Reputed Mobster Sells Land to NJ Transit

NJ Transit wanted the land for its plan to build a tunnel connecting New York and New Jersey. After the project was canceled, the family of a reputed mobster that owned the land wanted the money.

Now the family of Carmine “Papa Smurf” Franco have gotten a nice payout from the transit agency to help settle the dispute: $6.13 million, according to a settlement agreement NJ Transit.

The settlement ended a seven-year dispute with Franco’s family since the land was condemned for the rail project, which was supposed to double the train capacity between New York and New Jersey. The project was canceled by Gov. Chris Christie in October 2010. Much of the money was expected to be distributed through wire transfers by Sept. 1.

NJ Transit said it approved the settlement with Franco’s family four months ago. made the settlement public in an article this week. NJ Transit confirmed the settlement to Patch and emailed a copy of the agreement.

The 1.89-acre tract is located on the border of Hoboken, Weehawken and Union City. The two sides fought in court over the land that was valued at $8.15 million.

Franco, a 77-year-old Genovese Crime Family associate, has long been suspected of having mob ties and was once banned from the trash business in New Jersey, court papers said. In 1998, he was sentenced to prison and agreed to pay $11.5 million to the state and Bergen County for illegally carting trash out of state.

Franco was then busted in 2013 for being the ringleader of a scheme to control crooked waste management companies, law enforcement officials said.

Franco was one of 32 people in New York and New Jersey charged in the FBI-run takedown that included members of several crime families, authorities said. Franco was allegedly at the center of a scheme involving three well-known mob families, the Genovese, Gambino and Lucchese crime families.

According to U.S. Attorney’s Office release, Franco was one of 12 people who controlled crooked waste management companies that were officially owned by people who had no past ties to organized crime, who were known as “controlled members.” He was later convicted in 2014 and served a year in jail.

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How will new tax bill affect Real Estate in NY and NJ?

The U.S. Senate and House of Representatives on Monday began the grueling process of hashing out the disparities between their tax bills — a task that will require reconciling hundreds of billions of dollars in differences.
The two versions of the legislation are a bit of a mixed bag for the real estate industry — disproportionately favoring the commercial sector over residential. Limited liability companies (LLCs) and real estate investment trusts win big under both. Homeowners? Not so much.
Heidi Learner, chief economist of Savills Studley, warned that the benefits will likely come at a cost. After all, the $1 trillion that is expected to be added to the federal budget deficit — as estimated by the Joint Committee in Taxation — will need to be made up for elsewhere.
“From the commercial front, the treatment is quite favorable,” Learner said. “But any perks could be offset by higher interest rates.”
The Real Estate Board of New York has also spoken out against the elimination of the federal deduction of state income taxes, and has voiced concerns over the impact the House’s version will have on affordable housing construction.
“The tax reform legislation under consideration contains elements that will promote economic growth and job creation,” REBNY President John Banks said in a statement. “There are several issues, however, with which we remain deeply concerned.”
Here are the issues that will most dramatically impact the real estate industry:
1. Pass-through deductions
The biggest developers and investors in New York City, Los Angeles and Miami rely extensively on LLCs and partnerships. For this reason, the increase in tax cuts for pass-through entities — which don’t pay income taxes at the corporate level — is likely a significant boon to the industry. The House version caps the pass-through rate at 25 percent, down from the current 39.6 percent. The Senate version allows such businesses to exclude 22.4 percent of their income from taxes.
“This could certainly cause a lot of people to rethink how they structure their business,” Learner said. She noted that more owners may opt to form LLCs or other partnerships to benefit from the deduction.
Real estate investment trusts (REITs) will also benefit from the lower pass-through rates, as the New York Times noted.
2. Corporate tax cuts
Both the Senate and House versions of the bill slash the corporate tax rate from 35 percent to 20 percent. The House version kicks in next year, while the Senate version starts in 2019.
3. Depreciation
The Senate bill shortens the depreciable life of commercial assets from 39 years to 25 years, meaning that the rate at which property owners can take these deductions is sped up, according to the Times. Shimon Shkury, founder of Ariel Property Advisors, says the change is a win for commercial property owners.
“The property owner has a non-cash deduction, and essentially shelters more income,” he said.
4. Estate tax
This one’s for the real estate dynasties. The Senate version of the bill would double the federal estate tax exemption levels — currently a 40 percent tax on estates worth more than $5.49 million for individuals, and nearly $11 million for married couples. The House bill would do the same until 2024, when it proposes to repeal the estate tax altogether. According to the Times, President Trump would save $1.1 billion under the House’s bill.
5. Private activity bonds
City officials estimate that the elimination of private activity bonds would mean 10,000 less affordable housing units will be created or preserved each year — in New York, that could cut the de Blasio administration’s goals roughly in half. These bonds are used to claim 4 percent tax credits each year (which yield approximately 30 percent of the cost of constructing low-income housing over a 10-year period), and are a major source of funding for affordable housing across the country.
“You would be looking at a 65 percent reduction in the production of affordable housing [nationwide],” said Chris Eisenzimmer, director of affordable development at Greystone. “It’s creating a lot of uncertainty amongst investors and owners.”
The House bill revokes private activity bonds, while the Senate version leaves them intact.
6. Mortgage and property tax deductions
The House version caps mortgage interest deductions at $500,000, down from $1 million. The Senate’s bill doesn’t change the cap on these deductions but eliminates them for home equity loans, the Washington Post reported. The Senate version has also decided to follow the House in allowing deductions on property taxes of up to $10,000.
Bonus: Private jets!
The inclusion of a tax break for private jet owners in the Senate version of the bill inspired a flurry of angry tweets and stories this month. The measure, however, actually tweaks an existing tax law to assure that private jet owners don’t get hit with a “ticket tax,” which is intended for commercial airlines, according to the Wall Street Journal. Still, the private jet owners out there — Steve Witkoff, Jeff Greene, Michael Stern and Richard LeFrak, to name a few — are probably pleased with the change.
Tags: 1031 Tax Exchanges, estate tax, Real Estate and Politics
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One Newark Center SOLD

A Chinese firm is investing in Newark.

Beijing Ideal Group, a investment and development company, purchased most of One Newark Center, a 22-story building on Raymond Boulevard near Military Park and Newark Penn Station, commercial realtor JLL announced this week.

The financial details of the company’s purchase from its previous owners, Mack-Cali Realty Corp. and The Praedium Group, were not disclosed. But, Cushman and Wakefield, a real estate services firm, announced earlier this month it had secured $66.58 million in financing for the Chinese company to buy the sixth through 22nd floors of the building. The first five floors will remain Seton Hall Law School, and were not part of the sale.

Morgan Stanley put up the 10-year, fixed rate financing for the sale, Cushman and Wakefield said.

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Cushman & Wakefield Brokers $66.6M in Financing for One Newark Center in New Jersey

Cushman & Wakefield Brokers $66.6M in Financing for One Newark Center in New Jersey
Located at 1085 Raymond Blvd. in Newark, N.J., One Newark Center features 423,028 square feet of office space.

NEWARK, N.J. — Cushman & Wakefield has arranged $66.6 million in acquisition financing secured by One Newark Center, located at 1085 Raymond Blvd. in Newark, for Beijing Ideal Group. Morgan Stanley Bank provided the 10-year, fixed-rate financing. The property in the transaction represented floors 6 through 22 of One Newark Center, a 22-story, 423,028-square-foot office building, along with the adjacent 10-story parking garage. John Alascio, Sridhar Vankayala and Noble Carpenter of Cushman & Wakefield represented the borrower in the transaction.

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The Importance of a Tenant Representative

The Importance of a Tenant Rep

By Don Catalano

When you’re looking to relocate your offices or are expanding to a whole new market, you want to end up with the best space for your needs and be able to secure that unit for a fair price. Having a tenant rep broker on your side is crucial to accomplishing those goals.

Here are the top reasons why you should contact one before you begin searching for properties:


1. The Landlord Isn’t On Your Side

The goal of any landlord is to maximize the income that they make from renting their units. When you get to the negotiating table, you need someone who knows the commercial real estate market inside and out looking after your interests. Otherwise, you can’t be certain that you’re receiving a fair deal.


2. You Can’t Get In to See Every Property

Often times, office spaces in highly desirable buildings and locations within a city fill up before the property is even advertised as being available. If you don’t have a tenant rep broker who can get you in the door at places that are newly vacant, you could miss out on great opportunities in your area.


3. You Have Enough to Do Already

If you truly want to get the best space for your business needs and your budget, you need to invest plenty of hours familiarizing yourself with the market and searching through listings to find properties that are a good match. A tenant rep broker will take over the responsibilities for you, so you can focus on running your business, not following the commercial real estate market.


4. You Don’t Know the Lingo

The language that is printed in commercial real estate leases and tossed around in negotiations isn’t something that you encounter every day. A tenant rep broker can take the time to explain unfamiliar terms to you and provide you with advice and guidance that can keep you from making the wrong decision.

5. You May Not Know Exactly What Space Is Right

You know your business inside and out, but you may not be able to see all the ways that your office space impacts your business. When you’re searching for a space, you may not think of an amenity or feature that could improve productivity, lower costs or otherwise benefit your business. With years of experience working with companies like yours, can help to identify just what you need from a space and help you find it.


6. You May Not Know the Right People

As negotiations progress, you may need the help of an outside professional like a real estate attorney or a licensed interior designer. Tenant rep brokers have established networks with professionals in a variety of fields and can help you easily find the right provider.


Having a tenant rep broker at your side can greatly improve your chances of securing the ideal space for your needs at a fair cost. Best of all, you won’t have to pay for his or her services. The tenant rep broker only gets compensated if you sign a lease, ensuring that he or she will go to great lengths to help you find your dream property at the right price.



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Hovnanian Sells World Headquarters

K. Hovnanian Enterprises, one of the nation’s largest homebuilders, announced last week it was accepting an unsolicited offer for the company’s world headquarters, 110 West Front St. While company representatives did not reveal the purchaser in the Sept. 7 press release, OceanFirst Bank, headquartered on Hooper Avenue in Toms River, has announced it is under contract to buy the site and will use the West Front Street location for additional offices for administrative uses.

“We’ve had significant expansion over the past two years,” said Jill Apito Hewitt, OceanFirst’s director of investor relations and corporate communications. With OceanFirst’s recent acquisitions and with another currently pending, the banking operation needed the additional location, she said.

K. Hovnanian plans on relocating to office space off Garden State Parkway Exit 120, in the Matawan/Old Bridge area. And while K. Hovnanian “remains committed to its roots in New Jersey” and will keep its official headquarters in Monmouth County, the company’s press statement acknowledged New Jersey represents about only five percent of its national homebuilding business. For the last 15 years Ara Hovnanian, the company’s chairman, president and chief executive officer, has maintained his offices in New York City, where he and his family live. “Mr. Hovnanian spends a significant amount of his time travelling across the country to the various divisions across 14 states,” the press release indicated.

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3 Tips To Make Search For Warehouse Space For Rent Easier!

A warehouse space for rent becomes a lifeline for your business if the nature of your business involves selling, storing and shipping physical products. You may rent an industrial space to store the inventory or purchase it, whichever suits you the most. However, renting comes affordable and quicker when you want to start your business activities right away. Warehouses fall under the category of industrial spaces which you can utilize for the storage of goods as and when needed. Take a sneak peek below to make your warehouse rental, your best initiative ever.

1. Pick A Strategic Location:

The foremost step while heading with a warehouse space for rent is to pick a strategic location that supports your business activities. Analyze how the location of the warehouse is impacting your business. The location should be such that it cuts down the logistics cost to optimal. For instance, picking a place located close to the airport could be your best bet for warehouse rental if the company indulges in international shipment.

2. Keep Room For Future Expansion:

No matter if you are currently operating out of a small warehouse, but it should have a room for expansion if the needs arise in future. Over time, your business may need to expand and demand more space, so you should better look out for a facility that can accommodate to the evolving needs.

3. Prefer A Safe Storage Environment:

The storage space must be mold free and well-maintained. You don’t want to end up spoiling your products with fungi and molds. The storage environment must be pest-free, especially if you are going to store perishable products. Furthermore, the warehouse must have a provision of air-conditioning for the sake of protecting your business goods. The warehouse design should restrict debris entering into the facility.

Looking for a warehouse space for rent NJ? Let Steven Muller help you get the best deal to fulfill your business needs. The listings for industrial space for rent/sale stay at the Steven’s fingertips, so his realty advice could save you thousands of dollars. He is a realtor who could make things work even on a small budget. Contact him now!

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Industrial Space Market Tightens Even More

Vacancy in the New Jersey industrial real estate market at mid-year 2015 dipped below 8.0 percent for the first time in more than six years, and occupancy gains finished in the green for the tenth consecutive quarter, according to East Rutherford-based Cushman & Wakefield. The commercial real estate services firm’s latest research findings also show continued brisk demand, a modest rise in asking rental rates and a healthy construction pipeline.

Overall vacancy dropped to 7.6 percent during the second quarter, down 0.4 percentage points from the end of March. Within the warehouse/distribution sector, the rate is nominally lower at 7.4 percent. “The warehouse market has strengthened considerably, with user demand offsetting significant product coming online in the form of new speculative development and large space dispositions,” noted Cushman & Wakefield’s Jason Price, research director – tri state suburbs. “We expect it will tighten even further during the second half of the year.”

New Jersey posted more than 5.9 million square feet of leasing activity during the second quarter, slightly ahead of the pace set during the first three months of 2015. With 11.8 million square feet of year-to-date leasing, the state is just behind the pace at mid-year 2014 (12.5 million square feet).

Fourteen new commitments in excess of 100,000 square feet were executed during the second quarter; half of these transactions were 200,000 square feet or greater. The largest involved Amazon’s 1.1 million-square-foot lease at 8003 Industrial Avenue in Carteret, Romark Logistics’ 359,950-square-foot lease at 23 Mack Drive in Edison and FedEx’s build-to-suit commitment for 315,000 at 1075 Secaucus Road in Secaucus. Renewal activity was strong as well, with 10 renewals in excess of 100,000 square feet. Among them, National Packaging Services signed a 300,000-square-foot renewal and expansion agreement at 1000 New County Road in Secaucus.

“This activity resulted in more than 3.3 million square feet of industrial space being absorbed year-to-date,” Price said. “Tenants absorbed 946,195 square feet in the second quarter alone. The Lower I-287, Upper I-287 and Meadowlands submarkets each recorded over 300,000 square feet of occupancy gains during the past three months.”

On the pricing front, New Jersey’s $6.38 per-square-foot average direct asking rental rate for industrial space is 3.1 percent higher than it was at mid-year 2014. In the warehouse/distribution sector, the average direct asking rent of $5.73 per square foot represents a hike of more than 13.0 percent over the past three years. The Lower 287, Port Region and Exit 8A submarkets saw their average direct rental rates edge higher in recent months.

Improving market fundamentals also continue to support new development. “After reaching a 14-year high in 2014, industrial construction remains steady in New Jersey,” Price said. “Just under 1.2 million square feet of product has been delivered year-to-date, including speculative buildings at 965 Cranbury South River Road (550,050 square feet) and 11 Corn Road (308,276 square feet) in South Brunswick.”

With another 3.3 million square feet currently under construction – heavily concentrated in the Lower 287 and Exit 8A submarkets – industrial space deliveries in 2015 are expected to outpace four of the previous five years in terms of volume. “Much of the product being developed is on a speculative basis,” Price said. “However, with net absorption easily outpacing construction the market is in no risk of becoming overbuilt in the near future.”

Price noted that Cushman & Wakefield anticipates the market will remain on track through the balance of 2015. “Healthy demand, including strong activity involving 3PLs and e-commerce retailers, should drive up rents in key submarkets through the end of the year,” he noted. “And despite a number of speculative space deliveries on the horizon, this demand will also result in space availabilities continuing to tighten – especially along the New Jersey Turnpike.”

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Commercial market going strong, especially in Mercer County, real estate agents say

Commercial market going strong, especially in Mercer County, real estate agents say

Just before the economy plunged into a recession and began a sluggish recovery, Hilton Realty bought an undeveloped lot in the Carnegie Center office complex on Route 1 in West Windsor.

Four years later, as the local market for office space began to show signs of strength, Hilton broke ground on an 88,000-square-foot, high-end office building at the 300 Carnegie Center tract. No tenants were signed up in advance, but Hilton was confident they would materialize.

“We started to see increased velocity, increased activity in the market,” Hilton assistant leasing director Matthew Malatich said. “We decided to start building the building and everything started to fall in place.”

Last year, well before the building was finished, Hilton announced its first tenant, Heartland Payment Systems, which now occupies more than 22,000 square feet in the building. VMS Fund Administration, Peapack Gladstone Bank, Advisors Asset Management, Moofwd and JP Morgan Chase Bank have all followed Heartland, filling up about 55 percent of the building. Malatich said he expects the building will be full by the end of this year.

Such performance has real estate developers and owners confident that robust times are ahead for the area’s commercial space and warehouse market, which also benefits from a well-educated work force and regional metropolitan areas. The vacancy rate in Mercer County for high-end, or Class A, office spaces dropped 1.1 percentage points last year to sit at an even 10 percent, based on a market report by Cushman & Wakefield, a commercial real estate company.

Hilton’s new building is commanding a premium rent, about $36 per square foot, a few dollars above the average rental rate for higher end commercial office space in the area.

The three-story office building features a modern granite and glass interior with sleek metal trim and a wall of windows that let light flood into the lobby. Hilton also included a fitness room with lockers and showers, and built the structure according to high environmental standards, Malatich said.

Despite the success of the building and the current strength of the market, local development of large commercial office buildings has been slow to pick up coming out of the recession. There has been little new construction of this type in the area other than the 300 Carnegie Center building, said Aubrey Haines, CEO at Mercer Oak Realty. And that slowness on the part of developers has contributed to a growing shortage of space.

“When you’re looking for smaller spaces you have a wide range of choices,” Haines said. “If you’re at 50,000 or 100,000 square feet, options are limited.”

While the recession pushed down demand for a few years, it also suppressed development.

“That creates more pent-up demand so when the market comes back they need a lot of space in a hurry,” Haines said. “There’s almost no new supply expected to come online.”

Demand is outpacing supply in the market, Haines said, but until rental rates for high quality office space increase it will be difficult to convince large banks to finance the development of new buildings. The suburban nature of the local market leads financiers to be hesitant to lend despite growing demand, he said.

As a result 300 Carnegie Center is the only newly constructed Class A office space to open in the area since 2009, he said. From concept to completion, it will take an average developer about 2½ to three years to produce a new building, Haines said, and with none currently under development it is unlikely that new space will be put on the market in the next two years.

Even large commercial tenants already in the area are going to be affected as many large leases expire in the next three years, Haines said. These tenants need to start thinking about where they will be in a few years and the effect this market will have on rental rates, he said.

“They have nowhere to go but up,” Haines said.

After remaining stable around the $30-31 per square foot mark over the past decade, Haines projects that the shortage of new space will push rates up toward $40 per square foot by 2020.

The market for industrial space in the area faces a similar dynamic of rising demand and limited supply, said Marc Petrella, a senior analyst with Cushman & Wakefield.

As the midpoint between New York and Philadelphia, and on a larger scale between Boston and Washington, D.C., the local industrial real estate market is in a promising position, he said.

The market, consisting largely of warehouses and manufacturing sites, is concentrated along the Turnpike in two submarkets surrounding exits 7A and 8A, Petrella said, and the area has seen a lot of growth and is primed for further expansion.

The 8A submarket, consisting of south Middlesex towns including Plainsboro and Monroe, has one new industrial development under way; a 450,000-square-foot building in South Brunswick. While this is a significant addition, it enters a submarket that has 68-million-square feet of warehouse space which already has 92 percent occupancy.

The 7A submarket is highly concentrated in Robbinsville, and while it is smaller than 8A it has seen high demand recently, as it has exceeded 1 million square feet in new industrial leases in each of the last three years.

“You keep hearing about all the companies bringing their operations back toward population centers,” Petrella said. New Jersey, with its dense population and surrounding metropolitan areas, is one of those centers, he said.

The market for industrial space in the area was weak through 2009 and 2010, but has recovered since 2011, he said. Vacancy in the warehouse market is about 8 percent currently, he said. The 1.2 million-square-foot Amazon warehouse under construction in Robbinsville is a promising sign for future industrial development in the area, Petrella said.

“The continued growth in ecommerce for traditional retailers is good for New Jersey just based on where New Jersey sits,” Petrella said.

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North New Jersey Industrial Market Tightening Up

SUNDAY, MAY 26, 2013 LAST UPDATED: SUNDAY MAY 26, 2013, 11:10 AM

While the office market continues to languish in North Jersey, industrial real estate is rebounding.

The Panasonic building at 100 Meadowland Parkway in Secaucus, which will be vacant later this year.
Hartz Mountain Industries Inc., which owns and manages one of the largest privately held commercial real estate portfolios in the country, leased more than 1.5 million square feet in the first quarter, and roughly 1.3 million of that was for its warehouse assets, according to the company. That activity included six leases for new warehouse tenants, who took about 400,000 square feet of space.

“The market is very healthy from a landlord’s perspective,” said Gus Milano, managing director for Secaucus-based Hartz.

How the market has improved
Area Vacancy rate 1Q 2013 Vacancy rate 1Q 2012 Rent 1Q 2013 (1) Rent 1Q 2012
Bergen 10.3% 11.2% $5.92 $5.68
Passaic 8.4% 8.4% $5.27 $5.14
North N.J. (2) 9.3% 10.3% $5.92 $5.72
(1) Asking rate per square foot a year for warehouse/distribution space
(2) Bergen, Passaic, Hudson, Morris and Essex counties

Source: Cushman & Wakefield of New Jersey Inc.

The overall industrial vacancy rate in North Jersey — Bergen, Passaic, Essex, Morris and Hudson counties — was 9.3 percent in the first quarter, down from 10.1 percent at the end of last year and 10.3 percent in the year-ago quarter, according to Cushman & Wakefield Inc. of New Jersey.

Some of the existing warehouse/distribution space is being taken by data centers, as the region has become one of the national hubs for data-center construction. And while the activity is generally considered positive, data-center operations generate fewer jobs than a warehouse or distribution center would.

“Anytime you’re in single-digit vacancy numbers, that’s a pretty healthy number,” said Marc Petrella, a Cushman senior director. “And in the first quarter of 2013, there were 5 million square feet of new deals done in those northern five counties. Activity is good. Supply is constrained, and so we see the market continuing on a positive trajectory and improving here in the near term.”

Bergen County saw its industrial vacancy rate decline to 10.3 percent in the first quarter from 11.2 percent in the same period a year ago. It was unchanged in Passaic County, at 8.4 percent.

In northern New Jersey, the industrial market is particularly active in not only the Meadowlands, which Petrella called “ground zero” for that real estate sector, but also Teterboro, Carlstadt, Port Newark/Elizabeth and, no joke, New Jersey Turnpike exits.

“I just had to do a report for somebody who wanted the vacancy rates per exit on the turnpike,” said Doug Bansbach, senior vice president and principal of real estate broker Cassidy Turley in Somerset. “The turnpike drives the market because of the truck traffic.”

There are a number of reasons why the North Jersey industrial market is getting a boost, creating an uptick that’s mainly being seen in warehouse and distribution space. Following the Great Recession, there’s pent-up demand for the space. Rising consumer confidence means companies have to supply and ship more goods.

Rising e-commerce sales are fueling the need for distribution outlets in the New York metro area, as well. Retail e-commerce spending surpassed $50 billion in the first quarter, up 13 percent from the year-ago period, according to ComScore.

While there’s growing demand, there’s actually a limited amount of state-of-the-art, Class A industrial space in most of Bergen and Passaic counties, brokers said. No one dared build it during the economic downturn. And some of the existing warehouse/distribution space is being snapped up for a whole new real estate use: data centers. And in general, data-center operations generate fewer jobs than a warehouse or distribution center would.

There are several industrial projects under way, reflecting the increasing strength of the sector. Teterboro Landing, the retail mall planned by developer Catellus for the former Honeywell site in Teterboro, will include a 160,000-square-foot, build-to-suit distribution center, said David Knee, managing director for Jones Lang LaSalle, the broker on the building.

“Multiple developers have been starting to spec buildings, which really was non-existent for several years, and the buildings are slowly getting leased,” said Ken Lundberg, senior vice president at NAI James E. Hanson in Hackensack.

Hartz plans to renovate the 673,000-square-foot warehouse complex at 100 Meadowland Parkway in Secaucus that Panasonic Corp. is vacating in October, Milano said. Panasonic is moving to Newark.

“The building is 40 years old and we have plans to make it a new, modern distribution building,” he said. “We’re going to raise the roof to 32-foot clear [from 24 feet]. There are very few 32-foot clear buildings that are half a million square feet or more. It’s a rarity. So it will be a pretty spectacular product to have in this market near New York City.”

That facility won’t be ready until the second quarter next year, but Milano said, “I already have tenants that I’m in negotiations with.”

Hartz also plans to demolish a 200,000-square-foot office building at 1 Panasonic Way in Secaucus.

“That parcel will be redeveloped as either an expansion of the warehouse or other possible uses,” Milano said.

Consumer spending and e-commerce sales have been on an upswing, and that fuels the need for industrial space.

“Warehouses fill up based on consumer consumption,” Lundberg said. “If, specifically, retail sales go up or companies are convinced they are going up, they will purchase more product, hence the need for more space.”

Added Milano, “There’s retail demand, and many of our third-party logistics companies support the retail industry.”

E-commerce is now a big part of that consumer equation. Amazon, with its same-day-delivery pledge to customers, has taken a huge stake in industrial real estate in Central Jersey, planning a 1-million-square-foot fulfillment center in Robbinsville. To keep its same-day-delivery goal, Amazon needed to have a distribution center close to New York City, but needed more industrial space than Bergen County, a mature market, had to offer, brokers said.

Ultimately, there will be a trickle-down effect for North Jersey, real estate officials said. Distribution centers need to be near large populations of end-users, Lundberg said.

“What’s going to help northern and central New Jersey, like the ports, is all the feeders that go to Amazon,” said Nicholas Nitti, CBRE first vice president in Saddle Brook.

Amazon isn’t the only company doing e-commerce, or promising quick deliveries to customers, that is leasing space in New Jersey. Online grocery seller Peapod said in December it is taking 345,000 square feet at the 880,000-square-foot Pulaski Distribution Center in Jersey City, Nitti said. His company represented Peapod in the deal, while Jones Lang LaSalle represented landlord Prologis. And most brick-and-mortar stores are now doing e-commerce, selling merchandise from websites, as well.

“We do have tenants that are in e-commerce businesses, there’s no question about that,” Milano said. “That’s part of the [warehouse/distribution] space they need for what they do. And some of the retailers have e-commerce within distribution space that they have under lease with us. So that’s certainly a segment of the market today.”

Rents for industrial space have also been trending up. In the first quarter the average asking rent for warehouse/distribution space in North Jersey was $5.92 a square foot a year, up from $5.72 in the year-ago quarter, according to Cushman. In Bergen, it was $5.92, compared with $5.68 in the first quarter last year. And in Passaic County, the rate was $5.27, up from $5.14 the prior year.

Rents on some of the new state-of-the art warehouse space are pricing in the mid-$7 range, Bansbach said.

“There is a slight uptick in asking-and-taking rents with fewer concessions that landlords have to make in terms of free rent and how much money they have to give a tenant to retrofit the space,” Knee said.

North Jersey has the largest concentration of data centers in the nation, and Bergen and Passaic’s stock of warehouse space is being eaten into by those centers, diminishing the supply as the demand is surging.

There’s been a burst of such activity in the past year. Digital Realty Trust Inc. acquired a former 271,000-square-foot Roche building at 701 Union Blvd., Totowa, for $16.8 million to transform into a data center. Earlier this year, Hartz sold a 283,215-square-foot building at 2 Emerson Lane, Secaucus, for $18.4 million to CoreSite Realty Corp. to convert into a data center. And late last year, Internap Network Services signed a long-term lease for 100,000 square feet in Secaucus for a data center. Those three deals alone took roughly 654,000 square feet out North Jersey’s pool of warehouse space out of 285.7 million square feet in overall industrial space.

All in all, the industrial real estate market has become extremely complex and challenging for brokers, Nitti said.

“In addition to understanding all of the industrial inventory and pipeline projects, you now need to understand inbound-and-outbound freight; space planning; logistics; drayage costs [the price between picking up a container at the ports and delivering it to another point]; flood and water tables; how will gas prices and tolls affect the distribution model; and how do traffic patterns affect it,” Nitti said. “Companies are scrutinizing many different pieces of the supply chain to get the most effective and efficient model so they can outperform their competitors and grow in this economy.

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