CT Realty, PGIM to bring 1.7M-square-foot logistics center to Salem County (updated)

As demand for industrial space persists, a 1.7 million-square-foot logistics center will rise on a South Jersey site that can reach 66 million consumers within a day’s truck drive with delivery slated for the third quarter of 2023.

CT Realty announced it acquired 282 acres of industrial land in Salem County’s Pennsville in a joint venture with PGIM Real Estate for the development of the Garden State Logistics Park.

According to CT Realty, development is already underway.

“This is an exceptionally rare opportunity to assemble a critical mass of land and create a top-flight logistics project in the second largest industrial market in the country,” said Rob Huthnance, who oversees CT’s development activity in the Eastern U.S. “This project is at the gateway to Southern New Jersey and will serve as a distribution hub for the entire Northeast.”

CBRE Vice Chairman Brian Fuimara handled the land sale. Financial terms of the transaction were not disclosed.

The property was sold by Deepwater Investment Group (D2), an affiliate of the D2 Organization, that company announced May 24.

Located at the former Deepwater property next to the Delaware Memorial Bridge at Interstate 295, Garden State Logistics Park will be comprised of two buildings — measuring 1.2 million square feet and 512,442 square feet, respectively — with 40-foot clear heights and either cross-dock or front-loaded building configurations. CBRE will also represent the buildings for lease or sale through its New Jersey and Philadelphia offices, CT Realty said.

In 2021, the project was approved for a New Jersey PILOT (payment-in-lieu-of-taxes) agreement.

“In an ultra-tight industrial market marked by upward pressure on rents, the PILOT designation produces a meaningful cost savings for large tenants,” Huthnance added. “The ability to deliver this tax benefit in brand new building designs with cutting-edge functionality presents a compelling case for this project.”

According to D2, the site formerly housed a non-operational coal-fired power plant until the company reached out to power generation company Calpine about the property.

“A lot of people thought we were early on Salem County when we began redeveloping the site four years ago,” Keith Delaney, CEO of D2 Organization, said in a statement. “But we were confident that tenants and investors would be attracted to the site’s unique attributes.”

Though there were remediation and entitlement challenges, D2 said the site’s existing infrastructure and utilities stood out as differentiating factors when comparing other spaces in Salem County.

“The site was extremely complex,” said D2 Executive Vice President Dan McGreevy. “We had to come up with a remediation plan, work around wetlands and transmission lines, secure a PILOT agreement, and gain final approvals.”

Those final approval and permits came from the county and the state Departments of Environmental Protection and Transportation.

“Rents in South Jersey continue to climb exponentially, which is just one of the reasons why investors remain attracted to the region,” Fiumara said. “With another 5 million square feet of active development projects in the region, D2 is well positioned to benefit from the strong tailwinds in the South Jersey industrial market.”

PGIM Real Estate is the real estate investment and financing business of PGIM, the $1.5 trillion global asset management business of Newark-based Prudential Financial.

Editor’s note: This story was updated at 6:51 a.m. EST on May 24, 2022, to include details about the seller of the property and additional remarks.