The deal was the largest industrial lease in New Jersey for 2009.Industrial real estate developer IDI announced late Wednesday that it has signed a lease with a tenant who will occupy the entire 1,351,200-square-foot Middlesex I building, part of South BrunswickÂs Middlesex Center.
The deal, which was signed in late December, was the largest industrial lease in New Jersey in 2009. The tenant, who will occupy the space in June, is looking to consolidate a number of distribution sites in the eastern United States, according to IDI. According to Cushman & Wakefield, which represented IDI out of its Edison and Philadelphia offices, the deal is the largest lease ever signed in a speculative industrial building in northern and central New Jersey.
Atlanta-based IDI declined to comment on the deal or identify the tenant. But according to lease data reviewed by NJBIZ, the tenant will be furnishings and cookware retailer Williams-Sonoma. The retailer will pay rent on 600,000 square feet for the first 18 months, according to the lease data; beginning in 2012, they will pay rent on the entire space. Average rent will be $3.75 per square foot over the 10-year lease period.
ÂItÂs the only one who is out in the market for that kind of space that is close to making a deal,Â said Josh Adler, a partner at Edison-based industrial developer Adler Development. The retailer had been in the market for space for at least nine months, according to Adler, who said his company did not have an availability of that size and did not compete for the tenant.
The tenant, who will be moving into the new space in June, will be vacating two warehouse and distribution facilities in the Interchange 8A market: 257 Prospect Plains Road, a 781,300-square-foot building in Cranbury, and the 418,300-square-foot 113 Interstate Blvd., in South Brunswick Â creating net absorption in the market of about 150,000 square feet, Adler said. Net absorption refers to the net change in physically occupied space over a period of time.
ÂThe lease is good for the market,Â said Kenneth Lundberg, senior vice president at the Hackensack office of NAI James E. Hanson Inc. ÂThe building had been vacant since being built several years ago. Combined with several other leases which have recently been signed, there appears to finally be some life in the market.Â These include a 500,000-square-foot lease on Docks Corner Road, in South Brunswick, and a 254,000-square-foot lease on Costco Way, in Monroe, he said.
The long-term vacancy at Middlesex Center, which was completed in 2007, was the result of a combination of several factors, including Âpoor state policy that was prompting business to move to Pennsylvania, and that reduced demandÂ for space in New Jersey, Adler said. The faltering national economy and the lack of abundant trailer parking at the distribution center also were to blame, he said.
ÂAny deals getting done right now are a good thing,Â he said. ÂAre things starting to thaw? Yes, people are starting to do business. Is it robust? No, but things are starting to get done.Â
Middlesex I is the first completed facility at Middlesex Center, where IDI plans to build a total of three facilities comprising 2.5 million square feet.
E-mail Evelyn Lee at [email protected]