiated annual fee, would also transfer about 1 million square feet of unused development rights from the Farley building across Eighth Avenue to the northeast corner of 33rd Street for two residential towers.
Then, earlier this year, the two men struck a tentative deal with James L. Dolan, whose family controls Cablevision, the Garden, the Knicks and the Rangers. By moving the Garden, the developers would gain the enormously valuable right to build three new skyscrapers above Penn Station, with a mix of apartments, offices, a hotel and stores, while generating up to $75 million a year in property taxes for the city. The Garden, which has considered renovating, would get a modern, egg-shaped arena with many more luxury boxes.
There is no final design for the Roth-Ross proposal, but the developers' current models show two buildings bordering Eighth Avenue — Moynihan West, in the Farley building, and Moynihan East, a sunny, rebuilt Penn Station with a monumental, glass-walled entrance and grand staircase at 31st Street. A commuter would be able to look up the stairs, through the glass entrance and across Eighth Avenue to see the 20 Corinthian columns, each 53 feet high, across the two-block front of the Farley building.
A soaring multistory glass canopy would stretch diagonally to 33rd Street, near Seventh Avenue, bringing sunlight to a hall leading to transit and subway platforms. The new towers would be built atop a retail building at street level.
The relocated Madison Square Garden, on Ninth Avenue, would take up as much as two-thirds of the Farley building, eliminating an intermodal hall in the current plan. The glass-topped great hall, which is slightly larger than the comparable space at Grand Central Terminal, would still be renovated as a public space. The Garden would rise 50 feet, or nearly five stories, above the roof. The post office would move its remaining operations, and the historic stamp windows would be used to sell tickets to Garden events.
The owners of the Garden want a major presence on Eighth Avenue — perhaps banners hanging among the columns, similar to those at the Metropolitan Museum, or an expensive set of electronic signs.
That is an image sure to stir up the critics and even alienate supporters. Opponents placed an ad in The New York Times last week with the headline: "Don't let it happen again," a reference to the demolition of the original Penn Station.
The issue has gotten so heated in landmark and preservation circles that critics have chastised the senator's daughter, Maura Moynihan, who has championed her father's vision for the Farley, for narrating a media presentation of the new proposal. The developers have quietly shown the presentation to Mayor Bloomberg and various business, civic and news media figures.
"We've got to be open-minded, because chances like this don't come along very often," Ms. Moynihan said in an interview. "The only thing I've ever cared about is a bigger, better train station that liberates New Yorkers from the horror of the pit, Penn Station."
The developers contend that their plan would accelerate what has been a slow transformation of a dowdy area south of the garment district. "The larger Moynihan plan would serve as the catalyst for the transformation of Manhattan's West Side, ease overcrowding at Penn Station and create a much more functional and architecturally distinct gateway to New York City," Mr. Roth said.
Critics do not see it that way. "Clearly, from the developer's point of view, this is about mega-development and mega-bucks," said Ms. Breen of the Landmarks Conservancy. "But we all started with the notion of a great train station for New York City. That's gotten lost in the shuffle."
But Robert D. Yaro, president of the Regional Plan Association, said that an intermodal hall at a reconfigured Penn Station would provide for far more efficient transfers among subways, Amtrak, New Jersey Transit and the Long Island Rail Road. With the Garden suddenly willing to move, Mr. Yaro said the city should not pass up the chance.
And city officials are clearly intrigued. Deputy Mayor Daniel L. Doctoroff said: "It's undeniably a good idea, in terms of generating tax revenues, creating a train station and its impact on the development of the West Side. The question is whether we can make it work financially."
In all likelihood, the government officials would ask the developers to pay for at least part of rebuilding Penn Station in return for approving what is potentially a very lucrative project. Despite his dislike for the Dolans, Mr. Bloomberg has indicated that he would not block the move, although he will not let the Garden keep a $10 million a year property tax exemption, Mr. Doctoroff said: "It doesn't automatically travel to a new site."
The biggest obstacle may be the governor, whose appointees are moving fast to approve the simpler Moynihan Station plan as early as next month, after 14 years of stops and starts. The money is in place, and the post office has agreed to move. The prime tenant, New Jersey Transit, has agreed to operate the public spaces.
State officials want Mr. Roth and Mr. Ross to wrap up the negotiations on the Moynihan Station plan, put up an initial $150 million and break ground in the fall. A separate deal with the Garden and the city would mean delays for public hearings and an environmental review.
"Moynihan Station is critical to improving and enlarging the gateway to New York," said Charles A. Gargano, chairman of the Moynihan Station Development Corporation. "While a new sports arena would be a vast improvement, the building of Moynihan Station is more important than whether Madison Square Garden moves, or new high-rise buildings are built."
posted by Jones Lang LaSalle NJ News Blog at 9:48 AM
June 20, 2006 -- IN a major breakthrough for Larry Silverstein, Moody's Investors Service and the developer have signed a term sheet that will likely lead to a 600,000-square-foot lease at 7 World Trade Center.
Insiders expressed optimism that the preliminary agreement - signed late last week - will result in a done deal soon.
A term sheet is a non-binding agreement on the major financial terms of a lease. Not every term sheet results in a lease, but most do.
Under the 20-year arrangement now being worked out, Moody's will occupy floors 13-27 of 7 WTC and move in by September 2007.
A Moody's lease would be a blockbuster breakthrough for Silverstein at recently opened 7 WTC, where a temporary scarcity of tenants has been blamed by Mayor Bloomberg on Silverstein's demand for $50-plus per square foot.
Although new Midtown buildings now fetch $75 and up, Bloomberg thinks Silverstein should charge $35 a foot - the rate at downtown addresses 25 years older.
So far, leases have been signed for a mere 60,000 feet at 1.6 million-square-foot 7 WTC.
A widely reported term sheet with Chinese real estate company Vantone for 200,000 feet has yet to result in a lease. Sources attribute the delay to the complexities of negotiating with a distant foreign company.
Moody's current headquarters is just two blocks away from 7 WTC at 99 Church St., which Moody's owns and where it fills all 340,000 feet.
"Their people and Larry's people know each other," an insider said.
There was no comment from Cushman & Wakefield, which represents Moody's, or from CB Richard Ellis, which reps Silverstein.
Jones Lang LaSalle's Peter Riguardi, who reps Vantone, said the Moody's term sheet is "great for the building and hopefully they can get it all done."
* In what's surely one of the year's most creative deals, law firm Simpson Thacher & Bartlett is more than doubling its space at Tishman Speyer's Chrysler Center.
In a complex set of transactions arranged by the firm's rep - a CB Richard Ellis team led by Kenneth D. Rapp - Simpson Thacher will have nearly 80,000 square feet in 666 Third Ave., known as Chrysler East, and in the landmark Chrysler Building at 405 Lexington Ave.
The firm already has 36,092 square feet on the fourth floor of 666 Third. This summer, it will break through a wall to expand into the fourth floor of the Chrysler Building, creating a contiguous floor space of 78,255 square feet.
Rapp's team also advised the tenant now in the Chrysler Building space to be taken over by Simpson Thacher - the U.N. Office for Project Services, which had a lease through 2014. "We called the U.N. group," Rapp said. "They had no broker, so we worked with them."
Simpson Thacher's lease at No. 666 was to be up in 2010, so the deal includes an extension until the end of 2018 - the same time its lease is to expire on 600,000 feet at nearby 425 Lexington Ave.
"We arranged it so the expirations would all happen at once," Rapp said.
Tishman Speyer declined to comment. Terms were not disclosed. Asking rents on the lower floors of the Chrysler Building are in the $60s.
steve.cuozzo@nypost.com
posted by Jones Lang LaSalle NJ News Blog at 9:47 AM
June 20, 2006 -- A dark-horse candidate from New Jersey has emerged as the prospective buyer of the Milstein brothers' famous empty pit at the southeast corner of Eighth Avenue and 42nd Street - Parsippany-based SJP Properties, multiple sources said.
Ever since The Post first reported two weeks ago that Howard and Edward Milstein had decided to sell the precious corner rather than develop it themselves, speculation has been rampant over who would snatch it up.
Although not a household name in city real estate circles, privately held SJP owns or manages 12 million square feet of office space in the metropolitan area - mostly in northern New Jersey and on the Jersey waterfront. Two years ago it also launched a residential division.
Last January, SJP announced plans for a 344,000-square-foot office project in Basking Ridge, N.J., in conjunction with J.P. Morgan Asset Management.
SJP President Steven J. Pozycki, the company's reps at Beckerman Public Relations, CB Richard Ellis Stephen B. Siegel - said to be the sale broker - and Milstein's rep, George Arzt, all declined to comment.
Sources said SJP, which has partnered with Prudential, has signed a "hard" contract to buy the 42nd Street site from the Milsteins, who in early 2001 paid a mere $77.7 million to buy out other Milstein family members for full control of the land, then valued at $111 million.
If all goes well, the deal could close in about three months. Sources speculate that SJP will build a project combining commercial and residential uses.
Terms were not available.
But given the market for similar Midtown properties, the 42nd Street lot - across the street from the New York Times' new headquarters tower - could top the 2001 price tag by three to five times.
"Whoever buys the site will be subject to the same agreement we're drawing up with the Milsteins" regarding the use of the site, said Empire State Development Corp. Chairman Charles Gargano, who has been trying to have the corner developed for years.
That includes "per diem penalties if they don't start work within 12 months," Gargano said. But he welcomed the prospective sale to a company that would actually follow through on a promise to build. "We're pleased it's finally, finally getting done," Gargano said.
steve.cuozzo@nypost.com
posted by Jones Lang LaSalle NJ News Blog at 9:46 AM
Matrix Exits Area with $22M Office Sale By Marita Thomas
HORSHAM, PA-The Cranbury, NJ-based Matrix Development Corp. has sold the 115,850-sf office building at 100 Tournament Dr. for $22 million, or nearly $190 per sf. The three-story property, located within Commonwealth Corporate Center on the Commonwealth Country Club golf course, is fully leased.
Jim Vesey, senior director, and James Sheehan of the Philadelphia office of Cushman & Wakefield represented Matrix in the sale. "The seller is disposing of its properties in this market," Vesey tells GlobeSt.com, "and this is its last office asset in the suburbs."
As Matrix exits, the buyer, Glendale, CA-based American Realty Advisors, enters this market, "and is looking to grow in the area," Vesey adds. It invests in real estate for pension funds, and Boston-based Barrington Capital Partners represented it.
The facility was completed in 1988, according to Vesey, "and it’s a beautiful building on a prime site. There were a lot of bidders." Asking rental rates in the Horsham/Willow Grove submarket range between $23.17 per sf and $20.53 per sf, according to a first-quarter 2006 report from the Philadelphia office of Grubb & Ellis.
The Commonwealth center contains eight buildings under different owners. Among them are Motorola and Marked Tree, AR-based CenterCore, a supplier of office furniture systems. Both are owner/users.
Wilmington Trust opens office near Route 1 Tuesday, June 20, 2006
One of the bigger players in the wealth management business has just put its shingle out on the Route 1 corridor.
Wilmington Trust has offices around the world and $40.4 billion under management, and after seven years of eyeing the Princeton market with great interest has opened an office at 100 Overlook Center.
"The demographics are ideal for what we see as our niche," said Jeff Culp, chief operating officer for Wilmington Trust of Pennsylvania. "There's a significant amount of family owned and family controlled business there."
Culp also said a large executive community and the presence of big pharma and the health-care indus try also made it attractive to establish a franchise in this territory.
Wilmington Trust has four employees working out of its new office, and its long-range staffing plan calls for as many as 15 additional workers, people with expertise not only in wealth management but in commercial banking and real es tate construction and lending.
For help in jump-starting the new office, Wilmington Trust hired a managing director with knowledge of the local market: Sean S. Murray, a former Wachovia managing director and senior vice president of wealth management. Mur ray left Wachovia this year after joining the bank in 1997.
Culp said the opportunity to build a franchise office in wealth management from the ground up attracted Murray after years em bedded in a large corporate infrastructure.
Previously he served with UJB, NatWest and Fleet Bank, now Bank of America. Exelon, PSEG still back deal Exelon and Public Service Enterprise Group said yesterday they are still working toward regulatory clearance of their planned merger and affirmed their continued en thusiasm for the deal to create the country's largest electric utility.
The announcement came on the heels of today's deadline for either company to walk away from the transaction without paying a $400 million penalty.
"There was a lot of interest in the June 20th (walkway) date," said Jennifer Medley, a spokeswoman for Exelon. "We thought it would be useful for investors and others to have an update on our thinking."
The companies reiterated yesterday that the $16 billion deal makes sense for investors and customers, though scrutiny by the U.S. Justice Department and New Jersey Board of Public Utilities has dragged on for months and economic conditions have pushed up the price tag for the deal.
The companies hope to close the deal during the third quarter.
Even after the walkaway date, the companies have said the deal hinges on securing acceptable concessions from the federal and state regulators, who may require the company to sell certain power plants.
Critics of the deal said the companies haven't sufficiently addressed concerns about whether the combined company, Exelon Electric & Gas would be so powerful it could set prices for electricity within the state and region, a prospect that would lead to higher rates for businesses and customers.
AFX News Limited Altana mulls selling pharma ops to financial investors - report 06.19.2006, 03:45 AM
FRANKFURT (AFX) - Altana AG is considering financial investors for the first time as potential buyers for its struggling pharmaceuticals division, after failing to find a strategic partner in the sector, the Financial Times Deutschland reported.
According to financial sources, Goldman Sachs has sent out information packs to several holding companies on behalf of Altana, the FTD said.
A spokesman declined to comment, but said to the newspaper that 'whoever Goldman Sachs spoke to on Altana's behalf, they (would be) partners thinking in the long term'.
Moreover, he said that an earlier statement ruling out the sale to financial investors, made by chief executive Nikolaus Schweickart, was still valid.
Nevertheless, the group stressed it is 'keeping all options open'.
Altana has been looking for a solution for its Pharma business since October, and also wants to spin off its Chemicals operations this year.
ragnhild.kjetland@afxnews.com
posted by Jones Lang LaSalle NJ News Blog at 9:45 AM
In the three years that have transpired since Sarbanes-Oxley became the law of the land, it has received its fair share of bad press, most of it revolving around the burdensome costs and, of course, the nail-biting reality of the CEO and CFO's names together on the bottom line. In fact, at one seminar presentation at this year's Mipim conference in Cannes, SOX was blamed directly--and it is generally agreed, falsely--for the recent ongoing push of REITs into privatization. But, less press worthy is the upside of the law, and yes there is some, both direct and indirect, such as a possible 30% increase in cost savings that await those who learn their reporting lessons. In a recent, exclusive interview Linda Tresslar, managing director and co-leader of national consulting for Grubb & Ellis, talks us through this out-of-the-box view of the three-year-old law.
GlobeSt.com: Have most people in the industry absorbed Sarbanes-Oxley into their daily routines?
Tresslar: Yes. The first two years of Sarbanes-Oxley was all about compliance and figuring out exactly what you were going to have to do, and there were hard dates you had to meet. Most people looked internally to make sure they had systems in place, and they started looking at vendor relationships to make sure their real estate-services vendor--or any kind of vendor--was providing information in a form and in enough detail and frequency that the company could comply. That took quite some time, especially within the real estate realm because many corporations don't track real estate in its entirety. Rather, they track it through business lines.
GlobeSt.com: That brings up two questions. The first is, do corporate real estate executives know what they own?
Tresslar: They certainly know about their active real estate. We're definitely seeing the realization that they need timely access to this information. It's not a luxury; it's a necessity. They're focused on price, but they are focused mainly on making sure the information they're getting from any vendor's systems is detailed enough and is delivered accurately and in a timely fashion.
GlobeSt.com: And that's question number two. To what extent were service firms blindsided by SOX in general and specifically, did you have to change your delivery system?
Tresslar: We certainly started by making sure we understood what our clients were being asked to provide and took a look at the systems we had in place. The nature of the information being provided hasn't changed. The thing that has changed the most for all of us in the industry has been the emphasis on the accuracy of the data and the speed of delivery. Clients are focused on their business operations, as they should be. So real estate is not a fast-moving asset for them. No one used to look at their five- or 10-year lease every quarter. Now they do. They're looking at an entire portfolio, whether they lease or own, and they're looking at it all quarterly.
GlobeSt.com: So does that mean that the law, despite all of the negative press, can actually help save money?
Tresslar: There should be an inherent savings if it helps you operate more efficiently. Those savings can range from 10% to 25%. It's not so much driven by the law, which is just asking any company to provide accurate, timely information to their investors. But Sarbanes-Oxley provides the impetus to look across your portfolio and at the value of those holdings. Just looking at a portfolio in that context helps the company rationalize why they're leased here, why they own this and the financial expectations from it.
GlobeSt.com: But certainly it's an indirect result of SOX.
Tresslar: It was certainly the impetus. But the Federal Accounting Standards Board also continues to make rulings and interpretations on many of these points. As a result of SOX and FASB clarifications on various industry points, such issues as leasing or environmental compliance are becoming more codified and more quantified. These demands are increasing the need for knowing your holdings on a timely basis across the portfolio.
GlobeSt.com: How different is the way you communicate that information now than it was four year ago?
Tresslar: As a company, we spend more time talking with them about real estate in the aggregate and the impact that one transaction may have on the overall portfolio. At one time a build-to-suit or lease requirement would have been fulfilled without much interaction. Now it involves a discussion of what's behind the requirement and the implications of leasing versus owning on the balance sheet. It's an opportunity to broaden the conversation.
GlobeSt.com: So SOX has provided the ability for service firms to forward their strategic planning services with their clients.
Tresslar: Yes. One thing Sarbanes-Oxley has done for everyone--clients and vendors--is that there are more people involved on both sides of the fence to make sure you are completely addressing what SOX intends you to do. It's not just getting the information. It's increasing the dialog.
GlobeSt.com: So is SOX worth the expense?
Tresslar: The overall cost burden is significant and it's hard to quantify what is just the cost to real estate. For small companies the costs have been a tremendous burden. For me, while the cost is a burden, it's a cost everyone has to bear. The challenge and the opportunity is that since you have to do this, find other value in it.
Gov. Aims for Business-Friendly State By Eric Peterson
EDISON, NJ-Streamlining the state’s bureaucracy, curtailing government spending and keeping up an ongoing dialogue with New Jersey’s business community are the key issues behind the economic blueprint being developed by the administration of new Gov. Jon Corzine. That was the message delivered by two top state officials at an economic development forum sponsored by the New Jersey Chapter of CoreNet Global last week.
Addressing concerns raised by participants involving tax incentives and tax increases, and their relationship to job growth and competition from neighboring states, "there is a great sense of urgency," said Carl Van Horn, chairman of the New Jersey EDA. "We will continue to consult widely. We need to eliminate problems we made for ourselves."
According to Angie McGuire, deputy chief of the Governor’s Office of Economic Growth, "the driving force is to create and support policies favorable to economic growth. The goal is to improve the trajectory for business growth."
The Governor’s Office of Economic Growth itself was the first initiative taken by the administration. Shortly after he was sworn in, in January, Gov. Corzine announced his intention to closely supervise the state’s economic development efforts with the creation of that office.
Participants and the two state officials alike agreed on some pressing issues and initiatives. Among them: Continued funding for the Business Expansion Incentive Program, which lowers companies’ state taxes based on the number of people they hire; improved interaction between state and local agencies as far as coordinating the permitting process; increased marketing of the state; taking a more pro-active stance on "business-poaching" by other states; more and better programs for smaller companies.
"I’m hearing things that I’ve not heard before," said Jim Leonard, vice president of government relations for the NJ Chamber of Commerce." Notably, the assurances that Corzine wants to retool state government so that it is in a position to respond adequately and in a timely fashion to the needs of the business community."
Meadows towns pay the price of growth State requires 2,500 units of affordable housing Sunday, June 18, 2006 BY STEVE CHAMBERS Star-Ledger Staff
In the past two years, towns in the Meadowlands have embraced redevelopment proposals to transform old industrial sites and landfills into thousands of housing units and millions of square feet of commercial space.
Now, the bill's coming due.
State housing rules enacted in 2004 require all residential and commercial projects to include a share of housing for poor and moderate-income families. The massive size of the projects -- 7,300 residential units, 27.5 million square feet of commercial, office and warehouse space and 2,750 hotel rooms -- could force towns to build 2,500 affordable units or more.
As the scale of development -- and the housing obligations they trigger -- became better understood, there have been sharp repercussions.
Earlier this month, the mayor of North Arlington lost his seat after a primary fight that hinged on the affordable housing issue. A year ago, the mayor of Lyndhurst lost his seat in a race that also focused on the scope of development and the accompanying affordable housing.
Last month, Carlstadt and East Rutherford were stripped of all zoning powers by a judge who said he was fed up with their stonewalling on affordable housing.
And environmentalists, who have maintained a cautious truce with housing advocates, have begun to complain that large-scale projects and the accompanying affordable housing could harm the fragile river ecosystem of a region built on marshes and tidal wetlands.
"It took us years to get the (state) to preserve wetlands and set aside natural resource areas for conservation," said Hackensack Riverkeeper Bill Sheehan. "Now, we've got judges telling towns they have to allow 20-story buildings on the banks of the river."
UNMET OBLIGATIONS
Towns across New Jersey have long been chastised by housing advocates and judges for willingly accepting ratables while using zoning laws to exclude the poor.
But in the Meadowlands of northern New Jersey, things have been complicated by the existence of a powerful regional entity. Created the 1968, the New Jersey Meadowlands Commission was designed to spur economic development and prevent the Hackensack River and surrounding marshes from becoming an industrial wasteland.
The commission has land-use jurisdiction over parts of 14 towns in Bergen and Hudson counties. As it has pressed for large-scale redevelopment in recent years, the state agency has been accused by housing advocates of helping its partner towns shirk their housing obligations.
In a 2004 master plan, the commission sharply curtailed development on wetlands. But it designated 10 redevelopment areas, ushering in developments like Encap, a multiphase project to build golf courses, 4,205 residential units and a convention center on top of former landfills.
Housing advocates assailed the plan for scarcely mentioning the poor. The nonprofit Fair Share Housing Center sued, followed by the New Jersey Builders Association, which argued that another large-scale Meadowlands project -- known as Xanadu -- also ignored housing obligations.
Under legal pressure and faced with the new housing rules, the commission has been pressing towns to allow affordable housing to be part of the new projects. In the past year, Secaucus, Lyndhurst and Rutherford have accepted 735 affordable units in large-scale projects getting under way in their towns.
Other towns are livid about what they deem to be unfair pressure by state officials.
"I just completed a door-to-door campaign for our primary election, and I didn't find a single constituent who wants to support low-income housing with their tax dollars," said East Rutherford Councilman Jeff Lahullier.
SEEKING BALANCE
Susan Bass Levin, who as commissioner of the state Department of Community Affairs chairs both the Meadowlands Commission and the Council on Affordable Housing, said the commission is striking a proper balance between protecting the environment and easing the state's housing crunch.
She said the new housing rules allow towns to site developments sensibly, rather than leaving the decisions to judges and developers. The new rules allow towns to tax construction and use the money to build one affordable unit for every eight market-rate residential units or 25 jobs created by commercial development.
East Rutherford Mayor Jim Cassella said Xanadu alone may force his town to accept between 850 and 1,000 units of affordable housing. He said the obligation was extreme, particularly since the town had no say in the development approved by the New Jersey Sports and Exposition Authority.
Since its landmark 1975 Mount Laurel decision, the state Supreme Court has barred towns from closing their doors to affordable housing.
But the court has been silent on the obligations of regional entities run by the state -- such as the Meadowlands Commission and similar boards overseeing development in the northern Highlands and Pinelands.
John Payne, a Rutgers Law School professor, believes the state cannot legally ignore the obligations of towns in its land-use jurisdiction.
"If the state hasn't delegated the obligation to the towns, then it's clear to me the state has the obligation," Payne said. "If not, it's a gigantic loophole."
NO STONEWALLING
Earlier this month, state Superior Court Judge Jonathan Harris blasted East Rutherford and Carlstadt for stonewalling on affordable housing. He stripped the towns of land-use powers and said a landowner could build two high-rise towers beside the Hackensack, which would include 140 units of affordable housing.
While courts have never ordered towns to build housing, they have been generous in allowing developers to build more units than zoning permitted if they set aside some for the poor. Cassella and others believe that strategy has proved disastrous, visiting large-scale development on places that aren't equipped to deal with it.
"The lunacy of the Mount Laurel decision is there isn't a builder in the world using it because he cares so much about the poor," Cassella said. "It's about making money."
Other local officials say the matter is more complex.
In Rutherford, officials have supported the inclusion of 94 affordable units in a planned 800-unit development.
"Many times affordable housing is misunderstood," said Rutherford Mayor Bernadette McPherson. "If you look at the income levels of those people who qualify, these are our neighbors, our parents, our sisters and brothers in our community."
Steve Chambers covers land-use issues. He may be reached at schambers@starledger.com or (973) 392-1674.
The highly-anticipated 40-story, two-tower development planned for Jersey City’s Journal Square has taken another step forward, as City Council members voted to permit residential housing on the block next to the PATH Transportation Center.
"Progress has been made on the waterfront. Now it’s reaching Journal Square," City Council President Mariano Vega said Wednesday night, capping off the unanimous vote.
Lowell Harwood, managing partner of Harwood Properties, the builder, praised city officials for taking action, noting he’s 90 percent pleased with the pace of the project.
"I never give anything I’m doing a perfect grade," joked Harwood, who signed a deal in February to purchase 80 percent of the properties on the block, including the old Hotel on the Square building, which is now demolished.
Besides the properties he’s under contract to buy, Harwood has to purchase three other buildings on the block before he can build: 15-16 Journal Square, which houses McDonald’s and Songs Hallmark, and 12 and 14 Journal Square, home to a Kentucky Fried Chicken and formerly a Wendy’s.
Harwood has been negotiating with the owners but has not reached an agreement. If he can’t strike a deal, his contract with the Jersey City Redevelopment Agency calls for the city to step in and take the properties through eminent domain.
The owners — who couldn’t be reached to comment — would have to be paid fair market value and Harwood would be on the hook to reimburse the city for all expenses.
posted by Jones Lang LaSalle NJ News Blog at 9:41 AM
ROBERT K. FUTTERMAN doesn't come from an old real estate dynasty, but throughout his 23-year career in the industry he has been dogged by the legacy of Robert A. Futterman. "He was a real estate guy from the 1950's," said Mr. Futterman, the chief executive of Robert K. Futterman & Associates, a firm based in New York that specializes in retail property. "I'll speak to these older real estate guys now and then, and throughout my whole career, they've said: 'Robert Futterman, I know that name. Are you any relation?' "
Although the answer is no, Mr. Futterman learned enough about the other Mr. Futterman — who owned a company much like a modern-day real estate investment trust and wrote a book on urban development called "The Future of Our Cities," published in 1961 — to take away a lesson.
"He was this intensely visionary and hyper real estate guy" who died in 1961 at the age of 33, at the height of a very fast-paced career, when he choked on a piece of meat, Mr. Futterman said. The story has resonated with Mr. Futterman, who is himself described as "driven" and "visionary" by colleagues and competitors alike. Yet the same peers who describe this silver-haired 47-year-old as intense say he is happiest with his arm draped casually over a business associate, closing a deal.
"I like having West Coast offices, so I can, if I choose to, work all night," said Mr. Futterman, who shares custody of two sons, ages 13 and 11, with his former wife. "But I'm not totally obsessed. There's a balance. Time to play; be with the kids."
Still, Mr. Futterman has managed to expand his company, which he founded in 1998, into one of the country's largest independent real estate firms specializing in leasing retail space. He has branched out into advising shopping mall developers, dabbles in property development himself and is now working to expand overseas.
Mr. Futterman began his career in retail real estate after leaving the University of Maryland without graduating and with the realization that a job in concert promotion — a focus in college — was not in the cards.
Since then, he has completed transactions in retail real estate leasing totaling more than $2.5 billion. Former colleagues at Garrick-Aug Associates, where Mr. Futterman landed his first job in 1983 for $250 a week as a retail store canvasser — meaning that he paced the streets of the city looking for vacant retail spaces for lease — characterize him as a "machine." He rose through the ranks at Garrick-Aug to salesman, broker and then senior managing director.
"Throughout his tenure at Garrick-Aug, he was always the No. 1 producer and very well respected," said James Aug, son of Charles Aug, the firm's founder, who hired Mr. Futterman. "Many people tried to emulate him, and none ever succeeded."
Mr. Futterman's most notable job has been leasing 347,000 square feet of retail space in the Time Warner Center at Columbus Circle to retailers like Hugo Boss, Tourneau, A/X Armani Exchange, Sephora and Williams-Sonoma.
Mr. Futterman landed that job in 1999, a year after he left Garrick-Aug. Though Robert K. Futterman & Associates didn't have much of a history in multitenant high-end shopping centers aimed largely at tourists, Mr. Futterman wasn't intimidated. "I was the leasing agent for Donald Trump for many years, so we were involved in Trump Tower" while working at Garrick-Aug, he said.
"We were also the leasing agent at the Herald Center and the Manhattan Mall," he added, "so anything that's been vertical retail in New York, we've been involved in it."
In other high-profile leasing projects, he has helped Rockefeller Center attract a collection of jazzy stores like Anthropologie and restaurants like Brasserie Ruhlmann. Another project was the leasing of space at the General Motors Building at 767 Fifth Avenue, at 59th Street, to Apple Computer, which opened a flagship store there last month.
He has also been the leasing agent for the rejuvenated Grand Central Terminal. Grand Central "has been an enormous success," Mr. Futterman said. "Talk about a transformation from yet another situation where people said retail would never work," he added. "Now, we're 99.9 percent leased with a waiting list a mile long."
More recently, his firm, which has grown to 85 employees from 22 at its founding, landed the job of leasing 160,000 square feet of space at the Plaza Hotel on Fifth Avenue and Central Park South, where Mr. Futterman says he envisions a department store, perhaps a Harrods Food Hall. The firm has also been selected by the Port Authority of New York and New Jersey as the initial retail consultant to the World Trade Center site reconstruction, which could eventually include 500,000 square feet or more of retail space, Mr. Futterman said.
"We're happy about that," he said. "Part of the spirit of our attitude when it comes to helping out the Port Authority is, being a New Yorker, you'll do anything you can to help see that location get built."
It was 9/11 that prompted him to expand his company into the national tenant representation business.
"After 9/11, the phone went dead, and business seemed to have come to a halt," Mr. Futterman said. "We needed to reinvent ourselves as not just a regional company, but one that could take all the tenant-oriented relationships that we had and suggest that they hire us or that we represent them in formulating a strategy to expand around the country."
With his experience at the Time Warner Center, he has expanded into leasing the shopping-center components of mixed-use developments for property developers throughout the nation. Those sites include Meadowlands Xanadu in East Rutherford, N.J., and Mercato in Naples, Fla. Besides having its headquarters in New York City, his firm has offices in Los Angeles, Las Vegas and San Francisco and is poised to open a fifth office in Miami.
While the core of the business continues to be leasing retail space for tenants and landlords in New York City, the firm has also found a niche advising property developers.
The developer David Edelstein had asked Mr. Futterman to examine the Shops at Desert Passage, a 475,000-square-foot shopping complex languishing on the Las Vegas Strip, before buying it in 2004. The shopping center was poorly designed, Mr. Futterman said, with sales averaging around $400 a square foot, while other Las Vegas malls were at $1,000 a foot. But the location was good, he added. Mr. Edelstein also consulted with Mr. Futterman on redevelopment of a pedestrian mall on Lincoln Road in Miami Beach that was in decline, with little foot traffic, after hitting its peak with several upscale retailers in the 1950's. Both shopping centers are now having a revival.
Mr. Edelstein gave much of the credit for these turnarounds to Mr. Futterman. "Whenever I buy anything that has any retail component, I get his opinion," Mr. Edelstein said. "He's not a number cruncher. He's a visionary. He sees where there's value and where there's not, and can think ahead to figure out how to create the most value."
Mr. Futterman also joined in as a minority investment partner in the Shops at Desert Passage, which is being renamed Miracle Mile Shops.
NOW Mr. Futterman is looking to become more involved in international projects. "I would think there's enormous growth in the Far East in addition to markets like Dubai," he said. "I think developers there are looking to align themselves with a company that can bring them Western brands."
Even if he has cast his glance offshore, Mr. Futterman remains a dominant player in New York City, said Faith Hope Consolo, a former colleague at Garrick-Aug who last year became chairwoman of the retail leasing and sales division at Prudential Douglas Elliman Real Estate.
Ms. Consolo said that she remembers going head to head with Mr. Futterman when they were at the same company and that this continues today, only on a larger scale. "He's a fierce competitor, and he would say that about me, too," she said. "We used to meet in the hallways of our old office, and now we meet in the shopping streets across the country."
posted by Jones Lang LaSalle NJ News Blog at 9:39 AM
Sterling Properties Buys Townhome Site By Eric Peterson
MORRIS TWP., NJ-Sterling Properties has acquired the 1.6-acre site at 310 Madison Ave. here from Advance Residential Communities. The site is already fully approved for 13 luxury townhomes, and the Livingston, NJ-based Sterling is set to pick up the ball and start work immediately.
The deal was brokered by Holliday Fenoglio Fowler’s Florham Park, NJ office, with senior managing director Tony Cuccia leading the effort. The sale price was not disclosed.
According to information released by Sterling, each of the residences will have nearly 3,300 sf of living space and a two-car garage. The site itself is near a New Jersey Transit train station. Total cost of the project’s construction has not been released. And while construction is expected to begin shortly, a formal timeline has not been released.
