The thriving office and retail property reflects its history as a cutting-edge laboratory
The thriving office and retail property reflects its history as a cutting-edge laboratory
With a wide reflective façade once dubbed “The Biggest Mirror Ever,” the Bell Labs Holmdel Complex marked the forefront of modernist architecture and the optimism of scientific discovery that characterized the 1960s.
Opening in 1962 and measuring two million square feet, the building was the centerpiece of a sprawling office campus in suburban Monmouth County. At its peak, upward of 6,000 engineers and researchers passed through the complex’s doors every day.
Decades later, Bell Labs had moved on through a series of acquisitions. The Holmdel facility was almost completely dilapidated after the previous owners, Alcatel-Lucent, shuttered the property in 2007. Today, however, the site now known as Bell Works is a thriving technology and retail hub serving as an example of how private developers can leverage public and private investment to revitalize suburban office parks and other properties that might otherwise be written off as relics.
‘I got pretty nervous’
Somerset Development finalized a deal in 2013 to purchase the Bell Labs property and embarked on a two-year renovation of the office building, ending in 2015.
“The building was erected in 1960 and it just needed to get updated,” said Somerset Development President Ralph Zucker.
Heating and cooling was outdated, the skylight was leaking and the digital laboratories needed to be converted to office space.
When Bell Works opened its doors in 2015, Zucker admitted to anxiety about the success of the endeavor and initially drew only tepid interest.
The first tenant was a real estate broker who signed a five-year lease for a 1,200-square-foot office.
“Now I got pretty nervous. Two million square feet [to] 1,200 square feet. You can figure out how [the] economics work,” Zucker said.
“In this two million-square-foot facility, there were 20 people. We used to throw footballs in the atrium,” said Roy LaManna, CEO of digital media and video marketing company Vyida Inc., one of the early tenants.
“Now if we did it, security would probably stop us,” LaManna said.
According to the most recent figures provided by Somerset Development, the complex has 80 tenants —61 offices and 19 retail outlets.
“People are literally fighting to get in the door,” Zucker added.
LaManna said, Vydia, founded in 2013, had seven employees in the company when it moved into Bell Works in 2015.
Vydia now has 55 employees in its 5,500-square-foot office space, prompting the owners to consider a larger space in the Holmdel complex.
The firm has a smaller office near Los Angeles, allowing it to tap into the film and media market on the West Coast. The Holmdel office allows Vydia to do the same on the East Coast and within the New York City market.
A local tech center
Zucker said that Bell Works, staying true to the Bell Labs history, caters mainly to the tech sector. Even tenants in the banking and insurance industries operate with a significant technology component.
The Murphy administration’s focus on sectors such as technology has been a boon to Bell Works, he added.
“[Gov. Phil Murphy] has been to Bell Works quite a few times … and frankly I feel very comfortable with the administration and what they’re doing for New Jersey,” Zucker said. “They have a focus on tech that has been very helpful to what we’re doing.”
Murphy, in his economic master plan unveiled on Oct. 1, 2018, called for the NJ Forward Tax Credit program, among other proposals, to overhaul the state’s economic incentives aimed at attracting business and investment to New Jersey.
The program would cap tax credits and focus on specific “high-growth” industries such as life sciences, research and development, clean energy and manufacturing.
Some of the largest companies based at Bell Works include iCIMS, which rents 350,000 square feet of space on four floors capable of accommodating 2,000 employees.
The state Economic Development Authority awarded iCIMS a $38 million tax break to move to Holmdel.
Another Bell Works tenant, software development company STOPit, participated in the EDA’s Angel Investor Tax Credit Program.
The program offers a 10 percent refundable tax credit against the state’s corporate business tax or gross income tax for qualified investments in emerging technology businesses physically setting up shop in New Jersey.
Stephen Socolof, managing partner at the New Jersey Tech Council Venture Fund, which invests in startups, said media companies such as Vydia have attracted the fund’s attention.
In the lifespan of the first fund, NJTC Fund I, the fund managers invested in 33 separate companies, according to Socolof.
It started at $70 million through investments from private companies such as TD Bank, corporate law firm Sills Cummis and Gross PC, wealth management firm Merrill Lynch and corporate law firm Dechert LLP, as well as a $7.15 million investment from the EDA. It ultimately garnered a return of $370 million.
“The [New Jersey] Tech Council is a partner and an investor in the fund, so in terms of partnership, their support for us sort of supports their mission for the tech community,” Socolof said.
The fund typically targets startups with investments of between $500,000 and $2 million. Vydia was one of the first companies to receive an investment under the second fund, Tech Council Ventures II.
In December, the EDA unveiled the first nine participants in its NJ Ignite program, which was unveiled in July and provides startups with up to nine months of rent assistance at an incubator or other collaborative workspace.
Among those nine picks were CoLabs, a 20,000-square-foot collaborative workspace, located in Bell Works and geared toward tech businesses.
“Any kind of program that can help us to incentivize companies to stay in New Jersey, I think is important, that we have programs in place for companies at a very early stage to a company that is starting to get a handle on things,” said Sean Donohue, founder and manager of the CoLabs space.
In collaborative workspaces, startups and freelancers share space and resources, fostering growth through networking and cooperation.
Freelancers, remote workers and start-ups have all passed through CoLabs, many of them tech businesses, according to Donohue. That amounts to 100 people spanning 70 member companies ranging from one to three employees.
More established companies, looking to get their feet wet at Bell Works, will opt to join the CoLabs space for a short period.
“I think the NJ Ignite program is a great tool to help work with a lot of these emerging tech companies that are just looking for a little bit of runway, that are just kind of gathering steam,” Donohue said.
City in the suburbs
Zucker said he envisions Bell Works as a so-called “metroburb,” a city deep within suburban New Jersey. In Bell Works’ case, that means an entire indoor downtown.
Several retailers signed leases within the past year, including a local township library, Dimension Dental, OceanFirst Bank and home decoration shop City Barn Country Penthouse.
Somerset Development is also in the process of constructing a 200-room hotel atop by the Bell Works office building.
Murphy’s economic master plan calls for revitalizing suburban office parks and malls, citing the Bell Works complex as a potential direction for other underutilized properties across the state.
One proposal, the New Jersey Aspire Tax Credit Program, would provide gap financing to redevelop these properties into commercial, residential and mixed-use developments, focusing mainly on urban communities, as well as suburban neighborhoods near mass transit.
Meanwhile, state legislators want to tweak one of New Jersey’s oldest redevelopment laws to give a shot in the arm to vacant and underused malls and corporate office parks.
Under the proposed measure, Assembly Bill 1700, municipalities can designate these sites as “areas in need of redevelopment,” a status that allows them to provide economic incentives to attract investment, business and jobs.
These incentives include payments in lieu of property taxes. Under the designation, towns can use eminent domain in areas in need of redevelopment so a private entity can handle the redevelopment.
Under the proposal, any mall, shopping plaza or professional office park is eligible for the designation if it has less than 50 percent occupancy for at least a year.
Proponents have argued that millennials and other residents with spending power are leaving suburbs in favor of urban neighborhoods.
Businesses have also followed suit, opting for densely populated and urban parts of the state, leaving behind the corporate office parks of a prior generation.
The Assembly Commerce and Economic Development Committee approved A1700 on Sept. 13. The upper-house version, Senate Bill 1583, was referred to the Senate Community and Urban Affairs Committee on Feb. 25, where it has not seen any movement since then.c