Jun 01, 2006
IDI to Develop 1.35-MSF Facility at Exit 8A in Central New Jersey
South Brunswick, N.J. (June 1, 2006) -- Responding to rising demand among big-box space users, IDI is developing a 1.35-million-square-foot distribution facility in the Exit 8A submarket of Central New Jersey. The project, Middlesex Center, is being built off Davidsons Mill Road in South Brunswick, N.J., near the 8A exit of the New Jersey Turnpike.
IDI, serving as the general developer of the building, has provided a forward commitment to purchase the building upon shell completion by the Trammell Crow Company. The building will be completed during the first quarter of 2007.
With its proximity to the ports of New York and New Jersey and the importance of the New Jersey Turnpike as a major artery for the distribution of goods throughout the East Coast, Exit 8A is an attractive location for some of the most prominent logistics and retail companies in the United States.
“Demand among users for facilities proximate to the ports will continue to increase, but the developments under way in Northern New Jersey can only meet a portion of that demand,” said Frank Petkunas, vice president and regional development officer in IDI’s Philadelphia development office. “And many of the available parcels are infill sites that can only accommodate smaller buildings.”
Due to the limited availability of Class-A inventory space in Northern New Jersey, tenants are increasingly seeking space further south along the New Jersey Turnpike. In fact, an estimated 20 million square feet of prospective tenant space is being pursued for expansion and consolidation initiatives in the Central New Jersey market, Petkunas said.
However, there is only a small pipeline of ongoing projects in Central New Jersey. IDI’s 680,000-square-foot 324 Half Acre Road distribution facility is the only other project under construction in the Exit 8A submarket, and the supply of available land in the area is shrinking.
“There is nothing else comparable in size to this 1.35-million-square-foot building under development in the 8A submarket,” Petkunas said. “It’s almost a foregone conclusion that the land at 8A will be eaten up within the next three to four years, and there will be a natural progression of projects further south to Exits 7 and 7A.”
According to Trammell Crow, there is a total of 53.3 million square feet of industrial space in the Exit 8A submarket, which makes it the second largest submarket in Central New Jersey after Exit 10, with 97.7 million square feet.
The 8A submarket has been a big draw in recent years for major consumer-product companies. Big-box users that have leased space ranging from 600,000 square feet to more than 1 million square feet along 8A include Barnes & Noble, Costco Wholesale Corp., The Home Depot, Williams-Sonoma, Crate & Barrel and Volkswagen of America.
The Class-A, 1.35-million-square-foot Middlesex Center, which is being built on an 88-acre site, will be a cross-dock facility featuring 36-foot-clear ceiling heights, 279 loading doors, 167 trailer stalls and two drive-in doors.
“This will be a core asset for IDI in one of the best markets in the U.S.,” said Greg Ryan, vice president of acquisitions for IDI.
Institutional investors have been eager to purchase industrial buildings at Exit 8A due to strong tenant demand and steadily rising rental rates. ING Clarion, Allianz of America, RREEF, Morgan Stanley and TIAA-CREF are among the investors that have purchased sites in recent years. Allianz of America owns the 1.2-million-square-foot, Class-A Turnpike Crossings I, II and III distribution buildings in South Brunswick.
“The tenant roster along the 8A corridor is a “who’s who” of some of the biggest companies in America, and growth in the area is concentric and controlled due to the strict land-use regulations of the various townships,” said Brian Brennan, director of real estate acquisitions at Allianz of America.
IDI’s Philadelphia office is extremely active in the Central New Jersey market. Ongoing projects include:
• A 1.15-million-square-foot bulk distribution facility planned for a site off Exit 7 in Bordentown that was recently acquired by IDI.
• Construction of the 680,000-square-foot Half Acre Road distribution facility in the Exit 8A submarket in Cranbury.
IDI, serving as the general developer of the building, has provided a forward commitment to purchase the building upon shell completion by the Trammell Crow Company. The building will be completed during the first quarter of 2007.
With its proximity to the ports of New York and New Jersey and the importance of the New Jersey Turnpike as a major artery for the distribution of goods throughout the East Coast, Exit 8A is an attractive location for some of the most prominent logistics and retail companies in the United States.
“Demand among users for facilities proximate to the ports will continue to increase, but the developments under way in Northern New Jersey can only meet a portion of that demand,” said Frank Petkunas, vice president and regional development officer in IDI’s Philadelphia development office. “And many of the available parcels are infill sites that can only accommodate smaller buildings.”
Due to the limited availability of Class-A inventory space in Northern New Jersey, tenants are increasingly seeking space further south along the New Jersey Turnpike. In fact, an estimated 20 million square feet of prospective tenant space is being pursued for expansion and consolidation initiatives in the Central New Jersey market, Petkunas said.
However, there is only a small pipeline of ongoing projects in Central New Jersey. IDI’s 680,000-square-foot 324 Half Acre Road distribution facility is the only other project under construction in the Exit 8A submarket, and the supply of available land in the area is shrinking.
“There is nothing else comparable in size to this 1.35-million-square-foot building under development in the 8A submarket,” Petkunas said. “It’s almost a foregone conclusion that the land at 8A will be eaten up within the next three to four years, and there will be a natural progression of projects further south to Exits 7 and 7A.”
According to Trammell Crow, there is a total of 53.3 million square feet of industrial space in the Exit 8A submarket, which makes it the second largest submarket in Central New Jersey after Exit 10, with 97.7 million square feet.
The 8A submarket has been a big draw in recent years for major consumer-product companies. Big-box users that have leased space ranging from 600,000 square feet to more than 1 million square feet along 8A include Barnes & Noble, Costco Wholesale Corp., The Home Depot, Williams-Sonoma, Crate & Barrel and Volkswagen of America.
The Class-A, 1.35-million-square-foot Middlesex Center, which is being built on an 88-acre site, will be a cross-dock facility featuring 36-foot-clear ceiling heights, 279 loading doors, 167 trailer stalls and two drive-in doors.
“This will be a core asset for IDI in one of the best markets in the U.S.,” said Greg Ryan, vice president of acquisitions for IDI.
Institutional investors have been eager to purchase industrial buildings at Exit 8A due to strong tenant demand and steadily rising rental rates. ING Clarion, Allianz of America, RREEF, Morgan Stanley and TIAA-CREF are among the investors that have purchased sites in recent years. Allianz of America owns the 1.2-million-square-foot, Class-A Turnpike Crossings I, II and III distribution buildings in South Brunswick.
“The tenant roster along the 8A corridor is a “who’s who” of some of the biggest companies in America, and growth in the area is concentric and controlled due to the strict land-use regulations of the various townships,” said Brian Brennan, director of real estate acquisitions at Allianz of America.
IDI’s Philadelphia office is extremely active in the Central New Jersey market. Ongoing projects include:
• A 1.15-million-square-foot bulk distribution facility planned for a site off Exit 7 in Bordentown that was recently acquired by IDI.
• Construction of the 680,000-square-foot Half Acre Road distribution facility in the Exit 8A submarket in Cranbury.
