New Jersey Corporate Real Estate News Blog

2007-10-29T12:38:00.001-04:00

Last updated: October 23, 2007 11:03am

Hop Industries Buys 76,600-SF Building

By Eric Peterson

LYNDHURST, NJ-Hop Industries, a supplier of plastic film, sheeting and related products, has acquired the 76,600-sf building it had initially leased as part of a relocation from Garfield. The single-story building, consisting of warehouse, manufacturing and office space, is located at 1251 Valley Brook Ave.

The identity of the seller was not disclosed; the sale price was $8.8 million, or about $114 per sf. The building had at one time been fully occupied by a regional division of YKK USA Inc., which itself has relocated within the Northern New Jersey region.

And the building’s acquisition by Hop Industries was completed with the help of $6.8 million in permanent-debt financing arranged by James Gunning and Donna Falzarano of CB Richard Ellis Debt & Equity Finance, Saddle Brook. The funding was provided by Principal Real Estate Investors, according to Gunning.

“Hop Industries will greatly benefit from this new location,” Gunning says. “It’s convenient to New York City, with access to the ports, as well as routes 3, 17 and 21 and the New Jersey Turnpike.

Copyright © 2007 ALM Properties, Inc. All rights reserved. Reproduction in whole or in part without permission is prohibited.
For reprint information call 410-571-5893 or e-mail afaulkner@remedianetwork.com.

2007-10-29T12:37:00.001-04:00

Jones Lang LaSalle

Last updated: October 25, 2007 08:55am

Jones Lang LaSalle Acquires Klatskin

By Eric Peterson

HASBROUCK HEIGHTS, NJ-Jones Lang LaSalle made Charles Klatskin an offer he couldn’t refuse, and as a result his organization will become part of the larger JLL universe. JLL will acquire the assets of Klatskin Associates LLC and Klatskin Associates Management Co., which combined form the New Jersey operations of Lee & Klatskin Associates, based here. Both sides declined to disclose the terms of the deal.

“The combination of our industrial expertise and local knowledge with Jones Lang LaSalle’s depth of services will provide our clients with the ultimate real estate services team,” says Klatskin, a well-known figure in New Jersey commercial real estate circles. “And I am going to grow the industrial business for JLL.”

“This addition advances several of our strategic goals,” says Peter Riguardi, president of JLL’s tri-state region. “Those goals are commanding a major presence in key market, expanding our national industrial brokerage business and continually improving our service capabilities. The combination of our two firms adds an important piece to our national industrial services platform.”

Klatskin will continue to play what company officials term, “a key advisory role” for the New Jersey team. His firm’s other principals--Robert Kossar, David Knee, Charles Fern, Joel Lubin and Anthony Scaro--will join JLL as SVPs. An additional 20 Klatskin brokers will move over to JLL as well, boosting the firm’s New Jersey staff to more than 300.

Klatskin's main office here will become JLL’s third office in the state, the main office is in Parsippany. Staffers currently based in Klatskin’s Edison office will move into JLL’s existing office in Woodbridge by the first of the year.

Klatskin founded the firm as the Charles Klatskin Co. in 1966. In 2001, he hooked up with the Philadelphia-based Binswanger to form Binswanger Klatskin, and in 2005 moved over to an alliance with the California-based Lee & Associates to form Lee & Klatskin Associates. The deal will not affect Klatskin’s holdings in Forsgate Industrial Partners, an industrial development company he founded in 1965 that’s currently headed by his son, Alex.

For JLL, the deal follows a series of other recent acquisitions, including the Los Angeles-based Zietsman Realty and the North Carolina-based Corporate Realty Advisors earlier this year, and Spaulding & Slye in 2006.

2007-10-29T12:36:00.002-04:00

Jones Lang LaSalle

Last updated: October 26, 2007 12:00pm

Three Apartment Complexes Trade for $8M

By Eric Peterson

(Read more on the multifamily market.)

LIVINGSTON, NJ-In three separate transactions, apartment complexes totaling more than 100 units in three counties have been sold for a combined $8.1 million. The deals were brokered by Gebroe-Hammer Associates, based here, whose managing director says, “the sales exemplify the strength of the multifamily market in Northern New Jersey.”

In Palisades Park, sales associate Elliot Schechter, VP David Jarvis and EVP David Oropeza collaborated on the sale of 10 Henry Ave., a four-story mid-rise that was 95% occupied at the time of sale. The buyer, identified only as a “long-time Gebroe-Hammer client,” is said to own several buildings in the area. The buyer, another long-time client, sold the property as part of a 1031 exchange, according to Jarvis.

“Bergen County is a very attractive region for investors,” Jarvis says. “Any time a property becomes available, buyers act quickly and decisively to secure a winning bid.”

In East Orange, meanwhile, Oropeza negotiated the sale of 73 Carnegie Ave., an 18-unit, four-story building that traded for $1 million. The property had just one vacancy at the time of sale. The buyer was described as, “a first-time buyer based in New Jersey.” The seller was Golden Sun Realty of Paterson, NJ.

The third transaction came in Union City, where G-H VP Scott Callahan brokered the sale of Skyview Apartments at 1300 Palisade Ave., a five-story, 43-unit building. The buyer was described as, “a New York-based investor who is purchasing for the first time in Union City,” Callahan says. “The seller is a frequent Gebroe-Hammer client with a strong portfolio in both New Jersey and New York.”

2007-10-29T12:36:00.001-04:00

Jones Lang LaSalle

Last updated: October 23, 2007 03:13pm

Trucking Firm Leases 141,000 SF

By Eric Peterson

(Read more on the industrial market.)

SECAUCUS, NJ-Locally based Hartz Mountain Industries has signed Cous Transport Systems Inc. to a lease for 140,737 sf of industrial space at the company’s 77 Metro Way building, also here. The asset is located within Hartz Mountain’s Harmon Cove Business Park.

Terms of the lease were not disclosed. The building’s remaining space is currently listed on Hartz’s website with an asking rent “upon request,” and for a minimum term of five years. The remainder of the 384,543-sf building is still on the market, an availability that totals just more than 243,800 sf.

“The Northern New Jersey industrial market has been a consistent performer,” says Hartz Mountain president and COO Emanuel Stern. “At our Harmon Cove industrial properties, we continue to see high demand, partially due to the opening of Exit 15X on the New Jersey Turnpike, which essentially made Harmon Cove 15 minutes closer to the Ports of Newark and Elizabeth, as well as Newark Liberty International Airport.”

“We are looking forward to a long professional relationship with Hartz Mountain Industries,” says Su Lee, president of Cous Transport Systems. His company, a local trucking and motor freight operation, is currently based in Ridgewood.

The building at 77 Metro Way officially hit the market at the beginning of this year when Hartz held a broker open house for the then completely vacant building. The asset has had various occupants over the years, most recently an apparel distributor. Located near both Route 3 and the New Jersey Turnpike, and mass transit access via the Secaucus Junction train station, the building’s features include 27-foot ceiling heights.

2007-10-29T12:35:00.000-04:00

Jones Lang LaSalle

Last updated: October 24, 2007 10:09am

Bank Opens New 25,000-SF HQ

By Eric Peterson

CAMDEN, NJ-Susquehanna Patriot Bank has opened its new 25,000-sf headquarters at Steiner & Associates’ Ferry Terminal Building on this city’s waterfront, moving here from nearby Marlton. The move marks a couple of milestones: Susquehanna Patriot Bank is the first financial institution to be headquartered in Camden in more than two decades, and the recently completed 100,000-sf building is the first totally privately financed office building in Camden in at least 40 years.

“We serve customers and communities on both sides of the Delaware River,” says Joseph Lizza, president and CEO of Susquehanna Patriot Bank, which has 15 branches in South Jersey and another 22 in Pennsylvania, and approximately $2.1 billion in assets. “So this move places us in a very central, convenient location.”

The new four-story Ferry Terminal Building is an initial component of the Columbus, OH-based Steiner’s Cooper’s Crossing mixed-use waterfront development. The building itself includes three levels of office space, a restaurant and additional retail stores. At full build-out, Cooper’s Crossing will cover 30 acres and has a projected price tag in the $200-million range.

2007-10-29T12:32:00.001-04:00

Jones Lang LaSalle

Last updated: October 25, 2007 12:19pm

$6M Mortgage Set for 27-Unit Residential

By Eric Peterson

(Read more on the multifamily market.)

LAKEWOOD, NJ - A $6.4-million mortgage is set for a community of 27 attached homes in this Ocean County city. The loan, which will fund the project’s development, was secured through A-Z Financing, a Brooklyn, NY-based broker. The deal was facilitated by the Community Preservation Corp., the first made through the firm’s Trenton, NJ office, which opened earlier this year.

“This project is an example of why we opened the Trenton office, which is to provide more opportunities to build personal connections with borrowers in the central and southern portions of the state,” says Robert Riggs, CPC VP and regional director in Trenton. His firm, a not-for-profit mortgage lender, has its main New Jersey office in Jersey City.

“Lakewood is a town that is developing rapidly,” Riggs says. “This is a market-rate project that meets the needs for moderately-priced housing for large families in Lakewood.”

The developer of the project was described only as, “a local businessman.” Permits for work at the site have been filed and foundation work is expected to be finished before winter.

2007-10-29T12:29:00.000-04:00

Jones Lang LaSalle

Last updated: October 26, 2007 09:35am

Two Universities Start Work on $150M Tower

By Eric Peterson

NEW BRUNSWICK, NJ-Construction has officially started for a $150-million, 18-story medical research tower Downtown. Among other things, the building will house the Stem Cell Institute of New Jersey, which will occupy 160,000 sf across five full floors.

“The Institute will serve as the nexus of cutting-edge scientific breakthroughs that will improve and save lives of millions of our fellow citizens,” says Gov. Jon Corzine. “As we build this institute, we are building on a longstanding commitment to ensure that New Jersey is a world leader in the stem cell revolution.”

The Institute is a joint venture between Rutgers University and the University of Medicine & Dentistry of New Jersey-Robert Wood Johnson Medical School. The building will rise on a former parking lot next to Robert Wood Johnson University Hospital, near the Cancer Institute of New Jersey. Completion is slated for early 2011.

State, university and hospital officials have also announced that the facility will include the Christopher Reeve Pavilion, named for the late actor, a Princeton native, who became an activist for stem cell research following his paralyzing horse riding accident in 1995. The Stem Cell Institute itself will include a combination of research, clinical study and outpatient treatment facilities.

The money for the building is coming from state funds. A year ago, Corzine signed into law a bill providing $270 million to build a variety of research facilities. In June, almost $9.2 million in predevelopment funding was approved for the Stem Cell Institute of New Jersey, the initial allocation from that $270 million. And in July, Corzine signed the New Jersey Stem Cell Research Bond Act, a $450-million bond referendum that will provide research grants to eligible institutions over a 10-year period. The act will be on the agenda for the state’s voters in next month’s elections.

2007-10-29T12:28:00.000-04:00

Jones Lang LaSalle

Last updated: October 19, 2007 03:52pm

The Post-Bankruptcy Tug of War

By Joe Cavaluzzi

Joe Cavaluzzi is a regular contributor to Real Estate New Jersey.

What happens when your project gets mixed up in a bankruptcy? Some of the state’s top bankruptcy and real estate lawyers and bank workout specialists addressed that question during the recent RealShare New Jersey session moderated by George Jacobs, president of Jacobs Enterprises Inc.

The conclusion was that it depends on what the development partners have done to prepare for it in setting up their partnership and what the lenders have done in structuring the financing. In that regard, the Kara Homes bankruptcy was an irresistible sideline to the conversation.

Four panelists with extensive bankruptcy experience each took a position for the purpose of the discussion, with Ken Orchard, a workout specialists from NorthFork Bank, assuming the role of the bank trying to get its money back. “In deals with various partners, we start by underwriting the deal to the weakest link. Banks need to do a better job of focusing upfront on the lending process because time has never improved the situation once a company enters bankruptcy,” said Orchard, one of 14 bank creditors in the room during Kara Homes’ bankruptcy negotiations.

“I focus on the sponsorship,” he said. “Our first preference is to not wind up in court. Are we interested in seeing the developer proceed with the project? Yes, but we’re most interested in getting our money back.”

Attorney David Bruck of Greenbaum, Rowe, Smith & Davis represented the interests of the debtor. He was one of 20 lawyers in the room for Kara’s bankruptcy discussions. Unlike the other 19, who represented creditors in the case, Bruck was sitting at Kara Homes’ table.

Kara Homes had joint venture interests with its partners on individual developments, and all of the partners had an interest in the land-owning entity as well. But the partnership and its borrowing structure had likely not been well thought-out in advance and had not addressed what would happen if the project ran into trouble. That leaves the debtor to assume the contracts with the other partners or reject the contracts. But Bruck said the latter might be an unfavorable choice because the debtor may want to sell the contracts. “There should be someplace in the lending agreement that defines how to pass on the managerial rights of the debtor,” he said. “Without that, the creditors’ committee has the right to take over the project, and the partners may not want that.”

Andrew Sherman, a bankruptcy attorney with Sills Cummins Epstein & Gross, said most partnerships don’t address the possibility of bankruptcy when setting up a deal. Structuring it as an LLC or other type of partnership may work better than a simple partnership agreement. In the RealShare New Jersey discussion, Sherman represented the interests of a partner to a development company that has declared bankruptcy.

“From a lawyer’s perspective, you can avoid bankruptcy by planning for it when the partnership is drawn up,” Sherman said. “Or, when everything starts to fall out of bed, you can start getting into the partnership documents and figure out what’s going to happen when things start to get worse.

“Once you get into bankruptcy court, all of the provisions you put in may not matter because the judge is going to say his goal is to preserve value to those who are secured lenders or those who are the loudest,” Sherman explained. “Usually, the loudest wins.” Richard Hauer, a bankruptcy partner with the real estate accounting and advisory firm Schonbraun McCann Group, assumed the role of mediator for the purpose of the panel discussion. He, too, was concerned with preserving value.

“My role is to try to extract value out of the situation, to bring a level of reasonableness to all of those contracts,” Hauer said. “I’m there to avoid a liquidation because in many situations that’s not going to be in the best interest of my client. It probably is in everybody’s best interests to keep the deal together and not turn management of the project over to an outside entity.”

One thing all of the panelists agreed on is that time is on the side of the borrower. “The debtor views time as an ally,” Bruck said. “People get tired, but the other side of this is that the market is different. So, we hope to get out as quickly as possible. The market was substantially different when Kara got out [settling its bankruptcy in early October of this year] than when it filed for bankruptcy two years ago.”

Deal fatigue sets in over time, according to Orchard. Creditors wear down. Their attention turns to other interests. “The borrower doesn’t get deal fatigue, it’s everybody else,” he said.

RealShare New Jersey, held in the Glenpointe Marriott in Teaneck, was produced by Real Estate Media, which publishes Real Estate New Jersey and GlobeSt.com.

2007-10-29T12:25:00.000-04:00

Jones Lang LaSalle

Last updated: October 26, 2007 12:08pm

Regus Leases 21,000 SF at Mack-Cali Asset

By Eric Peterson

PARAMUS, NJ-The Regus Group, a Dallas-based provider of furnished offices, has leased 21,000 sf at Mack-Cali Realty’s Mack-Cali Centre III at 140 E. Ridgewood Ave. here. On the building’s fourth floor, the company will open a business center consisting of 86 offices, 147 workstations, one boardroom, one videoconferencing studio and one meeting room.

The term of the lease is 138 months, with CB Richard Ellis representing Regus in the transaction. Further details were not released; an availability in the 240,000-sf building is currently listed with an asking price of $26 to $28 per sf.

“We selected Paramus for our new location because of the strong growth trends that the Northern New Jersey office market continues to experience,” says Michael Berretta, VP-business development for Regus. “We have experienced increased demand from clients in this area, and our new Paramus center will allow us to offer an alternative to our Saddle Brook business, which has been a strong performer.”

The new business center is Regus’ seventh deal with the Edison, NJ-based Mack-Cali, and its 22nd center overall in New Jersey. The company’s worldwide reach is now 950 locations in 70 countries.

2007-10-29T12:24:00.000-04:00

Jones Lang LaSalle

Last updated: October 29, 2007 03:45am

Kohl’s and Sam’s Club Sign Leases for Center

By Brianne Harrison

LINDEN, NJ-Kohl’s and Sam’s Club have signed leases to anchor Linpark Square, a 280,000-sf retail complex currently under construction here. Garden Commercial Properties, the Short Hills-based developer of the site, oversaw the lease signing.

Sam’s Club will occupy nearly 140,000 sf of space, and Kohl’s has reserved slightly more than 100,000 sf. Another 25,000 sf remains available for future tenants. “Linpark Square combines all the geographical and demographical elements that retailers seek in a commercial complex,” says Mario Dudzinski, VP of real estate for Garden. “Its location along the Route 1 and 9 corridor will ensure an abundance of drive-by traffic, while the surrounding communities provide an established customer base.”

When complete, Linpark Square will consist of five free-standing retail buildings. The complex is at the intersection of Routes 1 and 9 and Park Ave. Garden Commercial expects the project to be complete in 2008.

2007-10-29T12:19:00.001-04:00

Jones Lang LaSalle

Last updated: October 29, 2007 10:58am

$20M Loan Completes Building Improvements

By Eric Peterson

(Read more on the debt and equity markets.)

PARSIPPANY, NJ-UBS Global Asset Management has picked up a $20-million first mortgage secured by its ownership share in 9 Entin Rd., a 197,000-sf, three-story office building on 15 acres here. As reported by GlobeSt.com, UBS, on behalf of one of its value-added funds, teamed up with Lincoln Property Co. just more than a year ago to buy the asset from Hartz Mountain Industries for $26.8 million, or about $136 per sf.

The 36-month, fixed-rate loan was provided by ING Investment Management in a transaction arranged by Dana Brome and Susan Larkin of the Hartford office of Holliday Fenoglio Fowler. HFF will also service the loan.

“The borrower purchased 9 Entin Rd. in June 2006 and took the opportunity to raise occupancy by reconfiguring the access road, which originally was only accessible from the southbound side of I-287,” Brome says. “After reconfiguring the roadway connecting Entin Rd. to the adjacent Macl-Cali Business Campus, tenancy rose from 47% to 74%, and is continuing to rise.”

The latest tenant signing came just last month when DuPont subsidiary Belco took 23,000 sf. And earlier this year, Daiichi Sankyo signed a lease for 32,000 sf, joining AIU Insurance and Emerson Radio Corp. on the tenant roster. Besides the roadway reconfiguration, 9 Entin Rd. has also gotten common area upgrades since it was acquired.

2007-10-29T12:14:00.000-04:00

Jones Lang LaSalle

Meadowlands Redevelopment Difficulties Continue

By Brianne Harrison

LYNDHURST, NJ-In a letter sent to EnCap October 5, the State Environmental Infrastructure Trust informed the developer that it could no longer draw from the nearly $300 million in publicly supported low-interest loans that were issued to cover the costs of the Meadowlands project. EnCap was also instructed to withdraw three pending applications for almost $3.5 million in withdrawals from the loan pool.

This is the latest setback for the once-promising project, which sought to place luxury housing, hotels and golf courses on land that was formerly used as landfills. According to Christopher Gale, an official with the New Jersey Meadowlands Commission, EnCap was chosen to remediate and redevelop the site because “it was judged at the time that they had unique experience from their landfills-to-golf project in Houston.” The project he refers to is the successful Wildcat Golf Club, an $18-million two-course club on the site of a former landfill.

EnCap began remediating the site in 2004. Work ground to a halt earlier this year, however, as costs began spiraling out of control and the Department of Environmental Protection slapped EnCap with a $1-million fine for failing to control methane emissions from the site. EnCap requested permission to replace the contractor responsible for cleaning up the site, Mactec Development Corporation, but the request was rejected by state officials. Mactec has since left the site and has filed claims seeking $25 million in back payments from EnCap.

In an effort to cover the rising costs of the project, EnCap attempted to raise almost $400 million by issuing bonds backed by future property tax breaks the company expected to receive from North Arlington and Rutherford. The state rejected the proposal.

In light of EnCap’s continuing financial difficulties, the Meadowlands Commission issued two letters, on September 10 and October 5, threatening to terminate EnCap’s development agreement on November 20 unless the company resumes work on the site and pays a $16 million security guarantee. According to the Meadowlands Commission, EnCap has not yet responded to the letters.

The day after the first letter from the Meadowlands Commission was issued, the DEP issued an Administrative Order and Notice of Civil Administrative Penalty Assessment, listing many violations of state environmental protection laws at the Meadowlands site. These violations include:

Failure to properly fence the project area, with the result that waste continues to be illegally dumped at the site
Placing dredged material that did not meet requirements as cap material
Failure to place necessary decontamination equipment at the site, resulting in contaminated soil being tracked out of the site and onto nearby roadways
Failure to confine the excavation to a size consistent with the number of pieces of digging equipment and trucks at the site
Excavating waste without properly disposing of it
Failure to control surface water run-off
Allowing fill material to erode into a nearby creek
Failure to maintain or acquire certain necessary permits

EnCap was given seven days to acquire the necessary permits and to address many of the violations. In addition, the DEP issued a $3.3 million demand for payment to cover the cost to the state of disposing of dredged fill dirt from the site. In 2004, EnCap promised to arrange for the disposal of the fill dirt. According to the DEP, EnCap is currently appealing the fines and the AONOCAPA.

According to both the Meadowlands Commission and the DEP, it has not yet been determined what will become of the project if EnCap’s development agreement is revoked. Repeated calls and e-mails to EnCap seeking comment were unanswered.

2007-10-29T12:12:00.000-04:00

Jones Lang LaSalle

122-Room Courtyard Under Construction

By Eric Peterson

WAYNE, NJ-Jos. L. Muscarelle Inc. has received its approvals to build a new Courtyard by Marriott hotel at the confluence of I-80 and routes 23 and 46 here. The three-story hostelry will contain a total of 122 guest rooms once it's completed, in about a year. Cost of the project has not been released.

“This has been a long process,” says Joseph Muscarelle, CEO of the Maywood, NJ-based development company. “But we’re looking forward to completing the project. We feel as though it will do very well in this location. There are lots of residents and businesses that will benefit from the services the hotel has to offer.”

The new hotel is the third for Muscarelle, and second in New Jersey. The other Garden State property is a 154-key Courtyard by Marriott that’s currently under construction in Paramus. And Muscarelle has a partnership interest in the 619-room Westin Hotel that’s part of Pittsburgh’s Liberty Center mixed-use development.

2006-07-17T16:37:00.000-04:00

Jones Lang LaSalle
New Jersey adding jobs at healthy pace
By JEANNE RIDGWAY
Courier-Post Staff

April and May were good months for private-sector employment in New Jersey. The state added 12,300 new jobs, the best gain this year.The spike offsets a small job loss during 2006's first quarter, according to the New Jersey Department of Labor and Workforce Development. Overall, New Jersey added a net 11,900 private-sector jobs since the start of the year.

"The state is doing better than we have done during the last two years, and better than the rest of the country," said Philip Kirschner, New Jersey Business & Industry Association president.
"If we can get to four straight months of growth, that's a solid trend and that is something that the state should be able to crow about," Kirschner said.

Protocall Staffing in Cherry Hill is making 33 percent more in sales this year filling orders for temporary industrial workers. Overall, "our industry expects to increase our sales figures by 9.1 percent," said Roy Fazio, Protocall's vice president. The company is also helping many companies find full-time workers, especially in the office/administrative field. "We are up 12 to 13 percent in fees for direct hire," Fazio said. "The higher the skill level, the greater the need to fill it." Higher-paying jobs in The Burlington-Camden-Gloucester county region is outpacing the state in generating jobs, according to the Federal Reserve Bank of Philadelphia.

In May, the figures were 1.5 percent for the tri-county region, compared with 1 percent for the rest of the state. The tri-county area is also generating higher-paying jobs.

"Professional and business services are picking up strongly," said Tim Schiller, senior economic analyst for the Fed.

"There is also a lot of construction of office buildings, and that's another view of it," he said.
On the negative side, residential building is slacking off and consumer reaction to higher fuel prices is still waiting to be felt, Schiller said.

Overall, "I think what we are going to see is slower growth in the year's second half, both locally and nationally. It looks like an orderly transition to a more subdued pace," Schiller said.

The New Jersey Business and Industry Association expects fuel prices to eventually dampen consumer confidence and business buying. For now, people are spending.

"The ability of the consumers to adjust is remarkable. If you want to drive your car or buy certain products, you just hold your breath and do it," Kirschner said. Consumers' ability to adapt is also reflected in the travel industry this summer.

"I don't think that the price of gasoline has affected the vacation level too much," said Stephanie Mensch, public affairs manager for AAA South Jersey. "It's the everyday travel that is hitting us in the pocketbook," she said. Closer to home consumers continue to travel, but they are staying closer to home, Mensch noted. "This is New Jersey, and people go to the shore," she said. On June 21, a driver in South Jersey paid $2.87 for a gallon of gasoline. This compares with $2.06 a gallon sold on the same date last year.

In residential real estate, the resale of preowned houses in South Jersey picked up during the first quarter of 2006, with 52,500 units sold, compared with 49,600 units during the final quarter in 2005. Buyer affordability continues to slip statewide, though, with a $84,672 annual family income needed to buy the median-priced home priced at $356,700. The state median income is $80,613.
For buyers in South Jersey, resale prices are much lower than the state as a whole. Also, prices are not rising at the giddy pace they once were. During the year's first quarter, the median price for a resale home was $226,100, an increase of just $100 over the final quarter of 2005.

Nationwide, demand for commercial real estate space remains healthy. The sector is not without concerns, however, including energy costs, rising interest rates and slower-than-expected job growth, according to the National Association of Realtors.

Bill Glazer, Keystone Property Group president, believes in the possibilities for commercial real estate profit in South Jersey. Keystone, of Conshohocken, Pa., purchased the Barrington Industrial Park in February, which is now 95 percent occupied, up from 30 percent. Keystone is also redeveloping 112 W. Park Drive, a 115,000-square-foot office building in East Gate, Mount Laurel.
"That will be a best-in-class asset. We are looking among the best national tenants to fill it, a company that would be a household name because that is the caliber of the building we are building," Glazer said.

"Rental rates are just starting to tighten now. Since 9/11, the market has been soft. It's taken many years to backfill that excess supply, and now it's beginning to impact on the rates," Glazer said.
Signals are "go" for more development in Atlantic City, where economic growth is resonating within the entire South Jersey economy.

By itself, the casino industry has brought aggressive development to the shore. Now the region sees new opportunities to enhance the total experience for visitors through other types of development, such as retail, golfing and fine dining.

Ripple effect
"The casino industry has an enormous ripple effect on the whole economy, including housing and malls," said Milton Leontiades, former dean of the Rutgers School of Business.
More expansion is anticipated as serious money is placed on new land tracts in Atlantic City, Leontiades said.

"Recent acquisitions by Morgan Stanley and MGM promise added impetus to a growing economy at the shore," he said. "It's a money pump for the state and particularly for that region."
Reach Jeanne Ridgway at (856) 486-2479 or jridgway@courierpostonline.com

Published: June 23. 2006 3:10AM

2006-07-17T16:36:00.000-04:00

Jones Lang LaSalle
NYC Firm Heads to Princeton
Yvonne Darling
NJBIZ Staff

6/23/2006 - IncreMental Advantage, a national research and conference planning firm formerly branded as The Wall Street Transcript, has relocated to Princeton. The company had been based in New York City. "We believe that Princeton will provide us with a very high-caliber talent pool. As a research-centric business, access to a highly educated labor market is of critical importance," David Wanetick, the company’s managing director said. The Princeton office opened on June 1 and will be fully staffed by mid-July, according to the company.

2006-07-17T16:35:00.000-04:00

Jones Lang LaSalle
HQ Global leases at 5 Penn Plaza
Published on June 26, 2006

Plans to build a new train hub west of Pennsylvania Station promise to transform the area around the West 34th Street transportation hub, and nearby office buildings are already attracting tenants and drawing higher asking rents.

HQ Global Workplaces, which rents office suites and provides support services for small businesses, is opening a 27,877-square-foot office in the neighborhood. The new digs are at 5 Penn Plaza, on Eighth Avenue between West 33rd and West 34th streets, where the asking rent was increased several weeks ago by $4 to $38 a square foot.

Dallas-based HQ Global Workplaces "has had so much growth that it wanted to open another office," says Peter Turchin, a senior vice president at CB Richard Ellis, which represented both the landlord and the tenant on the deal. HQ decided on Penn Plaza in part because of its proximity to transportation, including the Long Island Rail Road, New Jersey Transit and a handful of subway lines.

The new office space, which occupies the entire 23rd floor, has not been built; HQ Global Workplaces is scheduled to take occupancy in about five months. The company, which has more than 750 locations globally, has 14 sites in Manhattan, including space at 1 Penn Plaza and 11 Penn Plaza.

So far this year, 80,000 square feet have been leased at 5 Penn Plaza by Sirius Radio, Allied Advertising and other tenants. All of the space was put on the market when CNN moved to the Time Warner Center more than a year ago. The building's penthouse and two floors in its base are available.

State officials are moving forward with plans to build a new Moynihan Station transit hub on the site of the James A. Farley Post Office, which is west of Eighth Avenue. In addition, developer Steven Roth of Vornado Realty Trust is circulating a $7 billion proposal to move Madison Square Garden to Ninth Avenue as part of the renovation.

--Julie Satow

2006-07-17T16:34:00.000-04:00

Jones Lang LaSalle
UBS swings into more space on Park

Investment Banking Giant UBS is taking over 45,500 square feet, or the entire seventh floor, at 101 Park Ave., between East 40th and East 41st streets. UBS, which already occupies 97,400 square feet on five floors in the building, signed a sublease with law firm Morgan Lewis & Bockius.

The lease runs through September 2014. The asking rent in the building is $50 a square foot.

Morgan Lewis was using the seventh floor as a swing space for its employees while it renovated the 175,400 square feet it occupies on nine floors in the building. The renovations, which took nearly two years, were completed in March.

"Morgan Lewis had an ingenious idea to move groups of people downstairs while their offices were being renovated so it wouldn't be so disruptive," says Barbara Winter, senior vice president at Jones Lang LaSalle, which represented the law firm. Cushman & Wakefield Inc. represented UBS.

Sun Microsystems, HJ Kalikow and Booz Allen Hamilton are among the other tenants at 101 Park.

2006-07-17T16:30:00.000-04:00

Jones Lang LaSalle
Bradley Pharma swings to loss on R&D charge

June 23, 2006
The specialty drug firm said its quarterly loss was due to a hefty research and development charge and a share-based compensation expense.

(AP) — Bradley Pharmaceuticals Inc., a specialty pharmaceutical firm, said Friday it swung to a quarterly loss due to a hefty research and development charge and share-based compensation expenses.

The Fairfield, N.J., firm lost $352,642, or 2 cents per share, in the first quarter, compared with a profit of $2.2 million, or 13 cents per share, during the same period last year.

Results included a non-refundable charge of $2.9 million, or 18 cents per share, related to a collaboration and license agreement with MediGene AG and a share-based compensation expense of $927,000, or 5 cents per share.

Quarterly revenue climbed 5% to $34.8 million, primarily on higher sales in its Doak Dermalogics division. The unit's sales rose 7% to $29.4 million.

On average, analysts polled by Thomson Financial were looking for earnings of 18 cents per share on sales of $36.5 million.

Bradley shares dropped 8.8%, to $11.86 on the New York Stock Exchange. Over the past year, the stock has traded between $9.15 and $15.09.

2006-07-17T16:25:00.001-04:00

Jones Lang LaSalle

GlobeSt.com Commercial Real Estate News and Property Resource
Last updated: June 23, 2006 11:18am
Mack-Cali Declares Cash Dividend
By Eric Peterson

CRANFORD, NJ-The board of directors of Mack-Cali Realty Corp. has declared a quarterly cash dividend of $0.63 per common share, indicating an annual rate of $2.52 per common share. The dividend is for the period of April 1, 2006 though June 30, 2006, and will be paid on July 17 to shareholders of record as of July 6.

The REIT’s board has also declared a cash dividend on its 8% Series C cumulative redeemable perpetual preferred stock ($25 liquidation value per depositary share, each representing 1/100th of a share of preferred stock), equal to $0.50 per depositary share for the period April 15, 2006 through July 14, 2006. The dividend will similarly be paid on July 17 to shareholders of record as of July 6.

Mack-Cali’s holdings now total 304 properties, mostly in the Northeast, adding up to approximately 34.3 million sf. That total was boosted, of course, by the REIT’s recent acquisition of a substantial portion of the Gale Co.’s office holdings.

Copyright © 2006 ALM Properties, Inc. All rights reserved. Reproduction in whole or in part without permission is prohibited.

2006-07-17T16:23:00.000-04:00

Jones Lang LaSalle

GlobeSt.com Commercial Real Estate News and Property Resource
Last updated: June 23, 2006 11:23am
Electronic Security Firm Takes 32,000 SF
By Eric Peterson

FAIR LAWN, NJ - Henry Bros. Electronics Inc. has signed a long-term lease for 31,801 sf at 17-01 Pollitt Dr. here and will move its headquarters to the building from the company’s current location in Saddle Brook, NJ. The move will increase the company’s space by some 40%, according to company officials.

"We believe that this new facility will accommodate the growth of our operations and enable us to expand our customer base," says the company’s CEO, James Henry. "The new facility will combine our New York and New Jersey regional integration business with our corporate headquarters and two subsidiaries, Viscom Products and Airorlite Communications."

Henry Bros. Electronics is a turnkey provider of technology-based integrated electronic security systems and products. Besides its headquarters, the location will be used for assembly, testing and training, as well as warehouse space.

The single-story, 105,367-sf 17-01 Pollitt Dr. is a flex building owned by Kushner Properties of Florham Park, NJ. The lease was negotiated by Chris Marx of Studley representing Henry Bros., and by Ira Bloom, director of commercial real estate for Kushner and Dennis Gralla and Chris Tichio of Alexander Summer, exclusive brokers for the property. The new lease runs through October 2016, and Henry Bros. is expecting to move in during Q3 of this year.

Henry Bros. joins a tenant roster that include US Technologies, Semperit, Kyodo and Vyteris Inc. As reported by GlobeSt.com, the latter signed a 26,255-sf lease with Kushner earlier this year.

Copyright © 2006 ALM Properties, Inc. All rights reserved. Reproduction in whole or in part without permission is prohibited.

2006-07-17T16:22:00.000-04:00

Jones Lang LaSalle
GlobeSt.com Commercial Real Estate News and Property Resource
Last updated: June 23, 2006 01:31pm
Agfa-Gevaert Signs 88,000-SF Renewal
By Eric Peterson

RIDGEFIELD PARK, NJ-Agfa-Gevaert Group has renewed its lease for a total of 88,147 sf of office space at 100 Challenger Rd. here. The Hartz Mountain Industries-owned building is within that company’s Overpeck Centre, a multi-building corporate campus.

The signing also marks two decades of Agfa’s occupancy of the building. Terms of the lease were not disclosed.

"Lease renewals are becoming the sign of a tightening market," says Emanuel Stern, president and COO of the Secaucus, NJ-based Hartz. "New activity in the Northern New Jersey marketplace has been moderately strong, and as a result of the improving occupancy, existing tenants in the market are left with few local options. Ultimately, we may see this becoming a more dominant force that will continue to drive leasing rates."

The building at 100 Challenger Rd. is virtually leased up, and Hartz is focusing on the 61,000 sf that remains available at the neighboring building at 65 Challenger Rd. The latter, at 167,000 sf, is similarly sized as 100 Challenger Rd. The 60-acre Overpeck Centre, meanwhile, has a build-out capability of about one million sf, and current major tenants besides Agfa-Gevaert include Summit Bank, Daewoo, Samsung and Degussa. A Hilton Garden hotel is slated to open within the campus in the spring of 2007.

The Agfa-Gevaert Group develops, produces and distributes a range of analog and digital imaging systems and IT solutions, primarily for the printing industry and the health care sector. Its business groups are Agfa Graphics, Agfa HealthCare and Agfa Specialty Products, and its parent company is based in Mortsel, Belgium.

Copyright © 2006 ALM Properties, Inc. All rights reserved. Reproduction in whole or in part without permission is prohibited.

2006-07-17T16:19:00.000-04:00

Jones Lang LaSalle

Ex-Superfund site in Mt. Olive may get Target
Former landfill location eyed for shopping complex
BY ZENAIDA MENDEZ
DAILY RECORD

MOUNT OLIVE -- A Superfund site taken off the federal Environmental Protection Agency's National Priorities List two years ago may become the home of 400,000-square-foot shopping complex, including a Target store.

Township council President Robert Greenbaum said that Target Corp. has expressed interest in building a store at the 102-acre Combe Fill North site on Gold Mine Road.

Greenbaum said that he and council Vice President Steven Rattner have been in negotiations with attorney Glenn C. Geiger, who is representing Target, for a year, and, at its public meeting next week, the council will consider a resolution outlining the proposal's terms and conditions.

"It's very complicated,"Greenbaum said Wednesday. "They need to do a significant amount of due diligence in terms of 'What's in the landfill?, What are the risks associated with building on a landfill?' There are a lot of contingencies involved."

Ex-garbage dump
Combe Fill North landfill occupies 65 acres of a 102-acre property on Gold Mine Road. That land is predominantly surrounded by commercial properties. The site operated as a sanitary municipal landfill from 1966 to 1978, accepting municipal and industrial waste and small amounts of dry sewage sludge. Combe Fill Corporation purchased the landfill in 1978. The following year, groundwater contamination was found beneath the site. The landfill was closed in 1981. It was declared a Superfund site in 1982. In 1991, the state Department of Environmental Protection completed remedial work, including installation of a clay cap, landfill gas venting system, and perimeter fencing.

Should Target Corp. acquire the property and build, it would need approvals from the township and the state.

Greenbaum said that it is a viable option for a site that currently is not on the tax roll but, if developed by Target, could infuse a significant amount of money into the municipality.

"This would result immediately -- once all of the contingencies have been met and there is building approval from the planning board -- in between $750,000 to one million in back taxes owed to the township," Greenbaum said.

There also is an environmental tax lien on the property by the state, which is seeking to recoup past clean-up costs, Greenbaum said.

The municipality will hold a sale of the tax certificate, and Target is expected to be the high bidder, Greenbaum said. Once sold, the new owner will pay property taxes from then onward, Greenbaum added.

Geiger referred questions to Target Corp.'s public relations department. That department did not respond Wednesday.

According to its Web site, Target operates more than 1,300 stores, including 34 stores in New Jersey. There are two Target stores in Morris County: East Hanover, on Route 10, and Rockaway Township on Mount Hope Avenue.

Mayor Richard De La Roche said that he would welcome Target to Mount Olive if the environmental and legal issues can be resolved.

"All these things can be worked out, but it's early in the process" to say definitively, he said.
"This would seem to be a good use for it," De La Roche said, regarding the Combe Fill North property. "We always are looking to bring in commercial enterprises."

In February, 2005, Target Corp. presented a concept plan which proposed construction of a single-level, 127,000 square foot store in Sutton Plaza, on Route 206, to the township planning board. That building would've replaced the 55,000 square foot building which formerly housed Ames.

Target Corp. never submitted a site plan to the planning board for approval.

Flanders resident Don Markey, who opposed construction of Target in Sutton Plaza, said that building the store on the Combe Fill site, near the ITC shopping center, is more suitable.
"Our whole goal in Mount Olive is to get more ratables to offset taxes but not ruin the ambiance of the community,"he explained.

"There is a need here (for retail such as Target), but they have to be put in the proper place," he added. "What better than a large corporation coming in, taking unusable land, and turning it back into usable space that benefits the community?"

2006-07-17T16:15:00.000-04:00

Jones Lang LaSalle

City Eyes 15-Block Redevelopment
By Eric Peterson

HOBOKEN, NJ-The city council here this week is expected to designate a 15-block area as "an area in need of redevelopment." Located in the southwestern part of this Hudson County community, it would be the latest of a series of such designations that have helped reshape the city in recent years.

The proposed redevelopment zone, which totals some 13 acres, is bordered by Paterson Avenue and Observer Highway along its northern edge. Neighboring Jersey City provides the other two boundaries for the tract. According to Mayor David Roberts, once a redevelopment declaration is made, city officials will be looking to have several private developers redo the tract with a series of smaller projects rather than turning the whole thing over to a single entity.

The city is also looking for mixed uses to come out of this, Roberts says, with a variety of commercial and residential uses on the agenda. The redevelopment would also include significant streetscape improvements, according to Roberts, as well as an open space component for recreational purposes.

The area as it currently stands contains more than 30 individual properties, including a variety of commercial and industrial buildings. It also includes both surface and structured parking, a handful of residences and a holding area for police equipment.

The pending designation coupled with the number of individual properties involved in the zone comes against a backdrop of a pending vote in the state legislature on the issue of eminent domain and the ability of communities to utilize it. That legislation, if passed, would reduce communities’ ability to initiate eminent domain proceedings. But Roberts says the pending redevelopment would not involve "hostile takeover." City officials also say that their plans comply with the pending legislation based on the principle that the ongoing redevelopment of the tract would involve a number of developers rather than just one.

City officials have not released a timeline for the redevelopment, pending the outcome of the expected city council vote.

Copyright © 2006 ALM Properties, Inc. All rights reserved. Reproduction in whole or in part without permission is prohibited.

2006-07-17T16:14:00.000-04:00

Jones Lang LaSalle
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

2006-07-17T16:11:00.000-04:00

Jones Lang LaSalle
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

2006-07-17T16:10:00.000-04:00

Jones Lang LaSalle
Foundation Crack
By MICHAEL CORKERY
June 20, 2006; Page C1

Here's some troubling news from the home front. As the housing market cools, KB Home, the giant Los Angeles builder, says it has laid off some 7% of its workers. KB had been expecting the housing market to grow another 20% to 30% through next year, says CEO Bruce Karatz. When that didn't materialize, it started letting go of workers in places like Nevada and Arizona.
With each passing day, it seems, a key piece of the economy's foundation gets a little more wobbly.

The housing boom provided important fuel for the job market the past few years. The real-estate sector has been associated with roughly 20% of the four million payroll jobs created in the U.S. economy in the past two years, according to Moody's Economy.com, a research firm. That includes positions ranging from residential-construction jobs and real-estate agents to title insurers and workers at Home Depot.

If that source of growth disappears, it might not cripple the economy, but it will probably be felt.
Today, the Commerce Department gives a broader read on how much pain the home builders are facing. Economists expect the Commerce Department to report that builders started new projects at an annual rate of 1.88 million units in May. That would be up after starts tumbled to a 1.85 million-unit rate in April, but down 8% from a year ago.

"It's unlikely the home-building industry is going to be the savior of job growth, at least over the next six months," says Mr. Karatz. Lenders like Ameriquest and Washington Mutual also have announced layoffs.

KB Home is in better shape than many other builders. Its second-quarter net income rose 14%, though it said orders are dropping. According to the National Association of Home Builders index, optimism in the industry is at its lowest level in more than a decade.

The overall job market still looks pretty healthy. Jobless claims filed by workers, for instance, last week dropped to less than 300,000, generally a mark of a robust labor market. But if the economy is going to keep producing jobs, it looks increasingly like it will need some fresh new legs to stand on.

Write to Michael Corkery at michael.corkery@wsj.com

2006-07-17T16:08:00.000-04:00

Jones Lang LaSalle
Trizec's Deal Was All About Timing
Acquisition of Office REIT Was Expected by Analysts, But in Months, Not Weeks
By JENNIFER S. FORSYTH
June 21, 2006; Page B7

After the string of sizable deals that have taken place among real-estate stocks over the past two years, market experts weren't shocked that a company as big as Chicago-based Trizec Properties Inc. could be acquired. What surprised them was the timing.

On June 5, Trizec Properties, a real-estate investment trust that specializes in U.S. office buildings, announced it and its sister company, Trizec Canada, had entered into an agreement to be sold to Brookfield Properties and the Blackstone Group, a private equity firm. The deal -- $4.8 billion in cash and the assumption of about $4.1 billion in debt -- shows there is almost no real-estate company too large to be bought. It also shows there are few deals too complex to pull off.

Yet the announcement still caught many investors off guard. "I think a lot of people weren't surprised to see Trizec listed among acquisition candidates, but I think a lot of people were surprised to see it take place this year," says Jay Rosenberg, co-portfolio manager of FAF Advisors. Says Peter Munk, chairman of both Trizec Properties and Trizec Canada: "That is the problem with expert opinion." Once Mr. Munk decided this was the perfect time to sell a big real-estate company, the deal was brokered in weeks.

But a number of decisions made by Trizec executives for the benefit of their own operations ended up smoothing the way for Brookfield and Blackstone to buy the company. "We created value by looking beyond the obvious and making strategic choices designed to increase Trizec's worth," says Tim Callahan, chief executive of Trizec Properties.

One perceived obstacle was the tax constraints for the Canadian shareholders. When Mr. Munk made the decision to convert his closely held TrizecHahn Corp. into a publicly traded U.S. REIT in 2002 and rename it Trizec Properties, company executives had to ensure that a majority of the owners were U.S. investors for it to be considered a domestically controlled REIT -- an Internal Revenue Service designation that has favorable tax consequences for foreign investors.
Trizec executives set up an intricate two-company system in which the foreign investors could own stock in a company to be traded on the Toronto Stock Exchange, called Trizec Canada. Trizec Canada, in turn, would hold 38% of Trizec Properties' stock, and Trizec Properties would be traded on the New York Stock Exchange. The structure allowed the Canadian investors to avoid paying a U.S. tax known as the Foreign Investment in Real Property Tax Act of 1980, if they held the shares until 2007. At that time, Canadian shareholders can convert their shares in Trizec Canada to Trizec Properties free of the FIRPTA taxes. That is why real estate experts expected things to get interesting for Trizec by 2008.

But tax issues turned out not to be headaches because Canadian investors could simply trade their Trizec Canada stock. And as long as the buyers were willing to buy both companies and live with the two-company structure through 2007, the deal could go forward. The Brookfield/Blackstone joint venture is buying Trizec Properties and Brookfield alone will buy Trizec Canada.

Another perceived obstacle: The Trizec portfolio couldn't easily be chopped up and sold off in pieces due to another tax rule related to Trizec's efforts to get permanent REIT status. For companies operating in the U.S. such as Trizec that had converted from a "C corporation" (which pays corporate taxes) to a REIT (which doesn't pay corporate taxes if it distributes its earnings to shareholders) there is a 10-year span during which its original assets can't be sold off for cash without paying steep taxes, according to Gil Menna, an attorney with Goodwin Procter who advised Brookfield.

Trizec wouldn't have been attractive to buyers if the new owners couldn't sell off weak properties. Blackstone often buys a portfolio in bulk, adds leverage, and then sells some buildings to investors in local markets. But Trizec Properties overcame that obstacle with the way it acquired 13 properties from Los Angeles-based Arden Realty Inc. as part of General Electric Co.'s $3.2 billion acquisition of Arden.

Trizec structured that purchase as a "reverse 1031 exchange," which refers to a part of the federal tax code. In a typical 1031 exchange, a property seller defers capital-gains taxes by putting the proceeds from a sale into a new property within 180 days. In a "reverse" 1031 exchange, the buyers identify the properties they will buy before they have sold any others, but still get the tax deferral.

By acquiring the Arden properties in this manner, Trizec freed itself to sell a number of properties that weren't in its core markets -- without taking a corporate tax hit, says Mr. Menna, who spoke about the transaction at a recent REIT conference. What was planned as a move to help Trizec's balance sheet also proved useful in the acquisition deal. It allows the buyers to sell some of the properties without tax worries.

J.P. Morgan and Morgan Stanley acted as financial advisers to Trizec Properties. Bear, Stearns & Co. and Merrill Lynch were among Brookfield's advisers.
Write to Jennifer S. Forsyth at jennifer.forsyth@wsj.com1

2006-07-17T16:06:00.000-04:00

Jones Lang LaSalle
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."

2006-07-17T16:04:00.000-04:00

Jones Lang LaSalle
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, 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.

2006-07-17T16:03:00.000-04:00

Jones Lang LaSalle

BUILDING HOPE FOR AILING TIMES
By JANET WHITMAN

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.

2006-07-17T16:01:00.000-04:00

Jones Lang LaSalle
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.

Copyright © 2006 ALM Properties, Inc. All rights reserved. Reproduction in whole or in part without permission is prohibited.

2006-07-17T15:59:00.000-04:00

Jones Lang LaSalle

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.

2006-07-17T12:35:00.000-04:00

Jones Lang LaSalle
Pfizer cutting back on manufacturing operations (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.

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

2006-07-17T12:31:00.000-04:00

Jones Lang LaSalle
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.

2006-06-21T09:37:00.000-04:00

Jones Lang LaSalle

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

2006-06-21T09:36:00.001-04:00

Jones Lang LaSalle

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

2006-06-21T09:36:00.000-04:00

Jones Lang LaSalle

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

2006-06-21T09:35:00.002-04:00

Jones Lang LaSalle

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."

2006-06-21T09:35:00.001-04:00

Jones Lang LaSalle

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.

2006-06-21T09:35:00.000-04:00

Jones Lang LaSalle

BUILDING HOPE FOR AILING TIMES

By JANET WHITMAN

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.

2006-06-21T09:34:00.000-04:00

Jones Lang LaSalle

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.

Copyright © 2006 ALM Properties, Inc. All rights reserved. Reproduction in whole or in part without permission is prohibited.

2006-06-21T09:33:00.001-04:00

Jones Lang LaSalle

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.

2006-06-21T09:33:00.000-04:00

Jones Lang LaSalle

Pfizer cutting back on manufacturing operations

(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.

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

2006-06-21T09:32:00.000-04:00

Jones Lang LaSalle

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.

2006-06-20T09:53:00.000-04:00

Jones Lang LaSalle

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.

© 2006 The Jersey Journal
© 2006 NJ.com All Rights Reserved.

2006-06-20T09:52:00.000-04:00

Jones Lang LaSalle

N.J. adds pharma jobs in '05

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.

On the Net: http://www.hinj.org

2006-06-20T09:50:00.001-04:00

Jones Lang LaSalle

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.

2006-06-20T09:50:00.000-04:00

Jones Lang LaSalle

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.

2006-06-20T09:48:00.000-04:00

Jones Lang LaSalle

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."

2006-06-20T09:47:00.000-04:00

Jones Lang LaSalle

WTC GRADE FOR MOODY'S
By STEVE CUOZZO

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

2006-06-20T09:46:00.001-04:00

Jones Lang LaSalle

N.J. SURPRISE AT TIMES SQ.
By STEVE CUOZZO

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

2006-06-20T09:46:00.000-04:00

Jones Lang LaSalle

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.

Copyright © 2006 ALM Properties, Inc. All rights reserved. Reproduction in whole or in part without permission is prohibited.

2006-06-20T09:45:00.001-04:00

Jones Lang LaSalle

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.

-- Shira Ovide

© 2006 The Times of Trenton
© 2006 NJ.com All Rights Reserved.

2006-06-20T09:45:00.000-04:00

Jones Lang LaSalle

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

2006-06-20T09:43:00.000-04:00

Jones Lang LaSalle

Grubb's Linda Tresslar
By John Salustri

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.

Copyright © 2006 ALM Properties, Inc. All rights reserved. Reproduction in whole or in part without permission is prohibited.

2006-06-20T09:42:00.000-04:00

Jones Lang LaSalle

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."

Copyright © 2006 ALM Properties, Inc. All rights reserved. Reproduction in whole or in part without permission is prohibited.

2006-06-20T09:41:00.001-04:00

Jones Lang LaSalle

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.

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

2006-06-20T09:41:00.000-04:00

Jones Lang LaSalle

Journal Square towers closer to reality

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.

2006-06-20T09:39:00.002-04:00

Jones Lang LaSalle

A Lesson Learned From a Legend
By ALISON GREGOR

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."

2006-06-20T09:39:00.001-04:00

Jones Lang LaSalle

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.

Copyright © 2006 ALM Properties, Inc. All rights reserved. Reproduction in whole or in part without permission is prohibited.

2006-06-20T09:39:00.000-04:00

Jones Lang LaSalle

NBA Renews 199,000 SF of Leases
By Eric Peterson

SECAUCUS, NJ-The National Basketball Association has renewed its leases totaling more than 199,000 sf at two Hartz Mountain Industries-owned properties here. The buildings are within Hartz’s 175-acre Harmon Meadow mixed-use development. The renewals mark the 16th year the NBA has been a Hartz tenant.

"Lease renewals, especially ones like the NBA, are indicative not only of the location but are becoming a sign of a tightening market as the state’s economy remains strong," says Emanuel Stern, Hartz president and chief operating officer. "New activity in the Northern New Jersey marketplace has been moderately strong, and as a result of improving occupancy, existing tenants are left with few local options."

The NBA, which has its headquarters across the river in Manhattan, uses the buildings for several of the league’s media, entertainment, promotional division and related operations. The renewals involve a full-building lease of 109,281 sf at 450 Harmon Meadow Blvd, and 89,832 sf at 100 Plaza Dr. The latter is a 264,000-sf, four-story building built in 1981. Terms of the re-signings were not released; the 100 Plaza Dr. building, which is more than 95% leased, has its available space listed with rates "upon request" for a five-year term.

The two buildings occupied by the NBA are part of a mixed-use community that has more than 3.5 million sf of office space, 1,200 hotel rooms and two retail centers. The retail component in particular has been bolstered in recent years by the addition of several big-box chains, namely Wal-Mart, Sam’s Club, PetSmart, Marshall’s and Linens ’n Things. Eateries Chili’s and Chipotle Mexican Grill are slated to join the 75-tenant roster later this year.

Copyright © 2006 ALM Properties, Inc. All rights reserved. Reproduction in whole or in part without permission is prohibited.

2006-06-20T09:38:00.000-04:00

Jones Lang LaSalle

Viewpointe is Relocating from Houston
By Eric Peterson

PARSIPPANY, NJ-Viewpointe Archive Services Inc. has signed a lease for 12,886 sf at 6 Campus Dr., and will move its operations and administrative groups here from Houston. Besides its Houston headquarters, the check and document imaging company has other operations based in New York City and Charlotte, NC.

Viewpointe was represented by SVP Richard Danesi and VP Brian Godau of CB Richard Ellis, Saddle Brook, NJ. Mack-Cali Realty Corp., owner of the building, was represented in-house by Jane Greenblatt. Terms of the signing weren’t disclosed, however, space currently available in the building is listed on Mack-Cali’s website with an asking price of $23 to $24 per sf.

"This is a dramatic headquarters relocation," Godau says. "We were able to negotiate a favorable incentives package including a BEIP grant to attract Viewpointe to the New Jersey market."

Six Campus Dr. is a 148,000-sf class A office building within the 15-building, two million-sf Mack-Cali Business Campus here. Viewpointe, meanwhile, provides check image processing and related services. Among its clients are BancorpSouth, Bank of America, First Horizon, HSBC, JPMorgan Chase, SunTrust Bank, US Bancorp and Wells Fargo, to name a few.

Copyright © 2006 ALM Properties, Inc. All rights reserved. Reproduction in whole or in part without permission is prohibited.

2006-06-20T09:37:00.001-04:00

Jones Lang LaSalle

Hotel occupancy: Going up?
By KARA L. RICHARDSON
Staff Writer

Some neighbors and a would-be competitor of two hotels proposed for Route 22 in Bridgewater have suggested that there isn't even enough demand for existing hotels.

Hampton Inn and Hilton Homewood Suites don't have to prove need, however, to win approval. And if they did, occupancy rates at hotels in the Bridgewater area are indeed on the rise.

So far in 2006, the occupancy rate is 55 percent for 10 hotels in the "Bridgewater area" as defined by Smith Travel Research, a Tennessee-based research company. The rate was 50.4 in 2002.

Although rising, the rates are below state and national hotel-occupancy averages of 57.2 and 61.3 percent, respectively, according to Smith Travel Research.

Lawrence Powers, an attorney for Briad LLC, said the Livingston-based developer is betting on future Route 22 construction to fuel the growth in occupancy rates.

"It's a travel hub," said Powers. "My clients think it's only going to get that much better."

The hotels would be built in the Greymark office complex on Route 22 East by Adamsville Road, near an existing Days Inn. The company needs Board of Adjustment permission to build four-story hotels on property zoned for two-story structures and to build hotels on land zoned for commercial office space.

Briad likes the site because it is within five miles of major traffic arteries -- I-287, I-78 and Routes 202-206 and 28 -- Powers said. Route 22 itself handles about 100,000 vehicles daily, according to Somerset County, with multimillion-dollar safety, beautification and capacity improvements planned.

Powers also said the Village at Bridgewater Commons mall -- a $40-million lifestyle shopping center with a Crate & Barrel and Maggiano's Italian Restaurant -- is a sign that the market is improving.

"The needs of high-end travelers are underserved for this area," Powers said.

Powers said that when George Bruck, a partner with Bridgemark LLC, which owns the property, travels to Bridgewater for the Tuesday night hearings on the application, he can't get a room at the Bridgewater Marriott.

"Yes, we do well on Tuesdays and Wednesdays," said Bridgewater Marriott general manager Chris Hosmer, "but we struggle to fill the hotels on the weekends."

Hosmer sees the market a little differently, saying there aren't enough activities and attractions, such as festivals and museums, to increase Bridgewater hotel occupancy rates, including those for weekends.

"There are no new demand generators that are coming into the market," Hosmer said. "If you don't have additional demand and you increase the supply (of hotels), that 57 percent (average occupancy rate) is going to erode to a much smaller number," Hosmer said.

Steven Belmonte, a Randolph-based hotel industry consultant at Hospitality Solutions, said occupancy rates can be misleading because many hotels catering to business travelers are empty on the weekends.

There are more than 30 hotels in Somerset County, with a total of more than 4,100 rooms and an average room rate of $110 per night, county officials have said. Recent additions include three Marriott hotels and the $30 million Sierra Suites hotel on Route 22 in Branchburg.

"Typically we have seven years of feast, seven years of famine," Belmonte said about the hotel industry. "However, the most recent hotel boom -- I have to confess is unlike anything I've seen in my 30-year career."

Bridgewater Board of Adjustment Chairman George Harlan confirmed that land-use laws do not require an applicant to prove a market need for its business.

Applicants instead must demonstrate, for instance, that exceptional conditions of the property require a certain building design or that the proposed use is especially suited to the property. Ultimately, applicants must show that relief can be granted without substantially impairing the intent and purpose of the township's Land Use Ordinance.

Still, the topic of demand has surfaced at Board of Adjustment hearings nonetheless.

A manager at Holiday Inn Express in Branchburg questioned the need for more hotels, saying that his hotel has not reached 50-percent occupancy since it opened in 2005. Smith Travel Research says the hotel has averaged 41.6 percent occupancy.

Bridgewater-area hotels in the Smith Travel Research occupancy-rate study are:

Hyatt Summerfield Suites in Bridgewater
Bridgewater Marriott
Hilton Garden Inn Bridgewater
Days Inn Bridgewater
Red Bull Motor Inn in Bridgewater
Super 8 Motel in Raritan Borough
Sierra Suites in Branchburg
Holiday Inn Express in Branchburg
Pine Motel in Branchburg (now closed)
Red Mill Inn in Branchburg
The Board of Adjustment hearings on the proposal will resume at 7:30 p.m. Tuesday in the Bridgewater Township municipal courtroom, at 505 Route 202-206.

Kara L. Richardson can be reached at (908)707-3186 or krichard@c-n.com.
from the Courier News website www.c-n.com

2006-06-20T09:37:00.000-04:00

Jones Lang LaSalle

Enpirion Inc.

A Bridgewater, N.J.-based provider of integrated power solutions, has raised $18 million in Series C funding, according to a regulatory filing. BA Venture Partners was joined by return backers like Canaan Partners, Columbia Capital and RRE Ventures.

www.enpirion.com
Enpirion Inc.
685 Route 202/206
Suite 305
Bridgewater, NJ 08807
USA
Phone: 1.908.575.7550

2006-06-20T09:35:00.000-04:00

Jones Lang LaSalle

LaSalle Americas Professionals

In a room crowded with over 1500 members and guests, the Economic Club of Chicago hosted Ben Bernanke as its featured lunchtime speaker today.

Miles White, the Club's presiding Chairman, introduced Dr. Ben with an amusing emphasis on his intellect that was then on display for the next hour.

It turns out that Ben placed out of first grade, scored a 1590 on the SATs and taught himself Calculus because he couldn't wait to take the high school course.

Our new Fed Chairman then delivered a very thorough and precise lecture on the role that rising energy prices are playing in the global economy. Among the key points:

1) Unlike previous price shocks in 1974 and 1991…the futures markets appear to be telling us that energy price rises this time are likely to be much more permanent.

Oil: Supply and demand dynamics suggest that refining capacity constraints, geopolitics and hurricane disruptions all are hitting the supply side, just as global demand continues to rise due to a strong, growing global economy. Natural Gas: Much the same story, but with better ability to rely on domestic or North American supplies.

Over the longer term, we should expect more capacity to come back on line, but demand will not fall.

Result: Prepare for longer-term impact of higher prices, but expect that the US economy will adjust over the long term.

Example: US consumers will be changing their patterns of housing and auto consumption in the years ahead to save on energy costs.

2) Fed reaction to rising energy prices will be to make sure that the first round (direct) effects don't lead to more long-lasting second-round (indirect) price-push inflation.

This is what happened in the seventies, with the Fed was forced to raise interest rates dramatically to squeeze out the second round effects, when businesses and labor all began to try to pass along higher energy costs by raising prices for all kinds of goods, services and wages. And inflationary expectations, once started, became very difficult to get out of the national psyche.

3) The key message, as in several of the Chairman's recent speeches, was to establish his credentials as an inflation-hawk. The cost to the American economy of higher energy costs is high ($50 billion in 04, $70 billion in 05 and on pace for $100 billion in 06). But, as an economist, Dr. Ben reminded the audience that the US economy is highly resilient and will be able to adapt. In a Ten Trillion dollar economy, these costs can be absorbed, although he did acknowledge that the Federal Reserve would expect that consumer demand would bear the brunt of this energy tax. Businesses have more options to find substitutes and to become more efficient users of energy.

The more interesting part of the Luncheon came after this somewhat pedantic Energy Speech, when the Chairman responded to a series of pre-planned questions, but this time with unscripted answers.

Q. Relation between interest rates and energy prices?

A. No need for higher short or long-term i-rates, if the Fed is seen to be credible in stopping second round effects from creeping into the economy.

Q. What can be done about the Current Account (Trade) Deficit (CAD)?

A. Domestic Savings needs to rise, as does Foreign Consumption and Investment. At 6.5% of GDP….the CAD is high, but manageable.

Gradual stable reduction would be best. Exchange Rate flexibility in Asia (read China) would help also.

Ben has re-phrased his famous "global savings glut" ideas of years past in more politically correct language, but the message is the same.

We also heard the recitation of the productivity stats that have helped the US economy over the last ten years.

Political Backlash to stop trade would absolutely NOT be the way to improve the CAD.
Q. What about the Federal Deficit?

A. Relative to GDP today (2.6%), we are OK, by historic (2.2%) or by global standards.
The problem is that the big three entitlements (Social security, Medicare and Medicaid) are driving the future growth of the deficit.

Today they are 8% of GDP. By 2040, they will grow to 16% of GDP.

Tax revenues in 2005 were 18% of GDP…which shows that something's gotta give.

He implied strongly that the spending side would be the place for public policy to focus its efforts, not the taxation side.

Best

Q. Does Washington understand Economics?

A. Congress may choose not to at times. But the FOMC and the Federal Reserve System has plenty of well-trained economists.

Their job is to keep Congress well-advised and well-informed. And they are doing exactly that!
Q. Cubs or Sox?

A. Whoever is in town.

So what?

Our new Fed Chairman has come to Chicago twice now for important speeches. Clearly Chicago still ranks as venue worth visiting (a relief given our lackluster office market in recent years).
Ben was wearing his inflation hawk feathers today…getting us all ready for 25 bps in June and again August.

I found the most interesting aspect of his speech, though, his fundamental world-view: Namely that the US economy is highly resilient.

Workers move to where the work is. Our economy takes better advantage of technology than other economies, which have access to the same technology.

Our capital markets finance new ways to adapt the technology faster than other economies (clearly thinking of Google, yahoo, face book, etc)

His reference to US consumers adapting to higher energy prices in the years ahead through their housing and transportation decisions is clearly an intriguing idea, from a real estate perspective. And sitting here in the AON Center staring out my window and row upon row of new high rise residential buildings…the evidence may already be in front of us.

Alan Greenspan, in his frequent speeches before the Economics Club, was also highly scripted…but also more humorous and less professorial.

Ben is a much clearer communicator, but needs help with some style points. But, Chairman Bernanke clearly knows his numbers, his economics and I believe is going to make a very credible inflation fighter, which, after all is the main job of the Chairmanship.

Jacques Gordon
Global Investment Strategist

2006-06-20T09:34:00.000-04:00

Jones Lang LaSalle

TIAA-CREF Names Leasing, Property Management & Construction Manager for Boston Office Tower

TIAA-CREF chose Spaulding & Slye, a member of the Jones Lang LaSalle group, as the exclusive leasing and property management agent for Boston's 730,000-square-foot 99 High St. Spaulding & Slye Construction was selected as an on-call construction manager for the first-class office tower, which is located at the corner of High and Congress streets in the city's Financial District and overlooks the Central Artery and Rose Kennedy Greenway. The 32-story building offers panoramic views of Boston Harbor and features superior state-of-the-art systems, abundant in-building parking, flexible 25,000-square-foot floor plates and new retail at street level.

2006-06-16T10:31:00.000-04:00

Jones Lang LaSalle

J.H. Cohn, Mintz Rosenfeld to Merge
NJBIZ Staff, Martin C. Daks
6/14/2006

J.H. Cohn today announced it signed a letter of intent to merge with Fairfield-based Mintz Rosenfeld & Co. The two CPA firms, which will have a combined workforce of some 750 people, will operate under the Cohn monicker. The transaction is expected to close at the end of the month. When it does, Mintz will shutter its Fairfield and New York City offices. J.H. Cohn is based in Roseland.

2006-06-16T10:30:00.001-04:00

Jones Lang LaSalle

Work Starts for 1M-SF Industrial Complex
By Eric Peterson

PERTH AMBOY, NJ-Work is just under way on a 615,000-sf industrial building, the first of two buildings making up the Morris Cos.’ Amboy Corporate Center here. The Rutherford, NJ-based Morris Cos., specialists in big-box industrial, is doing the first building on a speculative basis.
Morris has also hired Newmark Knight Frank to find users for the new asset. For NKF, principals William J. Cariste, Daniel Frankel and Doug Bansbach of the firm’s New Jersey office are handling the assignment.

"It is one of the first in a generation of major industrial projects on large redevelopment sites north of Exit 11 of the New Jersey Turnpike," says Cariste, who’s in NKF’s Woodbridge, NJ office. He notes that the project should also benefit from growth in overseas import activity, predicted when expansion of port facilities and dredging in Newark and Elizabeth are completed. "Our port facilities in Newark and Elizabeth handle some of the country’s largest volumes, but less than 55% of building inventory north of Exit 11 consists of truly modern distribution buildings."

The project is also part of the state’s portfields initiative, a joint effort by the New Jersey EDA and the Port Authority of NY/NJ aimed at identifying development redevelopment sites near the state’s ports. As reported by GlobeSt.com, the program identified 17 sites in five counties, with the Morris Cos.’ project’s site among those 17. Among other things, the program is aimed at making those identified sites, mostly brownfields and otherwise underutilized, "shovel ready," through a streamlined regulatory process.

Morris bought the 70-acre site in mid-2005 from Chevron, which had operated an asphalt refinery there. The sale price of the site was not disclosed, and after the deal closed Morris announced general plans for a 600,000-sf building with an estimated price tag of $72 million, targeting high-tech, distribution and light manufacturing users. Cost of the full build-out has not been released, but is believed to be in the $130-million range. Morris officials say they expect the second building, which would total 517,000 sf, to be under construction within the next 12 months.

The City of Perth Amboy had a hand in putting the deal together, agreeing in 2005 to give Morris a piece of property attached to the site in exchange for Chevron agreeing to donate an acre of land to the city for a new firehouse. The city has also expanded its urban enterprise zone designation to Morris’ site, which is adjacent to Chevron’s redeveloped 26-acre West Yard tract.

Copyright © 2006 ALM Properties, Inc. All rights reserved. Reproduction in whole or in part without permission is prohibited.

2006-06-16T10:30:00.000-04:00

Jones Lang LaSalle

Builder let go in Devils arena flap
Team's owner cites a breakdown in contract talks on final price for Newark project
Thursday, June 15, 2006
BY GEORGE E. JORDAN AND MATTHEW FUTTERMAN
Star-Ledger Staff

The Devils have dismissed the management company supervising construction of its arena in downtown Newark, the team's owner and city officials said last night.

The Devils parted ways 11 days ago with BovisHunt, a leading builder of professional sports venues, after they failed to negotiate a final price tag for the 18,000-seat arena.

"We did not agree with the monetary issues," said Devils owner Jeff Vanderbeek, who insists work on the arena's steel frame continues ahead of schedule to open in time for the 2007 hockey season next October.

New Jersey's oldest construction company, Wm. Blanchard Co., is temporarily running the site, and a new a construction supervisor should be hired next month, Vanderbeek said.
"What's important is we're working to keep this project on schedule," he said.

The departure of BovisHunt highlights long-running concerns about the final cost of the arena, projected to run $310 million. It also represents the first major construction flap to spill into public since Newark handed the Devils control of the project in December 2004.

"There is something really not right about this," said Rod Taylor, managing director of Breitstone & Co., a major Long Island construction adviser with work in New Jersey. He said contract negotiations with BovisHunt should have been completed before the arena's steel frame began rising in late winter.

"It can happen, but most of the time it would have happened before they were on the job site," Taylor said of the breakdown in the final contract negotiations. "You would have to think it would have been worked out."

BovisHunt, which built Busch Stadium in St. Louis and the Arizona Cardinals' new football stadium, was selected two years ago from a field of five companies that submitted bids to Newark to oversee construction.

A spokesman for BovisHunt could not be reached last night. The company is an alliance formed two years ago between construction giants Hunt Construction Group and Bovis Lend Lease.

Under an agreement between the city and hockey team, taxpayers will provide $210 million of the construction costs and the franchise will pay the rest. In exchange, the Devils get to keep most of the ticket and concession revenue.

Mayor-elect Cory Booker has said he fears the final cost of the arena could run much higher, and suggested he may try to pull the plug on the project.

"What does it mean? It means this is a poorly conceived project, an unnecessarily rushed project," Booker said last night. "A project that is not the best use of land and city resources."
Vanderbeek, a former Wall Street executive, declined comment on Booker's threat.

Richard Monteihl, Newark's business administrator and executive director of the nonprofit group overseeing redevelopment around the arena, said the city has spent at least $80 million on the arena so far, and the balance of the $210 million in public funding is committed.

"The arena is under contract, and based on those contracts people have invested huge amounts of money. It would be inadvisable to damage the project," he said. "It would leave the city with substantial legal exposure because everyone entered into these contracts in good faith."

BovisHunt was hired under a short-term contract as "temporary" construction manager to get the project underway, while final price negotiations continued, Vanderbeek said.

"It's not like we're switching construction managers mid-stream," Vanderbeek said.

The Devils are looking for a "guaranteed-maximum price" contract, an all-inclusive construction deal popular with the sponsors of public and private developments to hold the line on cost overruns. The final price is based on underground soil analysis, design features and engineering schematics.

Manhattan lawyer Barry LePatner, a corporate construction adviser, said many construction managers would likely bid to complete the arena, a trophy project, and replacing BovisHunt would not cause construction delays.

"It is certain ownership will find a replacement to get up to speed and proceed with its schedule for completion of the project," he said.

George E. Jordan and Matthew Futterman may be reached at (973) 392-4141. Jeffery C. Mays and Ian Shearn contributed to this report.

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

2006-06-16T10:29:00.000-04:00

Jones Lang LaSalle

All eyes are on Newark's new apartments
Thursday, June 15, 2006

BY JEFFERY C. MAYS The Lefcourt Building has long been a prominent fixture of Newark's skyline, but after falling on hard times, it lay vacant for 20 years.

More than 300 ironworkers, carpenters, laborers and electricians just completed a renovation, transforming the 35-story office building into 317 market-rate apartments. The $110 million makeover marks the first unsubsidized rental units downtown since the Colonnade Apartments were built in 1960.

Arthur Stern, chief executive of Cogswell Realty, the project's developer, said both his company and the city have much riding on the restoration of 1180 Raymond Blvd.

"This is the building that will be a catalyst for everyone else," Stern, wearing a white construction hat, said during a recent tour of the project. "It was an eyesore on the Newark skyline. This time next year, 500 people will be living downtown. This is what Newark needs."
For all the talk about Newark being the next Jersey City or Hobo ken, there still aren't enough people living downtown. In a city of 280,000, there are only 619 households -- slightly more than 1,700 people -- in the census tract that contains 1180 Raymond Blvd.

Despite the success of the New Jersey Performing Arts Center and the development of an arena for the Devils hockey team, residential projects have been slow to develop in downtown Newark. NJPAC re cently announced plans for a residential tower, but most of the construction over the past few years has been two- and three-family homes built on vacant lots.

Newark was second in the state last year with 2,064 residential building permits issued, compared with Jersey City's 3,194, but only 168 of Newark's permits were for structures with five or more units, according to city records. Jersey City, meanwhile, issued 2,329 permits for buildings with five or more units. The value of Newark's permits for five or more units was $3.9 million, while the value of Jersey City's permits in that category was $209 million.

BOOM OR BUST

Still, commercial real estate ex perts say if 1180 Raymond Blvd. succeeds, it could jump-start a downtown residential building boom in the state's largest city. Conversely, if the 317 apartments don't fill fairly quickly, residential developers could be scared away for years to come.

"Developers look at other projects, and so do banks and investors," said Carl Dranoff of Dranoff Properties, which has completed major housing development projects in Philadelphia and along the Camden waterfront. "A success (with 1180 Raymond Blvd.) cer tainly would be a great benchmark for future projects. A sluggish project could discourage future investment and would have a pretty immediate impact on financial institutions."

A couple of downtown market- rate residential projects are already on the drawing board, including a controversial Mulberry Street project that would see 2,000 condominiums rise near the federal courthouse over the next several years. A few blocks away from 1180 Ray mond Blvd. are two other Cogswell restoration projects, the Hahne & Co. Building and the Griffith Building.

With ongoing concerns about suburban sprawl and growing interest from city officials in expanding Newark's population, the tim ing might be right for a boom in rental housing downtown, said Stephanie Bush-Baskette, director of the Joseph C. Cornwall Center for Metropolitan Studies at Rutgers University-Newark.

"For the last several years, it's been about people living in the city and wanting a nice place to live and the convenience of mass transit," she said. City dwellers "want to walk to cultural events. Many people who work in Newark can afford it. This may be an option instead of getting on the train."

The Lefcourt Building, also known as the Raymond Commerce Building, was designed by prolific Newark architect Frank Grad and completed in 1929. A New York developer named Abraham Lefcourt intended to use the building, but went bankrupt in the stock market crash of 1929, according to historic preservation consultant Ulana Za kalak.

The tan Art Deco building is an important part of Newark's Four Corners historic district and is noted for its "distinctive and ex traordinary ornamental work," including terra cotta panels and metal ornamentation along the five-story base, said Glen Leiner, executive director of the Art Deco Society of New York.

Cogswell Realty acquired the building in 1999 from the Helmsley Group. Stern at first sought to re make the building into student housing, but those plans failed. Cogswell then spent a year on redesign plans and the next four trying to finance the project. The city of Newark was the only major entity that lent support, providing some financial commitments.

"The typical response from lenders was, 'That's a great project. We wish you the best of luck. Call us on the second one,'" Stern said.

ITS OWN MONEY

While waiting for financing, Cogswell used $18 million of its own capital to start construction. "Our feeling was if we don't start this thing, no one will believe it was happening," Stern said.
The gamble paid off. Cogswell eventually secured seven different sources of financing, including the use of historic tax credits and funding from the Prudential Foundation and Amelior Foundation. The Newark City Council also approved the city's first-ever incremental tax package, which provided a longer tax-abatement period and allowed the city to serve as a conduit for bonds to aid the project.

"It was a labor of love," Stern said of the quest for financing and the restoration of the building.
The historic character of the building has been maintained down to refurbishing the marble and molding in the lobby. The apartments, however, are filled with modern amenities such as granite countertops, hardwood floors and a washer and dryer in each unit. Some apartments have ter races and views of the New York City skyline.

Other amenities include a doorman, available maid service and grocery shopping service. To deal with the lack of parking in the area, valet parking will be available. But the feature Stern is most proud of is a full-size, four-lane AMF bowling alley.

"Everyone who signs a lease gets a free pair of bowling shoes," Stern said. "The reason we put all these amenities here is to give people alternatives while the rest of the city fills out."

Anticipating some student tenants, the building is designed so apartments can be shared. But Stern is hoping to attract lawyers and workers from Prudential who now leave the city after dark. The apartments, including studios and one- and two-bedroom units, range from $1,395 to $2,215 per month.

Kevin Ledig, 29, a law school student, and his wife, Pamela Juárez, 25, a dental student, were the first tenants to sign a lease in January. About 60 others have signed leases since, Stern said.
"You can still see the Empire State building and we love the fact that you are two blocks from Penn Station," Ledig said. "We want to be a part of what's happening in Newark, and this building has a lot to do with it."

© 2006 The Times of Trenton
© 2006 NJ.com All Rights Reserved.

2006-06-16T10:28:00.000-04:00

Jones Lang LaSalle

Senate Pulls Back Xanadu-Related Bill
By Eric Peterson

TRENTON-The State Senate’s transportation committee was expected to consider a bill (S-1790), on Monday that would funnel 60% of the sales taxes generated by the Meadowlands Xanadu shopping and entertainment complex in East Rutherford to Bergen County. The bill never made the agenda. According to a source with knowledge of the proceedings, S-1790 was pulled back "because of a lack of support." Future action on the bill is uncertain at this time.

Specifically, the estimated proceeds of $17 million a year would go to pay for road improvements along Route 3 from Lyndhurst to Secaucus, and Route 17 from Ridgewood to its intersection with Route 3. If passed, the legislation would set up a special account that would be administered by the New Jersey Meadowlands Commission, a state agency. Prime sponsors of the bill are senators Paul Sarlo (D-Bergen) and Joseph Coniglio (D-Bergen).

Outside of the State Senate, the proposed legislation has already drawn plenty of opposition. "The bill is constructed on the false premise that Xanadu, if it ever opens, will create new sales tax revenue," says Walter Smith EVP of the Secaucus-based Hartz Mountain Industries. Hartz officials have been constant critics of the Mills Corp. and Mack-Cali Realty Xanadu project. The firm has sued the developers over the project.

"There is no growth in buying power or discretionary income in New Jersey based on Xanadu," Smith says. "It just cannibalizes sales at existing malls and neighborhood retail stores. So this tax will then cannibalize a [state] budget that is already insufficient to maintain needed programs."

2006-06-16T10:27:00.000-04:00

Jones Lang LaSalle

Covance to get $187M from contract extension

(AP) — Covance Inc., which tests drugs for potential commercial use, said Wednesday that it has extended a contract worth at least $187 million over the next seven years.

The Princeton, N.J.-based company said the contract is the largest in its history and secures toxicology space for an undisclosed client from 2007 to 2013. It will add about $150 million to its second-quarter backlog.

David Windley with Jefferies Research Department cited the new contract in a client note and reaffirmed a "buy" rating and a $64 target price on the stock.

Shares of Covance rose as much as 4.3% to $59.19 in morning trading.

"We continue to be impressed by Covance's ability to attract and secure dedicated agreements for toxicology capacity in a time when little capacity exists." wrote Mr. Windley.

He noted the new contract is "non-cancellable," meaning the client is committed to pay Covance $187 million whether the space is used or not.

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

2006-06-16T10:20:00.000-04:00

Jones Lang LaSalle

Warnaco shares up on takeover speculation
by David Jones

Shares of Warnaco Group Inc. rose sharply on Wednesday following a news report saying the intimate-apparel and swimwear maker could be an acquisition target of retailer Phillips-Van Heusen Corp.

Women's Wear Daily, citing unnamed sources, said there have been talks about combining Warnaco, which owns the Calvin Klein business and the license for Calvin Klein jeans with Phillips-Van Heusen, which owns the rest of the Calvin Klein business.

Phillips-Van Heusen Chief Executive Emanuel Chirico reportedly said that there were two criteria for an acquisition: a very strong brand that has great consumer recognition or an extension of an existing product category such as a complimentary retail operation or additional licensing venues.

Shares of Warnaco rose as much as 10.3% to $19.29 and were up 6.4% in the afternoon, while Phillips shares were gained as much as 5.6% at $36.28.

Phillips-Van Heusen and Warnaco, officials each said they do not "comment on rumor and speculation."

Warnaco, the maker of Speedo, Nautica and other lines, acquired long-term Calvin Klein licenses in Europe and Asia for $284 million in cash in December to help boost its profits, which have declined more than 40% in the last two consecutive quarters.

©2006 Crain Communications Inc.

2006-06-16T10:19:00.000-04:00

Jones Lang LaSalle

Liberty Bonds approved for three WTC towers
by Catherine Tymkiw

The Liberty Development Corp. gave preliminary approval for $1.67 billion in Liberty Bonds to help build three of the five towers at Ground Zero.

The City is expected to give preliminary approval for an additional $921 million in Liberty Bonds for the towers next month.

"We expect that this [approval] will not only help leaseholder Larry Silverstein finalize the balance of his financing, but will facilitate the expenditure of funds at the World Trade Center site and accelerate real progress of construction," said Empire State Development Corp. Chairman Charles Gargano in a statement.

The site’s owner, The Port Authority of New York and New Jersey, and Mr. Silverstein originally entered into a 99-year ground lease for the site in the summer of 2001, shortly before the destruction of the original World Trade Center. A revised ground lease is in the process of being negotiated.

The two sides butted heads earlier this year over who would have control over rebuilding efforts. Gov. George Pataki had made the release of the bonds contingent upon an agreement between the Port Authority and Mr. Silverstein.

They came to an agreement in April, with Mr. Silverstein giving up development of the Freedom Tower in exchange for these three towers. Port Authority agreed to occupy space in one of the towers and to secure leases for 1 million square feet at the Freedom Tower.

Construction of Towers Two, Three and Four, which will comprise 6.2 million square feet of space, is slated to start later this year. The whole project is estimated to cost $4.38 billion.
©2006 Crain Communications Inc.

2006-06-16T10:17:00.000-04:00

Jones Lang LaSalle

Redesigning Rutgers

Rutgers University’s on-again, off-again plans to overhaul the College Avenue campus may be on again.

Bank of America is scheduled to present a "major grant" to the state university this morning to help fund a redesign of the heart of the New Brunswick campus, school officials said. Rutgers President Richard McCormick will accept a check at an 11:15 a.m. press conference in Winants Hall.

McCormick first suggested a campus makeover last year. Early plans included closing College Avenue to traffic and creating a mile-long pedestrian greenway from the Raritan River to the New Brunswick train station.

Last fall, Rutgers kicked off an international design competition. Five design firms were given $50,000 to come up with a new look for the 69-acre campus in downtown New Brunswick. The plans were to include a new academic building, new dorms and a new transportation hub.

But McCormick abruptly postponed the competition in April, just a few days before the five finalists were due to unveil their proposals at a campus ceremony. The president said it would be "inappropriate and insensitive" to go ahead with the redesign competition while Rutgers and the rest of the state’s colleges were facing nearly $169 million in proposed state budget cuts.
"Right now, the university community and I are preoccupied with the budget," McCormick said at the time, promising to restart the competition in the fall.

The Bank of America donation will be the first large gift for the redesign project.

Once a winning design is chosen, the campus overhaul is expected to be broken up into three phases, each with a $100 million price tag. Rutgers expects to pay for the new construction, landscaping and other changes through a combination of state borrowing, state transportation funds and private donations.

2006-06-16T10:16:00.000-04:00

Jones Lang LaSalle

Merck Offers Bayer its Stake in Schering

Merck offers Bayer its stake in Schering Successful acquisition of Schering by Bayer now much more likely / Wenning: "All three companies concerned will benefit from this step" / Suit filed against Merck to be withdrawn

LEVERKUSEN, Germany, June 14, 2006 - Bayer AG is to acquire all the shares of Schering held by Merck. In the course of joint talks, Bayer and Merck have agreed on the need to end the uncertainty regarding the Berlin company’s future to avoid damaging. Merck has therefore decided to sell its 21.8 percent (according to SEC) stake to Bayer, clearing the way for Bayer’s acquisition of Schering. The purchase price is EUR 89 per share.

All other Schering stockholders who have tendered their shares under the public takeover offer, or who decide to do so before the acceptance period expires at midnight CEST on Wednesday, will benefit from this price, which is EUR 3 above the original offer.

"We’re very pleased about Merck’s decision, because a lengthy competitive bidding process would have greatly affected Schering’s future," said Bayer Management Board Chairman Werner Wenning. "All three companies concerned will benefit from this step. We are very optimistic that we can now secure at least the three-quarters of Schering’s capital stock that we were aiming for, enabling us to quickly begin the integration process. Today we have taken a major step toward creating a world-class German pharmaceutical company."

The future company "Bayer Schering Pharma" will strengthen Germany’s role as a pharmaceutical industry location. This is in the interests of the entire sector. Bayer and Merck therefore agreed during their talks to look into further possible opportunities for cooperation between the two companies. Bayer will withdraw the suit filed against Merck in New York on Tuesday.

2006-06-14T12:18:00.000-04:00

Jones Lang LaSalle

Madison group to air Exxon site concerns
Florham Pk. plan to add hotel, housing may hurt environment, leaders say
BY NAVID IQBAL
DAILY RECORD

MADISON -- Leaders of Madison Matters, a civic group, aren't too worried about the New York Jets' decision to move to neighboring Florham Park.

They are concerned, however, about the talk of an adjacent 500 units of housing, a hotel conference center and resulting traffic at the 400-plus-acre Exxon Mobil Corp. property, and they've called a meeting for tonight to get borough officials to keep an eye on such developments.

David Arthur of Madison Matters said the Jets' impact on the area in an environmental sense will most likely be "negligible," but added that "There are a lot more environmental issues than the Jets."

"It's hotel conference center, 500 age-restricted housing units. What are they going to do with the existing structures? How will people get in and out? Those are the sorts of things that we want to make sure Florham Park understands," Arthur said.

Tonight's meeting, at 7:45 at the Madison Community House, 5 Cook Ave., is open to the public, and expected to attract a sizable crowd. Madison Mayor Woody Kerkeslager, Councilwoman Astri Baillie and Councilman Donald Bowen are expected to attend.

Madison Matters was instrumental in mounting a challenge to Florham Park when it rezoned the Exxon site to allow 2 million square feet of office and hotel space in 2002. Madison, Chatham and Chatham Township sued Florham Park over traffic and environmental issues, especially in relation to a concrete paving which may have prevented rainfall from replenishing an aquifer.

A Superior Court decision in 2004 established conditions for redeveloping the Exxon site. Redevelopment would be governed by state standards for water management and would require Florham Park to conduct a regional traffic study, according to the settlement.

Arthur hopes the meeting will push Madison lawmakers to press for, among other things, a traffic study.

"We need to empower our representative to be on top of this," Arthur said.
Florham Park Mayor Frank D. Tinari was not available for comment Tuesday.

2006-06-14T12:17:00.000-04:00

Jones Lang LaSalle

Ricoh Begins Consolidation
Martin C. Daks
NJBIZ Staff
6/13/2006

Five years after Ricoh acquired Lanier, and three months after the West Caldwell company said there were no plans to consolidate brands, Ricoh announced it has started to consolidate the back-office operations of Ricoh U.S. and Lanier Worldwide "in anticipation of a future consolidation of those entities."

A company spokesman says, however, that the individual brands will be maintained, while the new business unit will continue to be known as Ricoh U.S. Current Lanier CEO Nori Goto was named CEO. and Tom Salierno, Ricoh U.S. president, was appointed chief operating officer of the new business unit. The company, a supplier of office-automation equipment and electronics, says Ricoh will continue to be headquartered in West Caldwell. The Ricoh U.S. business unit will maintain locations in West Caldwell and Atlanta.

2006-06-14T12:16:00.000-04:00

Jones Lang LaSalle

TIMES TOWER FILLING UP
By LOIS WEISS

June 14, 2006 -- THE New York Times Building at 620 Eighth Ave. is on a roll and close to landing another big name law firm to its roster.

Covington & Burling is reviewing a lease for about 160,000 feet on floors 39 through 43.
Sources said the 20-year pact will include options for floors 44 and 45.

Studley Chairman Mitch Steir, with David Goldstein, is leading a gaggle of brokers representing Covington & Burling, which would relocate from 1330 Sixth Ave.

A CB Richard Ellis team lead by Tri-State CEO Mary Ann Tighe and Howard Fiddle are representing developer Forest City Ratner.

None of the players would comment on the deal.

Last week, Forest City said it would buy out its partner, ING, for the 700,000 feet above the Times headquarters.

Forest City will then control floors 29 through 52 and the 24,000 feet of ground floor retail.
The law firm Seyfarth Shaw has already grabbed 100,000 feet on floors 31, 32 and 33 for the next 17 years.

2006-06-14T12:15:00.000-04:00

Jones Lang LaSalle

Will Merger of Buchanan Ingersoll and Klett Rooney Trigger Other Firm Mergers?
By Gina Passarella
The Legal Intelligencer
06-14-2006

Buchanan Ingersoll and Klett Rooney Lieber & Schorling have become one after a shareholder vote at both firms Tuesday morning gave the merger the go-ahead.

The new firm, Buchanan Ingersoll & Rooney, will become the largest law firm in Pennsylvania -- in terms of number of attorneys in the state -- with roughly 313 lawyers according to the last survey conducted by PaLaw. As a whole, the firm will have more than 525 attorneys nationwide.

Leaders of the new firm anticipate that it will be in the top 80 of national firms with an estimated combined gross revenue of $265 million.

The deal is effective July 1, and will give Klett Rooney president and managing shareholder John A. Barbour one of three executive shareholder roles at the new firm.

Buchanan Ingersoll chairman Thomas L. VanKirk was recently re-elected to another three-year term, which will last through 2009.

"This is the largest combination our firm has ever done, and it was an obvious match for us in terms of culture, practice area and the continued development of our strategic plan," VanKirk said in a statement. "Strengthening our mid-Atlantic presence better enables us to continue to pursue our goal of being a strong national firm operating as one unified entity."

VanKirk said in an interview that he is looking to build upon the strength of the combined firm in the Philadelphia market, possibly by bringing on groups in intellectual property or adding to other practice areas such as labor. The firm would still look to expand in either its core competencies or core geographic areas, he said, such as on the West Coast or in Miami or in the labor practice area.

Howard Scher, Buchanan Ingersoll's Philadelphia office managing partner, said the office already has a number of groups in the pipeline, and VanKirk told him to start building immediately.
Four labor attorneys that were against the merger did leave Klett Rooney for Cozen O'Connor, Stephen A. Cozen confirmed Tuesday.

The group was said by some sources to be against the merger between Klett Rooney and Buchanan Ingersoll, and their departure dispelled most concerns that the shareholders would voice opposition to the combination of the two firms.

Buchanan Ingersoll and Klett Rooney had been talking for the past few months. Barbour said he and VanKirk have been friends for years, and the merger discussions started out of that friendship.

"I've known Tom VanKirk, Fran Muracca and Buchanan Ingersoll for many years, so it was easy to see how we could create a strong partnership out of our two firms," Barbour said in a statement. "The geography fit. Our clients fit. The practices fit. This was one of those rare decisions in life that almost makes itself."

In total, approximately 250 Klett Rooney attorneys, government affairs professionals and staff members will join Buchanan Ingersoll.

Scher said staff redundancies would not be an issue with this merger.

"We are right-sized in both offices," he said of the Philadelphia offices. "There will not be a reduction in staff."

VanKirk said that Klett Rooney ran a "lean ship" and had administrative strengths in areas were Buchanan Ingersoll had needs.

There had been some question about how the shareholders of Klett Rooney, which has one tier, would fit into the three-tiered shareholder structure of Buchanan Ingersoll.

Alfred J. D'Angelo Jr., one of the labor partners who was on board with the merger from the beginning, said that the transition went smoothly. He said about 90 to 95 percent of the shareholders realized where they should fit in, and only about six went back and forth in discussions.

Klett Rooney has a national client base and serves companies such as Chubb Insurance, UPMC Health Systems, The Pittsburgh Steelers, Reliant Energy and Verizon.

Klett Rooney bankruptcy shareholder William H. Schorling said the combined firm will have one of the largest creditors' rights and financial institutions practice in the mid-Atlantic region. He said there would not be a major lender in that region that is not represented by the combined firm in a "major" way.

Both sides said they were surprised at the lack of conflicts they faced. Scher said most of the clients he spoke with said they had already used Klett Rooney for other legal needs. He said the firms are "accomplishing convergence with clients."

VanKirk said there are a few conflicts that still need to be ironed out, but Barbour said there is more overlap than conflict.

The firm's new logo, "Buchanan Ingersoll & Rooney: Attorneys & Government Relations Professionals," shows the emphasis the combined firm is placing on its lobbying business. The firm said that it now has one of the largest government relations practices of any law firm in Pennsylvania with 35 attorneys and professionals.

The new firm will now have an energy law sub-specialty with the addition of Klett Rooney's John Quain who is the former chairman of the Pennsylvania Public Utility Commission.
Daniel E. Beren, head of Buchanan Ingersoll's state government relations group in the Harrisburg office said the Klett Rooney government relations specialists have a strong Pennsylvania practice with a focus in Harrisburg and some in Pittsburgh.
"It'll be one of those situations where one plus one will make four," Beren said of the combination.

Beren will take on more of an emeritus role while Klett Rooney's Thomas G. Paese will lead the firm's government relations group.

Michael Coleman of Coleman Legal Search said the merger is an opportunity for Buchanan to continue on the growth track it has been on after a "comeback year" last year.

Klett Rooney's labor and employment group was its "crown jewel," particularly in the Philadelphia area, Coleman said, adding that the firm also has a strong bankruptcy practice with Schorling and Teresa K.D. Currier.

"People knew the labor and employment group from the time they were at Pepper [Hamilton], but the firm didn't have a high level of identity in the [Philadelphia] community," Coleman said.
Klett Rooney was at a difficult size with 130 attorneys and needed to do something, Coleman said, pointing out that this merger will increase awareness of the firm in Philadelphia.

The firm's labor and employment and bankruptcy groups are a complement to Buchanan Ingersoll's litigation and business groups in Philadelphia, Coleman said.

The merger changes the landscape of the Pittsburgh legal community, moving the firm in the top three in the city behind only Kirkpatrick & Lockhart Nicholson Graham and Reed Smith.
The merger "will point more to the Pittsburgh legal community as being a force nationally," recruiter Maura McAnney of McAnney Esposito & Kraybill Associates in Pittsburgh said. "I think it's exciting for the Pittsburgh legal community to have a firm that was able to strengthen itself on a national basis."

The intra-city merger was one that hasn't been done in at least the last 20 years in Pittsburgh, but VanKirk said the merger fit into both firms' goals.

"We set out in 1986 to be the dominant firm in Pennsylvania," VanKirk said, adding that Buchanan Ingersoll became important but not necessarily dominant. "This [merger] gives us the opportunity to be dominant in Pennsylvania and the mid-Atlantic region."

With a strong financial basis in the region, VanKirk said the firm could achieve its national goals.
Schorling pointed out that while both firms began in Pittsburgh, the majority of each firm's governing body is not in that city.

Barbour said the firm would also be dominant in Harrisburg with 34 lawyers. The firm will have 20 attorneys in Wilmington, Del., and more than 30 in New Jersey.

VanKirk said that he does not expect the merger to have the same effect on the firm's financial indicators as some of the double-digit increases it saw in 2005, but said that he thinks the revenue per lawyer (RPL) and profits per equity partner (PPP) numbers will increase.
VanKirk said the effect of this merger probably would not be financially visible until 2007 to as late as 2009.

The two firms' PPP were "remarkably similar," VanKirk said. Barbour said that Klett Rooney shareholders would see an increase in both RPL and PPP.

"We wouldn't have done the deal had we not been confident of that," he said.

Buchanan Ingersoll's PPP for 2005 was $455,000 and its RPL was $505,000.

The discrepancy in the starting salary between the two firms, with Buchanan Ingersoll at $125,000 in Philadelphia and Klett Rooney at $115,000, was resolved in favor of Buchanan Ingersoll's number, the firm leaders said.

Schorling said he believes the merger might set off similar ones in the Philadelphia or Pennsylvania market.

"I think it will have a significant competitive impact," Schorling said. "It will make life more difficult for other firms."

Leaders of the new firm said they have a few things to iron out before the July 1 close date. The issue of space was left on the table until after the shareholder votes. Scher said, however, that his office has plenty of space to house the Klett Rooney attorneys in Philadelphia. VanKirk said that as the Philadelphia office grows, more space might be needed.

The leases for some of Klett Rooney's offices in the state will end soon, and further decisions can be made then, firm leaders said.

The issue of who will head various practice areas has not been fully decided on yet, but labor and employment attorney Anthony J. Messina will co-head the firm's Philadelphia office with Scher.
It was rumored that Messina was on the fence about whether to stick with the combined firm post-merger, but D'Angelo said that was never the case.

2006-06-14T12:14:00.001-04:00

Jones Lang LaSalle

Riker Danzig Opens London Office to Gain Edge in Insurance Business
Charles Toutant
New Jersey Law Journal
06-14-2006

A Morristown, N.J., firm is hopping the pond in hopes of improving its foothold in London's insurance and reinsurance industries.

Riker, Danzig, Scherer, Hyland & Perretti becomes the first major New Jersey firm to open in London, setting up shop in the city's financial district where the largest carriers have offices.
The 158-lawyer firm has leased space for a half-dozen lawyers but at the outset will have only two: a British solicitor and a New Jersey associate. One or two more are expected by the summer's end.

Riker Danzig hopes to build on an existing base of insurance clients and to start a commercial litigation and banking practice in London as well, says firm co-chairman Shawn Kelly, who heads the 40-lawyer insurance practice.

He says the firm has 300 open cases for British insurance clients, with policy limits at issue totaling over $100 million.

The longtime client most responsible for the London opening is Castlewoods EU Ltd., which together with its subsidiaries makes up 80 percent of Riker Danzig's London insurance business.
"They came to me six or seven months ago and said, if you come to London, we will keep you busy," Kelly says. With that commitment, Riker Danzig has decided that the venture -- contemplated for a few years -- is now worth the investment, he says.

Castlewoods acquires and manages financially distressed U.S. and British insurance companies that have stopped writing new policies, mostly because of excess liabilities for asbestos or other environmental problems, and ekes out a profit by managing claims.

The company is in the midst of a restructuring that will provide more capital and permit an ambitious expansion, Kelly says. On May 24, Castlewoods announced a merger with The Enstar Group of Montgomery, Ala., and will become part of a new Bermuda-based subsidiary, Enstar Group Ltd.

Riker Danzig also does work for RiverStone Insurance Co., Highlands Ins. Co. and Mutual Marine Office Ins. Co. and hopes to add others.

The resident partner in the London office is Castlewoods' former general counsel, Eleni Iacovides, a solicitor of the Supreme Court of England and Wales. Kelly says that when the London office was on the drawing board, Iacovides seemed like a natural fit and so he asked Castlewoods officials if he could approach her. They agreed. "I think they understood she wanted to work at a law firm again," he says. "They've been very supportive."

Although phones and computers were being connected Tuesday at the new office in London's banking district, located at 33 Cornhill, within walking distance of London Bridge, Iacovides has been on the job for several weeks, Kelly says.

Joining Iacovides as a resident associate is Helen Franzese of the Morristown main office. An Irish citizen, Franzese expects to become a British solicitor by the end of the summer.
Kelly and fellow partners Gerald Liloia and Brian O'Donnell will work on London matters from Morristown.

Kelly's confidence about Castlewoods' support stems from his friendships with company executives, who have lodged him in their homes when he visits London. He says English lawyers socialize more with clients than do their American counterparts and expect to have regular face-to-face contact.

"In Morristown, at the end of the day, lawyers get in the car and go home," Kelly said. "It's different in London. You spend a lot more time with British clients at dinner, at lunch, entertaining. If you're in the office at 5, you'll go to the pub afterwards and have a glass of beer."
Though Kelly says he's mindful that other U.S. firms have tried and failed to make a go of a London insurance practice, he says the firm has good odds of success because of the promise of steady Castlewoods work and to its bevy of local contacts.

Riker Danzig has been telling its U.S. clients about its London office, and has seen particular interest in the new venture among banking clients, says Kelly. He adds that the firm also hopes to get work from British companies with U.S. operations that need advice in areas such as real estate or taxation, he says.

The firm was set to hold a reception in London today to celebrate the opening of the new office, and representatives of about 40 insurance companies were expected to attend.
Riker, Danzig also has offices in New York and Trenton, N.J.

2006-06-14T12:14:00.000-04:00

Jones Lang LaSalle

JV Proposes 550,000-SF W/D Complex
By Eric Peterson

JERSEY CITY-Rockefeller Group Development and partner MC Realty are proposing to build a warehouse/distribution complex of upwards of 550,000 sf on a 40-acre site along this city’s border with the town of Secaucus. The site, acquired earlier this year by the two companies, is near the new Exit 15X of the New Jersey Turnpike and the Frank Lautenberg Train Station.
"New Jersey represents significant potential for growth in the industrial real estate market because of its proximity to major highways, ports and metropolitan areas," says Les Smith, EVP of development for the New York City-based RGDC. "RGDC and MC Realty intend to pursue joint ventures for other potential real estate development projects in the future."

The 40-acre site is unusual in that it is one of just a handful of undeveloped sites left in the Meadowlands market. The project, which will have foreign-trade zone status with that application process under way, is mapped out for either a single building of 525,000 sf, or two buildings totaling nearly 550,000 sf. Under the latter scenario, one building would be in the 400,000-sf range, the other approximately 145,000 sf. The partners are pursuing a build-to-suit opportunity for either lease or purchase, according to Smith.

"We are committed to investing in the development of quality industrial complexes in major US markets," says MC Realty president Hiroshi Matsumoto. "Given RGDC’s expertise and success in developing FTZs, we feel our joint venture will enhance that success." The Los Angeles-based MC Realty is a wholly owned subsidiary of Mitsubishi Corp., formed in 1994 to manage that company’s real estate investments. Mitsubishi Corp. is not related to Mitsubishi Estate Co. Ltd., parent company of the Rockefeller Group.

Copyright © 2006 ALM Properties, Inc. All rights reserved. Reproduction in whole or in part without permission is prohibited.

2006-06-14T12:13:00.000-04:00

Jones Lang LaSalle

In Major Projects, Agreeing Not to Disagree
By TERRY PRISTIN

To blunt opposition to its proposed Atlantic Yards project in Brooklyn, Forest City Ratner promised to make half of the rental units affordable for low- and moderate-income families.
To gain neighbors' support for its new cancer care center, Yale-New Haven Hospital agreed to create an outreach program for children with asthma.

And to smooth the way for its Gateway Center retail project, which will replace the Bronx Terminal Market, the Related Companies pledged to bar Wal-Mart as a tenant.

In New York and around the country, it has become standard practice for developers of major projects to negotiate with neighborhood and other groups to forge so-called community benefits agreements — contracts that almost always contain wage and hiring goals and may also include a grab bag of concessions, like a day care center, a new park, free tickets to sports events and cash outlays to be administered by the groups themselves.

In New York, in contrast with many other jurisdictions, the city itself is not a party to these agreements. Theoretically, at least, the pacts are not supposed to play a role in the city's zoning review process.

Since 2001, when a comprehensive community benefits agreement was struck for a hotel-and-entertainment project now being developed in Los Angeles next to the Staples Center sports arena, the trend has quickly spread to other cities, including Denver, Milwaukee, Chicago and Washington. Advocates of C.B.A.'s, as they are known, see them as an outgrowth of the Smart Growth movement — the idea that development decisions should address a broad range of social and economic issues like transportation, jobs and housing.

In New York, however, some critics are wondering if this trend is threatening to distort the planning process. They say the danger is that local groups will agree not to oppose the projects in exchange for favors that may be unrelated to the project's impact on the neighborhood.

Critics of the Atlantic Yards (whose developer is a partner to The New York Times Company in its new headquarters building on Eighth Avenue) and other agreements have questioned whether the groups signing the document really speak for the community. "Groups pop up and you're not sure who they represent," said Patricia A. Jones, the co-chairwoman of the Manhattan Community Board 9 task force on Columbia University's expansion in Manhattanville. Ms. Jones contends that development plans ought to be reviewed by community boards, which are currently excluded from the C.B.A. process, before the benefits are meted out. "They can look at the bigger picture," she said.

Ross F. Moskowitz, a real estate partner at the law firm Stroock & Stroock & Lavan, said developers would like the procedures to be clearer and more predictable. "The danger of a C.B.A. is that it is outside the process," he said. "There are no guidelines, no controls. The transparency is not there. You just don't know what you're walking into."

In California, leaders of the community benefits movement say New York's agreements lack the protections that are standard elsewhere. "In the C.B.A.'s we work on," said Julian Gross, the legal director of the California Partnership for Working Families, an advocacy group that has negotiated a number of agreements, "the city is closely involved in the negotiations. There's no point in the community group and the developer negotiating a lot of stuff that the city doesn't want."

Outside New York, benefit agreements are usually incorporated into the developer's agreement with the city, adding another layer of enforcement.

The local redevelopment agency was "intimately involved" in the C.B.A. that J. H. Snyder, a Los Angeles developer, negotiated for NoHo Commons, a 1.5-million-square-foot mixed-use project centered on a subway stop in North Hollywood, said Clifford Goldstein, a senior partner. "It's a very open process," said Mr. Goldstein, who is currently working on another C.B.A. for a project in South Los Angeles.

Carl Weisbrod, the president of Trinity Real Estate in New York, said that the government should be involved in any agreement that pertained to a subsidized project to ensure that "the services and the organizations that are being given money to provide the services are fully in keeping with government priorities."

There are signs that Mayor Michael R. Bloomberg's administration is rethinking its position on community benefits agreements. A year ago, it was the mayor himself who trumpeted the Atlantic Yards agreement between Forest City Ratner and eight community groups.

But in April, the mayor reacted angrily to the suggestion that the Mets would negotiate a C.B.A. for its new ballpark. "Every development project in this city is not going to be a horn of plenty for everybody else that wants to grab something," the mayor said. And while the Mets agreed after heated discussions with council members from Queens to contribute $50 million over 20 years to local community groups, no C.B.A. was signed.

The mayor's office declined requests for interviews with city officials, saying it was premature to discuss the administration's plans for C.B.A.'s.

Several land-use specialists said the debate over community benefits agreements was a throwback to the 1980's, when local groups in New York often leveraged their support for development projects to get libraries, parks and other amenities. Critics at that time also said it was unfair for a community's chance to get a park to hinge on its ability to attract a deep-pocketed developer, said Margaret P. Stix, a land-use lawyer.

In an influential 1988 report, the New York City Bar Association said that some politicians had approved projects solely to get unrelated benefits, thereby corrupting the zoning process. The lawyers' group recommended that any amenities promised by a developer have a reasonable relationship to the project, a practice that successive administrations adopted, said Jesse Masyr, the lawyer who negotiated the Bronx Terminal Market agreement.

In the 1990's, Mr. Masyr said, the Giuliani administration barred his client, the Blumenfeld Development Group, from providing a park to appease opponents of East River Plaza, a shopping center now under construction in East Harlem. They reasoned that testimony from people who had received a benefit unrelated to the project could taint the zoning review process, he said.

But the current administration has taken a more hands-off approach, Mr. Masyr said. "I'll tell you what I think is the most dicey part of this: there's cash involved, money payments to be made. Who monitors it?" he said. "This is about as unregulated a world as you could imagine."
In California, leaders of the community benefits movement that are party to an agreement never accept money from the developer, said Madeline Janis-Aparicio, the executive director of the Los Angeles Alliance for a New Economy, a nonprofit research group. "No donations of any kind," she said. She also said it took six months to a year to pull together a coalition before negotiations could begin. "You can't skip steps," she said.

Melinda R. Katz, chairwoman of the City Council's land use committee, said that New York officials were examining how other cities handled community benefits agreements. "We can probably learn a lot from other jurisdictions," she said. "And we're in the process of doing that."

2006-06-14T12:12:00.000-04:00

Jones Lang LaSalle

State jobless rate dips to 5 percent
Wednesday, June 14, 2006

BY TOM JOHNSON The state's jobless rate declined to 5 percent last month, but continued to run above the nation's 4.6 percent unemployment rate despite the creation of 6,900 jobs in New Jersey, the biggest jump in eight months.

The increase in jobs reflects a fairly strong labor market, economists said, as it marked the fourth consecutive month where the number of jobs increased.

"The labor market is getting a little bit better each month," said Joel Naroff, chief economist for Commerce Bank. "The state's economy is in good shape, but it's not in great shape."

In April, the state's unemployment rate surged to 5.1 percent, a huge jump from the 4.5 percent rate in March. It pushed the New Jersey rate higher than the national rate for the first time in nearly three years.

The April jump caused some economists to wonder whether it was a statistical anomaly, given that 6,200 jobs were added in the month. "The state's unemployment numbers have a tendency to bound around a lot," Naroff said.

According to the state Department of Labor and Workforce, the number of unemployed New Jerseyans dropped to 223,000 in May from 231,3000 in April, based on survey of households. The state said 4.1 million others held jobs in May.

State officials said the increase in jobs -- the largest rise since 8,100 jobs were added between last August and September -- reflects optimism in the economic outlook.

"Four straight months of job gains and record high employment levels are good signs for our economy and reflect confidence by businesses in Gov. Corzine's approach to the budget and economic growth," said acting Commissioner David Socolow.

Economists weren't quite as en thusiastic.

"It's a mixed bag," said Jack Worrall, a professor of economics at Rutgers University in Camden, not ing in some areas the labor market is strong, such as North Jersey and parts of South Jersey, while the Jersey Shore is a bit sluggish.

Most of the job gains occurred in the private sector with the trades, transportation and utilities accounting for the majority of the increase, with 4,300 jobs, while the education and health-service sec tors added 3,200 jobs. In the high- paying professional, business services and financial sectors, gains were more modest, with only 600 jobs added among the three sec tors.

On the negative side, manufacturing continued its long-term decline, with jobs falling by 900 to a level of 320,100. Public sector employment fell, too, by 800 jobs, reflecting a drop in the number of federal and local government jobs.

© 2006 The Times of Trenton
© 2006 NJ.com All Rights Reserved.

2006-06-14T12:11:00.000-04:00

Jones Lang LaSalle

Kushner Portfolio Could Fetch $2B
By Eric Peterson

FLORHAM PARK, NJ-Kushner Cos. may be on the verge of pulling the trigger on one of the biggest real estate deals ever in New Jersey. According to published reports, the company is mulling the sale of its Westminster Management division, which consists of some 17,500 rental apartments in 90 properties in several states, and the final number could be in the $2-billion range.

"There have been offers received for the Westminster apartment portfolio of the Kushner Cos., consisting of 17,500 garden apartment units," Clive Cummis, the company’s acting vice-chairman confirms for GlobeSt.com. "They started a process whereby Goldman Sachs has been engaged to advise the company with respect to these offers."

Sources say that process began with four unsolicited offers, including two from REITs and one from a banking institution. Cummis will only confirm that the number of offers is "in that area," and declined further comment on the nature of the bidders.

Cummis does confirm that the bids amount to approximately 40% of Kushner Cos.’ total holdings. Not included are several major development projects currently under way, including residential condo and mixed-use properties in Perth Amboy, Asbury Park and Atlantic City, plus New York City and Port Jervis, NY. Kushner also owns and/or manages some five million sf of office, industrial and retail space, similarly not part of the offers.

Asked about deciding factors on whether the company will sell its rental portfolio, and to whom, "price," Cummis tells GlobeSt.com. Cummis, an attorney, is part of a management team including fellow attorney and acting chairman Alan Hammer, put in place to run Kushner Cos. in 2004 when founder and chairman Charles Kushner was indicted on charges of witness tampering relating to federal campaign-finance and tax violations. Kushner is currently completing a two-year jail sentence at a halfway house in Newark and is slated to return to the company in September. Company officials say they have not discussed the bids with Kushner and would not until his sentence is completed. For previous articles on the issue, click here.
By then, a deal might already be done. Asked about a possible timeline, "no decision has been made and the offers are being considered," Cummis tells GlobeSt.com. "A decision would probably be made within the next 30 to 45 days."

Copyright © 2006 ALM Properties, Inc. All rights reserved. Reproduction in whole or in part without permission

2006-06-14T12:10:00.001-04:00

Jones Lang LaSalle

PTC, CV In Potential $345M Cardiovascular Agreement
By Karen Pihl-Carey
Senior Staff Writer

Less than three months after signing its first major preclinical deal focused on infectious disease, PTC Therapeutics Inc. topped it with a new cardiovascular collaboration worth up to $345 million with CV Therapeutics Inc.

South Plainfield, N.J.-based PTC will apply its Gene Expression Modulation by Small-Molecules (GEMS) technology to develop orally bioavailable small molecules. Together, the companies will select five targets, including those known to raise HDL and be involved in dyslipidemia and diabetes.

"The technology can be applied virtually to any therapeutic area," said Claudia Hirawat, the company's senior vice president of corporate development. "This is our first effort into addressing a therapeutic area where we don't have internal expertise."

While the main focus of the collaboration will be on cardiovascular indications, PTC does have the freedom to "dabble into other areas," she said.

CV Therapeutics, of Palo Alto, Calif., will pay PTC $10 million up front, consisting of $2 million in cash and two loans of $8 million total. One loan is forgivable as long as the research remains in effect, and the other loan is convertible into PTC equity.

If CV Therapeutics chooses to take certain compounds into development, it has an exclusive option to gain worldwide, exclusive rights for each or several targets.

If exercised, PTC would receive royalties on worldwide net sales. Assuming all five targets are selected by CV Therapeutics, PTC could earn up to $335 million in milestone payments based on development, regulatory and commercial achievements. It also retains an option to co-fund research and development in return for increased royalties or co-promotion rights.

The licensing deal with CV Therapeutics is part of PTC's strategy to leverage its GEMS technology outside of its core research areas, which include genetic disorders, oncology and infectious diseases.

Late last year, the company licensed certain compounds from its anti-angiogenesis program to Bausch & Lomb, of Rochester, N.Y., for use in ophthalmology indications. That agreement is in line with the same strategy, although it is not a discovery collaboration like the one with CV Therapeutics. "We had already identified those compounds as part of our oncology screen," Hirawat said.

In March, PTC signed a deal potentially worth $200 million with Kenilworth, N.J.-based Schering-Plough Corp. focused on small-molecule candidates that inhibit the hepatitis C virus internal ribosome entry site (IRES)-mediated production of viral proteins. Schering is responsible for clinical development and worldwide commercialization. (See BioWorld Today, March 21, 2006.)

Internally, PTC is advancing PTC124 in three Phase II trials for genetic disorders, including Duchenne's muscular dystrophy and cystic fibrosis in cases in which a nonsense mutation is the cause of the diseases. The drug has orphan status for both indications.

Interim results of the cystic fibrosis trial, announced in April, suggested that PTC124 might have pharmacological activity that addresses the underlying cause of CF in patients with a nonsense mutation. Both the CF and DMD trials are expected to be completed in the second half of this year. The DMD nonsense mutation, which occurs in about 15 percent of the DMD cases, is found in the dystrophin gene. About 10 percent of the cystic fibrosis cases are caused by a nonsense mutation of the CF transmembrane regulator gene.

PTC also has its anti-angiogenic compound PTC299 - an oral inhibitor of vascular endothelial growth factor - in Phase I testing for cancer. Derived from the GEMS screening technology, it modulates gene expression by targeting the post-transcriptional control processes that act through the untranslated regions of messenger RNA molecules.

"In a matter of four years, we went from a concept to being in Phase I," Hirawat said, adding that a major advantage of the GEMS technology is its ability to address targets like IRES that researchers are "not able to tackle with traditional drug discovery."

"With GEMS," she told BioWorld Today, "you can actually either up-regulate or down-regulate protein expression using small-molecule drugs. As far as we know, there's no other way to do that."

John Bluth, CV Therapeutics' senior director of corporate communications, said his company's interest in the technology is its ability to "accelerate the arrival of treatments to the market."
Among CV Therapeutics' approved products are Ranexa (ranolazine) for chronic angina and Aceon (perindopril erbumine) for coronary artery disease or hypertension. It also is developing regadenoson in Phase III trials as a pharmacologic stress agent in myocardial perfusion imaging studies, and it is conducting a study under a special protocol assessment agreement with the FDA to gain approval of Ranexa as first-line chronic angina therapy.

The company went public in 1996. Its stock (NASDAQ:CVTX) fell 77 cents Monday to close at $14.16.

Founded in 1998, PTC raised $26.6 million in a private placement in November, bringing the total venture capital and grant money brought in since inception to $139 million. The money was expected to last the firm through early 2007.

In April, PTC filed for an initial public offering to raise $86.3 million.

Published June 13, 2006

2006-06-14T12:10:00.000-04:00

Jones Lang LaSalle

Senate Considers Xanadu Sales Tax Bill
By Eric Peterson

TRENTON-The State Senate’s transportation committee is slated today to consider a bill (S-1790) that would funnel 60% of the sales taxes generated by the Meadowlands Xanadu shopping and entertainment complex to Bergen County. The complex, under construction and scheduled to open by the end of 2007, is located in East Rutherford in Bergen County. It is being developed by Mills Corp. and Mack-Cali.

Specifically, the estimated proceeds of $17 million a year would go to pay for road improvements along Route 3 from Lyndhurst to Secaucus, and Route 17 from Ridgewood to its intersection with Route 3. If passed, the legislation would set up a special account that would be administered by the New Jersey Meadowlands Commission, a state agency.

"It is only fitting that some of the new revenue…that will be generated by [Xanadu] be set aside for these road projects in order to alleviate the negative impact which this state-approved major development will have," S-1790’s introduction reads. Prime sponsors of the bill are senators Paul Sarlo (D-Bergen) and Joseph Coniglio (D-Bergen).

Copyright © 2006 ALM Properties, Inc. All rights reserved. Reproduction in whole or in part without permission is prohibited.

2006-06-14T12:09:00.001-04:00

Jones Lang LaSalle

Holly Springs in Running For $350M Biopharmaceutical Plant, Up to 400 New Jobs

HOLLY SPRINGS, N.C. – Holly Springs is in the running to land a "major biopharmaceutical" firm that would spend as much as $350 million and create up to 400 jobs, according to a grant from the Golden Leaf Foundation. (An earlier version of this story incorrectly attributed the information to the town attorney for Holly Springs.)

To help land the company, which town officials would not identify, the Golden Leaf Foundation has awarded Holly Springs a grant of $800,000.

In announcing the grant Tuesday, the Foundation said the "economic catalyst grant" would be used for design fees "related to infrastructure improvements required" for the biopharma firm to locate in the town.

However, Town Attorney John Schifano declined to discuss specifics. The grant is "related to an ongoing economic recruitment project," Schifano said but added, "I don’t have any further details for the project."

Citing "competitive reasons", Schifano would not disclose the name of the company being recruited.

Holly Springs was among the possible sites considered for a new plant to be built by pharmaceutical giant Bristol-Myers Squibb. However, that company rejected North Carolina last week, instead picking a location in Massachusetts. That plant is expected to cost $1 billion and produce as many as 700 jobs.

Schifano said the Golden Leaf grant and the ongoing talks were not related to the Bristol-Myers Squibb negotiations.

Charles Hayes, president and chief executive officer of the Research Triangle Regional Partnership, confirmed that a company was in fact being recruited for Holly Springs. He said talks were "ongoing" but added, "We don’t comment on ongoing discussions."

At a Triangle business event two weeks ago, Hayes said industrial recruiters from state and local governments as well as other agencies were involved in negotiations for plant and business locations worth $5.2 billion that could generate 8,500 jobs.

North Carolina has made recruitment of biopharmaceutical firms a major priority in its industrial recruitment efforts. United Therapeutics recently chose to build a $50 million plant in Durham rather than Maryland. The facility will create 160 new jobs. Stiefel Laboratories announced last November that it would occupy a former Eli Lilly subsidiary facility in Research Triangle Park, creating some 200 jobs.

The Golden Leaf Foundation utilizes funds received from tobacco companies as part of the national tobacco suit settlement to help foster education and economic improvement projects across the state.

2006-06-14T12:09:00.000-04:00

Jones Lang LaSalle

Success Breeds Success in West L.A.

The California gold rush that began last year with the strengthening of our San Francisco and Los Angeles offices continues with the opening of a new location in West Los Angeles. The West L.A. office will house 22 professionals, including Markets teams led by Managing Directors Lisa St. John and Peter Best and Capital Markets groups led by Managing Directors Larry Krasner and Dave Doupe. The new office is located in the 2.2 million s.f. Century Plaza Towers owned by JPMorgan Chase, one of our largest institutional clients.

"West Los Angeles is one of the hottest real estate markets in California, with 54 million square feet," Lisa said. "Our firm has several institutional clients that either own or lease properties in the area, or do business there." Besides JPMorgan Chase, other major Jones Lang LaSalle clients in the neighborhood include Archon, Arden Realty and Beacon Capital.

The region is also a rich prospective environment for project management services, agency leasing and management assignments, and local tenant representation work. The new office forms a natural bridge with our downtown Los Angeles office because many clients and prospects are located in both areas.

"Our clients want us closer," said Lisa, "and it will definitely help to have people right on the ground in West L.A. to service accounts. This physical presence demonstrates our commitment and underscores our knowledge of that market."

"Opening this office is definitely in line with our firm’s strategic initiative to grow our footprint on the West Coast," added California Markets Operations Director Elizabeth Hearle. "In the last year we’ve raised ourselves to the number 3 firm in downtown Los Angeles, when before we weren’t even in the top tier. Now, that’s our goal for West L.A."

The address for the new office is 2049 Century Park East, Suite 2750, Los Angeles, CA 90067.
The phone number for the reception desk is +1 310 595 3660. The office's fax number is +1 310 595 3659.

2006-06-14T12:08:00.000-04:00

Jones Lang LaSalle

Cowen Sets IPO Size, Range
Monday June 12, 11:36 am ET
Cowen Sets IPO Size, Range; to Raise Up to $235 Million

WASHINGTON (AP) -- Cowen Group Inc., a New York-based investment bank that's a unit of French bank Societe Generale, set the parameters of its initial public offering Monday, saying it would seek to raise as much as $235 million.

Cowen said in a filing with the U.S. Securities and Exchange Commission that it plans to sell 11.2 million shares for $19 to $21 each.

The company has applied to list its stock on the Nasdaq Stock Market under the symbol "COWN." Underwriters haven't yet set a date for the offering.

Cowen's offering will likely be the second in its industry this year. San Francisco investment-banking boutique Thomas Weisel Partners Group Inc. went public in February, gaining 33 percent on its first day of trading. Three other IPOs in the sector are also expected at some time this year: Ryan Beck Holdings Inc. and Evercore Partners Inc. have already filed initial documents with the SEC, while Keefe Bruyette & Woods Inc. has plans for that, too.

Cowen Group originally filed in March for an IPO of up to $100 million in stock.

The IPO proceeds will flow to Societe Generale, which will completely divest itself of Cowen ownership if the IPO and a subsequent over-allotment of shares are fully sold.

Cowen plans to grant four of its top executive officers, together with 81 other senior employees, 2.1 million shares of restricted stock immediately after the offering. The restricted stock, worth $42 million, will represent 14 percent of the company. The company is also giving employees options to purchase 1.1 million shares, or 7.5 percent of its outstanding stock, with a grant value of $8.7 million.

Cowen's total revenue in the first quarter rose 29 percent to $105.6 million, and its net income nearly quadrupled to $36.5 million, compared with the same period in 2005.

Cowen, Credit Suisse Group and Merrill Lynch & Co. are the lead underwriters on the offering.

2006-06-14T12:07:00.001-04:00

Jones Lang LaSalle

Children’s Place Leases 245,000 SF
By Eric Peterson
(For more retail coverage, click GlobeSt.com/RETAIL and to read more on the industrial market, click here.)

SECAUCUS, NJ-The Children’s Place has signed a lease for 245,200 sf, representing the entire building at 2 Emerson Lane here. The asset is owned by the locally based Hartz Mountain Industries and is located within that company’s Harmon Cove warehouse district in the Meadowlands submarket.

For the Children’s Place, the signing marks a headquarters relocation, albeit a short one in terms of distance. The retailer will be moving its corporate offices, as well as related warehousing and distribution operations, to 2 Emerson Lane from the nearby 915 Secaucus Rd., another Hartz-owned property, where it currently occupies 183,000 sf. That relocation is expected to be completed by early 2007, according to a Hartz spokesman. Terms of the lease were not disclosed.

"Harmon Cove has been the location of our corporate office since 1999," says Steve Balasiano, senior vice president and chief administrative officer for the Children’s Place. "Our corporate headcount in Secaucus has grown from approximately 100 employees to more than 600 employees in that time to support the growth of the company. A larger facility is necessary to facilitate our continued growth and expansion."

The Children’s Place Retail Stores Inc. designs, contracts to manufacture and sells merchandise under the proprietary "the Children’s Place" and licensed "Disney Store" brands. The company currently owns and operates 811 the Children’s Place and 317 Disney stores in North America.

Meanwhile, leasing activity remains strong at Harmon Cove, Hartz Mountain’s 750-acre Harmon Cove mixed use development, according to Emanuel Stern, the company’s president and COO. "Surging interest in the New Jersey Turnpike’s Exit 15X continues to fuel the Meadowlands industrial and office market."

Stern says the opening of 15X has established a highly visible second point of entry into Harmon Cove, which is one of the factors contributing to the heavy leasing activity. "15X is a win-win situation with its location, the [Frank Lautenberg] rail station, access to Manhattan and the ports. Anytime there are industrial properties within a few miles of mass transit options, there will be tenants who will take advantage of the opportunity."

Copyright © 2006 ALM Properties, Inc. All rights reserved. Reproduction in whole or in part without permission is prohibited.

2006-06-14T12:07:00.000-04:00

Jones Lang LaSalle

BASF says it'll form global unit in Jersey
Top exec looks ahead after Engelhard merger
Tuesday, June 13, 2006
BY JOSEPH R. PERONE
Star-Ledger Staff

German chemical company BASF plans to form a global catalyst division in New Jersey as it di gests its $5.6 billion acquisition of Iselin-based Engelhard, BASF executives said.

The lo cation of the headquarters will be at a yet-to-be-determined site, and the company will maintain research and development labs in the state, said Klaus Peter Lobbe, chief executive of BASF in Florham Park, the North American unit of the world's largest chemical company. The labs and Engelhard's former headquarters are in Iselin.

Wayne Smith will become president of the new BASF division. It will be the first time BASF has formed a division for automotive catalysts that scrub engine exhaust to remove harmful pollutants, Lobbe said.

Since 2004, Smith had been group vice president for the company's North American intermediates business, which makes more than 600 chemicals used to produce detergent, plastics, textiles, paints, coatings, medicine and crop protectants. Smith was recruited two years ago from competitor W.R. Grace.

The Engelhard name disap peared from Wall Street yesterday as the company's stock was delisted by the New York Stock Ex change. Engelhard fought BASF's hostile takeover attempt for more than five months before agreeing to a merger two weeks ago.

Lobbe said the company will cut some duplicative headquarters jobs, but he declined to provide a precise number. Engelhard has 650 employees at headquarters in Iselin and at sites in Union and East Newark. BASF employs 1,500 workers at headquarters in Florham Park and locations in Belvidere and Washington in Warren County. BASF also is acquiring the construction chemicals business of De gussa, which has an operation in Mine Hill.

Lobbe, 60, has spent four decades with BASF. He gave his first interview since the merger Friday after he and former Engelhard Chief Executive Barry Perry spoke to nearly 700 Engelhard employees during a meeting in East Brunswick:

How did the employees react to what you told them? We have some enthusiasm and excitement in the Engelhard crowd. But now comes the hard work. We have to make it happen. It is rather easy to sign the check on this decision and make Engel hard management happy. The more critical part is to integrate the Engelhard employees. Will you cut some jobs? Yes, some jobs. But I can't give you a number. There will be some cost synergies. But why make people nervous at this point in time, when we don't know how many? Definitely, in the administrative-function areas like information technology, fi nance, human resources, legal, lo gistics, purchasing and procurement, we will have some syner gies.

What will you change? We will have an operating di vision in New Jersey that is responsible for catalysts worldwide. This shows the attractiveness and the importance of this business for the BASF group. We didn't have any division before. Previously, our catalyst business was part of the chemicals divi sion. During the next two or three months, we will learn more about both sides and then we will decide on where the headquarters will be. One thing is sure, part of the Iselin organization is the R&D facility, and that will not change. Can you understand the employees' reticence about BASF because of the hostile takeover? All in all, we appreciate that the process is over now. Believe me, we didn't like that it turned into a hostile takeover. We meant from the beginning that it could be done in an amicable way. At the end of the day, we came to a friendly solution for the employees and for the business.

What are the synergies between the two companies? To give you one example, Engelhard is very strong in the automotive catalyst business. They have close links to the car manufacturers. We had a little, tiny catalyst business worldwide. Now, we added a big piece from Engelhard. BASF has long-standing links to the car manufactur ers, as well. We have coatings, plastics and gasoline additives. How will your pigments business change? We have a pigment business that is directed to textiles and to automotive. What we get here is more into cosmetics and personal-care. We get stronger by combining our portfolios because we are the better choice for the customer. Do you have a succession plan for the day that you decide to retire? The only clear signal for me to retire is when the candles get more expensive than the cake.

Joseph R. Perone may be reached at jperone@starledger.com or (973) 392-4262.

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

2006-06-14T12:06:00.000-04:00

Jones Lang LaSalle

A Hard Shingle To Hang

The deal sweetener that would place Gibbons, Del Deo, Dolan, Griffinger & Vecchione's name atop a Newark skyscraper is getting a sour reaction from other law firms in the building. The tenants don't much care for being housed in a structure on which the name "Gibbons" looms large above the 30th floor - especially since they were never offered the same marquee billing.

2006-06-14T12:05:00.001-04:00

Jones Lang LaSalle

Sports Illustrated building puts up some solid scores
Veteran expanding at sidelined property; more frozen treats for Manhattan

Published on June 12, 2006

The 23-story tower at 135 W. 50th St., known as the Sports Illustrated building, is finally seeing action.

The property has been plagued by vacancies ever since the American Management Association's lease for 275,000 square feet expired in 2001. The 800,000-square-foot building remained half empty, with only four tenants, until late last year, when NBC leased all 28,500 square feet on the ninth floor.

Things have been looking up since then.

One of the few longtime tenants, accounting and consulting firm Weiser, has exercised an expansion provision. It will take an additional 28,000 square feet--the entire 14th floor--for a total of 90,000 square feet. Asking rents in the building, which is between Sixth and Seventh avenues, are $60 a square foot.

"Weiser's expansion tied into its existing lease that we restructured two years ago," says Arthur Draznin, an executive managing director at Newmark Knight Frank, which represented the tenant. The firm is building out the space and expects to take occupancy in the fall.

Less than 300,000 square feet--including one 154,000-square-foot space--remain vacant, according to Peter Turchin, a senior vice president at CB Richard Ellis.

"We have a number of deals that are pending," says Mr. Turchin, whose firm was hired as a co-agent several months ago by landlord Murray Hill Properties.

Other tenants include Time Inc., publisher of Sports Illustrated, which last year renewed its lease and expanded to a total of 240,000 square feet. Alliance Capital Management and accounting firm Berenson also have offices at 135 W. 50th St.

It was known as the American Management Association building until the group moved out in 1998. A year later, Time Warner leased 220,000 square feet and renamed the tower for its sports magazine.

Dr. Laszlo Tauber, a Hungarian-born surgeon and philanthropist, owned the building until his death in 2002. It was put on the market for $160 million the same year, and Norman Sturner of Murray Hill Properties bought it in 2004.
--Julie Satow

2006-06-14T12:05:00.000-04:00

Jones Lang LaSalle

Experts Uncover Brownfield Solutions
By Eric Peterson
(To read more on the industrial market, click here.)

SECAUCUS, NJ-A lot of the industrial development occurring in the US these days involves brownfields, something that's especially true in older, more mature markets. A panel of experts addressed that topic at the RealShare Industrial East conference here yesterday, an event attended by more than 300 real estate professionals from across the country.

And while the urban infill and brownfield development process is fraught with tough issues, "we are attracted to brownfield sites because of their location," Frank Petkunas, VP-regional development officer for IDI told attendees of the concurrent session. Most of those locations, of course, are in the middle of heavily populated regions with substantial W/D potential.

And beyond that, "we are also attracted to them because greenfield sites are rare," Petkunas said. "Brownfields are an alternative to diminishing greenfields."

And according to Petkunas, matters have improved regarding one of the nagging problems: "The liability issues have diminished. Also, people have gotten smarter." And as far as the underwriting process, "we look at the structure of the deal. The complexity of the contamination is important, especially relating to time."

John DiCola, a principal of KTR Capital Partners, a firm founded by former Keystone execs after the latter was acquired by ProLogis a few years back, concurred: "Uncertainty kills deals. There are so many complex issues. You need to figure out a credible remediation plan. It's about assessing real risk vs. perceived risk."

On the subject of environmental insurance, Michael Gill, New York regional manager for AIG, told attendees that "there are solutions" that might not have existed a few years ago. For any given deal, he explained that if it involves the sale of a piece of contaminated property to a developer, "we look at the motivations for the seller. We look at the type of due diligence. We look at the data relating to the contamination. We structure an insurance policy based on that--it comes down to the quality of the data."

That data generally comes from the consulting side, and Richard Burrow, a senior associate with Langan Engineering & Environmental Services, explained that, "different consultants give different advice, and the quality of the advice is important. Buyers [of brownfield sites] are being asked to give more and more data in less and less time."

"Time is money," interjected panel moderator Michael Stingone, a partner in the law firm of Winne Banta Hetherington Basralian & Kahn. "You have to shift the various pressures around to get things done."

Noting that any brownfields discussion by nature, including this one, tends to carry a negative tone to it, DiCola said, "ultimately, industrial development provides the remedy for these sites. Brownfield development should be part of the solution for these sites."

"It sounds negative, because we're talking about lessons we've learned," Stingone commented. "We've developed the expertise and the tools to look at the more complicated issues."

And ultimately, Petkunas concluded, "coordination is the key to the whole thing," a reference to the teaming of such diverse participants as sellers, developers, consultants, attorneys, governmental bodies and contractors in any given project. RealShare Industrial East is produced by Real Estate Media, publisher of "Real Estate Forum" and GlobeSt.com.

Copyright © 2006 ALM Properties, Inc. All rights reserved. Reproduction in whole or in part without permission is prohibited.

2006-06-14T12:04:00.001-04:00

Jones Lang LaSalle

51,000-SF Industrial Site Sells for $5M
By Eric Peterson

SOUTH HACKENSACK, NJ-Seagis Property Group has picked up yet another industrial property in a buying spree that has seen it snap up more than $215 million of assets on the East Coast in just over a year. The latest buy is relatively small, but it's a Meadowlands market acquisition and the per-sf rate was very healthy for an industrial property.

Seagis is paying $4.9 million for the 51,000-sf building at 100 Wesley St. here, a price tag that factors out to $96 per sf. The seller was identified by Seagis only as "a consortium of private investors." Built in 1982, the building is currently fully leased to delivery service DHL.
"This building is located directly off I-80," says Dave Gibbons, senior vice president of the West Conshohocken, PA-based Seagis. "It's suited for the Meadowlands user that requires immediate access to the area's transportation network."

Seagis' latest acquisition comes just two months after the company picked up a 955,000-sf industrial building in Edison, NJ, paying $61.5 million for the asset. Seagis bought the building and leased it back to Victoria Classics, the New York City-based home furnishings company. That acquisition came on the one-year anniversary of Seagis' founding by former Keystone Realty Trust execs Charles C. Lee Jr. and John Begier.

And earlier in the year, Seagis bought two parcels of land totaling 24 acres at New Jersey Turnpike Exit 8A with plans to build almost 327,000 sf of W/D space on spec. That transaction followed closely on the heels of the company's acquisition of 350,000 sf of industrial space on more than 30 acres adjacent to the Technology Centre of New Jersey in North Brunswick, a deal worth $7.8 million.

Copyright © 2006 ALM Properties, Inc. All rights reserved. Reproduction in whole or in part without permission is prohibited.

2006-06-14T12:04:00.000-04:00

Jones Lang LaSalle

State to talk about Rt. 22 fixes
Public invited to meeting tonight in Somerville
By KARA L. RICHARDSON
Staff Writer

SOMERVILLE -- Short-term solutions to improve a dangerous two-mile stretch of Route 22 will be discussed tonight at the Somerset County Administration Building, where New Jersey Department of Transportation representatives will be available to answer questions.

From 4:30 to 7:30 p.m. today in the Freeholders Meeting Room, at 20 Grove St., interested residents can visit the project's public information center. The $4.5 million proposal is designed to improve safety at accident and bottleneck trouble spots between Route 202-206 and Chimney Rock Road in Bridgewater. Construction to improve the stretch of highway is set for 2010.

Pete Ahlert, 41, said he will be at tonight's meeting. Ahlert has lived on Somerville's Grove Street near Route 22 for 12 years. He worries about the proposed changes and how they will affect him and his neighbors.

"I'll listen to what they have to say," Ahlert said about tonight's meeting.

Ahlert said he's not troubled by the traffic in front of his home, but the Grove Street interchange is listed as one of Route 22's most dangerous areas.

The Department of Transportation's other areas targeted for safety improvements include:

The area near the Lone Star restaurant, Route 22 between North Bridge and Grove streets
The North Gaston Avenue and Adamsville Road median U-turns next to Midas and Bridgewater Diner (formerly Felix No. 9);

The bottleneck along eastbound Route 22, east of Route 202-206, near Mountain Avenue.
Other long-term Route 22 improvement projects are looming.

County officials have said a project to build an interchange and overpass at Route 22 and Chimney Rock Road could break ground this spring.

The entire long-term proposal, called the Route 22 Sustainable Corridor Project, has been estimated to cost $100 million.

Freeholders would like eventually to build a "suburban boulevard" -- a parallel deceleration lane for local traffic.

The plans call for building an express highway in the center median that would link Route 202-206 and Interstate 287 to through traffic, with limited crossovers to the local lane to serve businesses, offices and neighborhoods.

For that to happen, the county has to shrink the median to make room for express lanes. Doing so would mean eliminating three businesses and a single-family home from the center median. The business properties -- Midas, the Bridgewater Diner and the Lone Star restaurant -- would be acquired by the county, and the businesses would relocate.

The former Felix No. 9 Diner reopened as the Bridgewater Diner in February after a five-month renovation.

Kara L. Richardson can be reached at (908) 707-3186 or krichard@c-n.com.

2006-06-14T12:03:00.000-04:00

Jones Lang LaSalle

ImClone on the Block
The once-infamous pharmaceutical company has put itself up for sale. What will that mean for its stock?

Back in 2002, shares of ImClone Systems (IMCL ) were the butt of many jokes. Erbitux, the company's anticancer drug, had been rejected by the Food & Drug Administration. An insider trading scandal was dogging founder Dr. Sam Waksal and media magnate Martha Stewart, an early investor in the company (see BW Online, 08/09/05, "All Martha, All the Time"). Shares, which had peaked at more than $70, tumbled to single digits.

Four years later the company is in much better health. Erbitux eventually won approval from federal regulators. Last year the company reported net income of $100 million and total revenue of $383 million. Optimism over a range of promising new cancer treatments in the product pipeline has helped draw investors back into the stock, which traded Friday at $40.83.
Now management hopes to build on that success by selling the company in a multibillion-dollar deal to a large pharmaceutical or biotech company. ImClone has hired investment bank Lazard (LAZ ) to conduct an auction. ImClone, based in New York, has a market cap of $3.43 billion. It could fetch anywhere from $4.5 billion to $5 billion, analysts figure. Lazard declined comment.

DISTRIBUTION DEAL. A deal is by no means assured, though (see BW Online, 01/25/06, "ImClone: Hammered on the Block"). The probability of a sale is just above 50%, industry experts say. They believe ImClone is likely to end the auction in four weeks to six weeks, either with an announcement of a deal or a statement saying the company will go it alone for now.
The stock took a hit on June 6, dropping 6.9%, to $37.29, because a study on potential new uses for its colorectal cancer drug Erbitux wasn't as encouraging as some hoped. While the shares have recovered since then, the episode underscored the uncertainty surrounding the company.
A deal faces a key challenge. ImClone has an Erbitux distribution agreement with Bristol-Myers Squibb (BMY ). Bristol-Myers receives about half of the U.S. profits from Erbitux, according to analyst David Witzke of Banc of America Securities. Potential acquirers might very well want all the Erbitux profit and revenue for themselves.

Witzke says Bristol-Myers is probably willing to sell its interest in Erbitux. The question is whether Bristol will scare away potential ImClone bidders who are reluctant to pay too much for full control of the revenue stream.

ImClone has a strong presence in the fastest-growing segment of the anticancer drug market. Erbitux and other drugs in the pipeline are known as monoclonal antibodies. That means they attack one specific target without causing as much toxic damage to healthy parts of the body, according to Witzke. And they aren't eliminated through the liver, which helps avoid potential damage to that vital organ.

AWAITING TEST RESULTS. Erbitux is used to treat colorectal cancer and head and neck cancer (see BW Online, 06/09/05, "Erbitux: ImClone Makes Headway"). It may soon be used to treat pancreatic cancer, depending upon the results of government tests. Its use is expanding in other ways.

It's currently used as a second-line drug, after initial treatments with other drugs have failed. But it may have a future as a first-line drug as well, which would increase the size of its potential market. "I believe it's going to be a blockbuster," Witzke says. Revenues easily could pass $1 billion a year. Other analysts aren't as optimistic, and cite the test results released on June 6 as evidence.

The product pipeline at ImClone includes potential treatments for other kinds of cancers. It's developing monoclonal antibodies that might treat a variety of ailments, such as breast cancer, lung cancer, and prostate cancer.

MORE BULLISH. Analysts disagree about how much money the company might fetch in a sale, but there's general consensus that ImClone would be a strategic acquisition for a large pharmaceutical or biotech company. "ImClone possesses valuable manufacturing capacity, a strong balance sheet, and an early pipeline focused on validated targets," analyst Steven Harr of Morgan Stanley said in a report. Harr recently downgraded the stock from overweight to equal weight, on the theory that a takeover premium already is figured into the stock. His price target is $42.

Witzke is more bullish. He has a buy on the stock. "I think the stock can hit $48 over the next year even if the company isn't sold, because the product pipeline is underappreciated by some investors," Witzke says.

ImClone would make a logical fit for several large pharmaceutical companies. Johnson & Johnson (JNJ ) appears to want a bigger presence in the anticancer market. Merck KGaA, of Darmstadt, Germany, has expressed an interest in building a greater presence in the anticancer market in the U.S. (Merck KGaA and U.S.-based Merck Co. (MRK ) are not the same company.) Pfizer (PFE ) is looking to build up its drug pipeline as well, and may soon have additional cash to spend thanks to the ongoing auction of its consumer goods business.

Swiss biotech giant Serono (SEO ) also may be in the hunt. Industry experts say the company is looking at targets that have cancer drugs, a presence in the U.S. market, a history of profits, and a market cap in the $5 billion range. ImClone satisfies all those requirements.

The company has come a long ways from the dark days of 2002 and is beginning to generate some excitement. "2006 is shaping up to be a landmark year for the company," says Harr, of Morgan Stanley. Still, ImClone remains a volatile stock, subject to the tough scrutiny of regulators and researchers. No one thinks that a bidding war or a strong pipeline is about to drive the shares back to the $70 range they attained during the heyday in the Waksal era.

2006-06-09T09:57:00.000-04:00

Jones Lang LaSalle

Studley Welcomes Former CoStar VP Steven Coutts
by DeAnna Paul

Steven E. Coutts joined Studley to oversee national research operations for the company's 19 U.S. offices.

With more than 17 years of experience in real estate, research and information services, the newly appointed senior vice president will manage a department comprised of three primary specialties - business information, analytics and GIS services.

Coutts’ background includes two years as managing director at REIS Inc., where he represented clients such as Key Bank, Deutsche Bank and Goldman Sachs. Previously, he was a vice president with the Schultz Organization and the vice president of sales for CoStar Group Inc., managing a national sales team of more than 100 people.

Coutts is also the former president and founder of the Boston Commercial Real Estate Network, a former commercial broker with Ferris Real Estate in Boston, and co-owner of Coutts Capital, a New Jersey-based real estate investment company.

2006-06-09T09:55:00.000-04:00

Jones Lang LaSalle

BIG EOP'S TINY NY DEAL
Peter Slatin

It's the little things that count, even (or especially) in the big picture.

After plunking down $505 million for the signature Verizon Building at 1095 Sixth Avenue in at the corner of 42nd Street in Manhattan and then pledging to spend at least $250 million to reskin and upgrade the building, Equity Office Properties has now added another increment to its plans: In a long-running deal that closed on June 6, Equity Office Properties has purchased 75% of the tenancy in common that owns the fivestory building at 124 West 42nd Street. The property is contiguous to the park that EOP acquired as part of their Verizon building acquisition last year. The giant office REIT's price tag for this decidedly non-trophy asset? $12.5 million.

A source close to the transaction suggests that Equity Office's interest is likely driven by the approximately 25,000 square feet of development rights that come with the deal. If the company wants to raze the building and transfer the development rights to the building they are now renovating; it's possible that EOP could add some high-voltage floorspace at the top of the 40-story building, which is being marketed for rents as high as $85 a square foot.

The tiny property has been in the hands of a tenancy in common structure, composed solely of members of the Kassover family, which has owned the building for some rour decades; it was once the headquarters of their electronics and appliance retail chain, VIM Electric Co., which was a major appliance seller from the 1930s to the 1970s. The remaining one-quarter interest in the asset is still owned by Phillip Kassover, one of the heirs of the appliance chain, who declined to participate in the sale to EOP. But EOP will have a chance to acquire that interest later this year: a New York State Supreme Court Justice has ordered the sale of the original Kassover property by a court appointed referee on September 12.

The acquisition was negotiated by Shobi Khan, EOP's senior vice president for acquisition and leasing in the New York area, and Neil Goldstein, an attorney with Robinson Brog Leinward Greene. The HI Group, a Chicago-based real estate investment bank, also participated in the deal.

The terms of the auction will most likely require bidders for the remaining 25% interest in the property to put up hard cash and close within 30 days of the sale.

Real estate sources believe EOP is also still negotiating with Verizon to buy a conference center the telecom giant sill owns on the site, and which wraps around 124 West 42nd and also extends from 42nd Street through to 41st Street.

A spokesperson for Equity Office declined to comment on the transaction.