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An Open House for Everything

Kushner puts all its commercial rental properties on displayWAYNE-In a novel approach to finding tenants, developer Kushner Cos. of Florham Park is showcasing its entire commercial real estate portfolio. The company owns 19 office buildings, including 17 in New Jersey, with an overall vacancy rate of 20%.

More than 60 brokers last month trooped to a vacant Kushner building in Wayne, where photographs and marketing materials were on prominent display. “It’s a great idea, marketing all the properties together,” says Douglas Haynes, managing principal at CRESA Partners/NJ, a real estate services firm in Morristown.

Kushner held the open house while company founder Charles Kushner serves a two-year federal prison term for tax violations, fraud and retaliating against an FBI witness. The company said there was no connection between the marketing move and the jail-time for Kushner, who resigned as chairman last year.

The timing of the open house, called “All Roads Lead to Kushner (Properties),” was aimed at drumming up leasing interest before the year runs out. Many commercial landlords tend to bunch their leasing activity into the fourth quarter. The first quarter of the new year is traditionally a weak one for office leasing since many companies are still planning their strategies for the rest of the year.

New Jersey’s office markets have been weak for the past four years.

“We can’t say it [2005] has been the most active year for us,” says Ira Bloom, Kushner’s director of commercial real estate. He says he has received leasing inquiries for about 200,000 sq. ft. across the company’s portfolio.

The company is particularly eager to lease 1655 Valley Road, the four-story, 160,000-sq.-ft. building in Wayne where the open house was held. The vacant property formerly housed the headquarters of household cleaning products maker Reckitt Benckiser, which relocated to Parsippany two years ago. Kushner acquired the building as part of an $80 million portfolio it bought in November 2001 from Keystone Properties Trust of West Conshohocken, Pennsylvania. Keystone is now part of ProLogis of Aurora, Colorado.

Kushner may try to sell the building if it fails to attract tenants. “We’re on a two-way street here,” says Kevin Swill, president of Kushner Properties, which oversees commercial real estate. “We would entertain selling this particular building and none other, although we’d prefer to lease it.”

Swill says several brokers who specialize in property sales have checked out the Wayne building on behalf of prospective buyers. He says he expects the property could fetch from $150 to $175 a sq. ft., or $24 million to $28 million.

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