we can accommodate those requirements.”
Russo has access to multiple fiber
providers for its 1. 7 million sf in Carlstadt to
help tenants meet their needs for rapid data
transfer and redundancy, with the latter creating demand for increased water capacity.
“Water capacity is key for larger requirements,” Pembroke says. “If they cannot cool the facility, they cannot run it, so
water requirements become almost as critical as power. If you don’t have redundant
water sources you try to pull water from at
least two mains in case you lose one.”
And Russo is finding that its new tenants
are looking for aesthetic appeal as well
as modern space.
“We have a lot of tenants who locate their
office space alongside their primary
distribution space,”
Pembroke says.
The company recentl y completed a
135,398-sf build-to-suit lease with Pepsi Bottling Group at Saw Mill Park in Kearny. It’s
one of Pepsi’s largest distribution facilities in
North America and will directly serve cus-
“The difficulty is in getting a
site plan through approvals
that you don’t want to have
to go back and change.”
JEFF MILANAIK
Heller Industrial Parks
tomers in North Jersey. Once a contaminated brownfield site that Russo remediated,
Saw Mill Park is also home to H.D. Smith,
the largest privately held national full-service
wholesale distributor of pharmaceuticals,
OTCs and seasonal merchandise. The company has more than 200,000 sf at the site.
“In the Meadowlands, ceiling heights
are always an issue. Our new buildings are
36-foot clear, although we don’t find most
tenants use that full height,” Pembroke
says. “In terms of size, the 30,000- to
50,000-sf requirements still are the bread-and-butter of the Meadowlands.”
Russo’s buildings in the Meadowlands
are fully occupied now, but the company
has begun marketing some facilities where
leases expire in June of next year.
“Floor loads in the Meadowlands are always an issue, too. We are fortunate that we
have good land conditions under our facilities,” Pembroke says. “We have been able to
accommodate paper companies with high
floor-load requirements. Our Kearny facility
accommodates loads of 500 pounds per sf.”
TENANT-IN-COMMON
PROFESSIONALS HAVE AN INFORMATIVE
NEWSLETTER-IN-COMMON.
Looking ahead, landlords may have to
be more aggressive. The large amount of
new construction taking place at Turnpike
Exits 8A and 7A is going to give tenants
solid ground to negotiate for the next couple of years, as CBRE’s Lissner sees it.
The tenant-in-common business has grown so strong that we’ve given this sector its own newsletter.
As with its parent newsletter NET LEASE FORUM, TIC Monthly is reported and written by Michelle Napoli,
a highly regarded journalist with a keen understanding of the issues, trends and intricacies of the
TIC marketplace. We’ve also gathered an impressive group of TIC experts onto our editorial advisory board,
drawn from the ranks of TIC sponsors, attorneys, brokers and other “founding fathers” of this sector.
Every month, we bring complete news and issues coverage of the TIC industry.
“Some landlords are going to have to start
getting aggressive and it may entail some
free rents and other concessions,” she says. “I
see that happening over the next 12-24
months. With six million sf of new space in
a market that typically takes two million sf a
year, there is three years of supply out there.”
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Pembroke says many of the institutional
investors and REITs are offering some free
rent, so Russo is fielding more requests for
that than in the past. So far, however, the
company is holding the line, although he
acknowledges that every deal is different.
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“Depending on the tenant, we’ll give work
letters and agree to refit a space and roll the
cost of that back into the lease as along as we
can securitize it,” he concludes.—RENJ
