One Million Square Feet Ready for Its Close-Up

Jessica Perry//March 16, 2007

One Million Square Feet Ready for Its Close-Up

Jessica Perry//March 16, 2007

Developer turns to Web cams in a wide-reaching effort to lease spaceMOUNT OLIVE – Eight months after purchasing a sprawling headquarters property in Morris County from chemical giant BASF, BPG Properties Ltd. is escalating its efforts to market the 1-million-square-foot Mount Olive facility in a bid to begin leasing space.

The Philadelphia-based real estate manager is casting a wide net in its search for tenants for the 155-acre Morris Crossroads Corporate Campus, the site of a five-building office complex that is currently the largest block of Class A office space in the New York metro area market, according to the company.

BPG is targeting the brokerage and tenant markets in both New York City and northern New Jersey, according to Vice President Chris Locatell. “But we’re also hitting on a broad basis as much as we can nationally and internationally,” he says.

To help broaden its marketing reach, BPG will be installing in the next few weeks a system of Web-based video cameras on the four interconnected office buildings and one amenities building that make up Morris Crossroads. The property is within the International Trade Center directly off Interstate 80 at the interchange of routes 206 and 46.

“We think [Web cams] will be a powerful tool to be able to bring people to the building via the Internet,” says Locatell. “We think this Web-based camera system will be beneficial for us outside of the [New York metro] region.”

“It’s a new concept,” adds Charles Hatfield, director of Cushman & Wakefield, which BPG has hired as the leasing agent for the property. “It certainly does not replace the upfront, personal approach to marketing. But it’s a new angle and it’s another example of this owner’s desire to do something different.”

Ten external cameras will show views of the surrounding areas, including the 2,440-acre Allamuchy Mountain State Park that is adjacent to the property. Also on view will be the main entrance, the parking structure and the property grounds. Five internal cameras will show the main lobby, the conference room, the cafeteria and the current office configuration.

“What we’re trying to get as best as possible is a total feeling of the building,” says Locatell. He says Morris Crossroads and another BPG property, the 320,000-square-foot Technology Center of Princeton in Princeton, will be the first buildings for which BPG will use live video for marketing.

Web cams aren’t meant to be used for every property, says Stephen Jenco, client services manager of Grubb & Ellis Co. in Fairfield. “You’re looking at Class A properties, a property that photographs well,” he says.

The Web-based camera system is the latest marketing strategy that BPG is employing to find occupants for Morris Crossroads. Along with Cushman & Wakefield, BPG has reached out to commercial real estate firms in New York City and northern New Jersey via in-person meetings, phone calls and advertising.

“Just because Cushman is our leasing agent, it doesn’t mean the tenant is going to be a Cushman client,” says Locatell.

In addition, BPG has hired the branding and graphic design division of San Francisco-based architectural firm Gensler Architects to create a two-and-a-half-minute movie and Web site presentation aimed at highlighting the features of Morris Crossroads to New York City office users.

“We’re just being about as aggressive as you can possibly be to go after the tenant base, domestically and internationally,” says Hatfield, who is based in Parsippany. “We’ve engaged our entire global network to try to find a tenant for this site.”

But getting the property occupied remains a challenge, says Hatfield. “The overall New Jersey office market is pretty slow, and there’s not a lot of large deals that are getting signed,” he says. “These days, to get a tenant to sign for half a million to a million square feet doesn’t happen quickly.”

“We’ve seen additional blocks of space on the market,” concurs Jenco. “It does create challenging conditions to look for prospective tenants.”

More than 113,000 square feet of negative net absorption occurred in the Class A office market in New Jersey during 2006, compared to three million square feet of positive absorption in 2005, according to Grubb & Ellis. Net absorption is the net change in occupied space between one time period and the previous time period. Negative absorption indicates that vacancies rose during the period.

BPG is promoting Morris Crossroads for a combination of front office and back office uses, according to Locatell. “We would lean toward that user coming from the financial services market right now, because that is the dominant growth engine in the region and one of the more sensitive user types to continuity concerns,” he says.

But he says BPG is not so much targeting an industry type as company size, and is marketing to any prospect with at least 400 employees that would lease at least 150,000 square feet.

Hatfield says BPG has exchanged proposals with five to seven potential tenants in the last six months. “We’ve received significant interest from larger firms that ended up signing deals or buying assets elsewhere,” he says. Those companies ultimately opted for space that was closer to their existing locations in the primary suburban office market along the 287 corridor between routes 78 and 80, he says.

The Morris Crossroads property, built in 1994 and expanded in 1998, served as the North American headquarters of BASF until 2004, when the German company downsized and relocated to its current location in Florham Park. BPG bought the campus two years later, renamed it and is currently renovating the main lobby and the exterior entrance, upgrading the conference and training facilities and adding a fitness center, among other improvements. Despite the construction activity, Hatfield says the campus is ready for occupancy.

Rents will start in the mid-$20-per-square-foot range, depending on tenant size and other conditions. Locatell hopes to have the building fully leased in two years. He says lease terms are negotiable, but will likely be for a minimum of seven to 10 years.

“We are able to offer this asset to the market at literally 80 percent less than New York City tenants would have to pay in midtown New York,” says Hatfield.

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