As businesses around the state shut down in early April in response to a growing pandemic, one new project was just getting started.
Construction on 8 Forrestal Road South, on Princeton University’s Forrestal campus across from the Penn Medicine Princeton Medical Center campus, began on April 21.
The developer, 11 Forrestal Road Associates LLC, had originally broken ground on the site in 2017, explains managing partner Vic Angeline. “There were some environmental problems relating to the road that was put in for Life Time Athletic [at 7 Forrestal Road South] that had to be cleaned up before we could continue building there,” he says.
“We were going to start April 1,” Angeline says, “but we didn’t start until April 21 because we wanted to make sure we were only doing outside work.”
There are currently two people working on the 5.33-acre lot. “It’s all outside and very limited manpower,” he says. “We’re also doing all of our project meetings by Zoom.”
Angeline expects inside work to begin in the fall. With social distancing guidelines in place, only one trade works at a time in a given space, so, for example, working on carpentry, electricity, and plumbing has to occur sequentially rather than concurrently. Accordingly, the finish date for the project was pushed back by four months, to the third quarter of 2021.
“It’s going to take 16 months to build instead of 12 months just because we don’t know what’s going to happen,” he says
The state-of-the-art medical office space will be a sister building to 10 Forrestal Road South, which opened in July, 2014, and was also developed by Angeline and his partners, Dan Siegel, Vince Visceglia, and John Visceglia. That two-story, 40,000-square-foot building has been fully leased with 10 tenants in place since its opening.
The new building at 8 Forrestal Road South will also be two stories and 40,000 square feet. “It has a similar architecture that the Forrestal campus approved that will kind of marry the architecture of 10 Forrestal Road South and Life Time,” Angeline says. “The university is very much about the symbiotic relationship of buildings.”
“Our other building has had 100 percent occupancy since 2014. So we’re basically copying that same concept,” Angeline says. Currently two tenants have signed on for a total 11,000 square feet.
Angeline, who has worked on the development of 35 medical buildings across three states, notes that all of the buildings are 95 to 100 percent occupied. And he says he is not concerned about the growth of telemedicine reducing the demand for medical office space.
“These buildings near a hospital campus are not going to be ones where telemedicine is run,” he says. “Most of the doctors in these buildings are specialists” — including plastic surgeons, fertility specialists, and endocrinologists — whose practices “don’t really lend themselves to telemedicine.”
The spaces at 8 Forrestal Road South will be built to tenants’ specifications. “We are turn-keying most spaces for everyone,” Angeline explains. “Before they sign a lease, we’re telling them to the penny what it’s going to cost them.” The costs of any overruns are borne by the developer.
Leases can be for spaces as small as 2,000 square feet and as large as 20,000 square feet, but Angeline expects the completed facility to have eight tenants averaging 5,000 square feet each. Kim Kretowicz of Colliers International is the broker for the property.
And while the space doesn’t come cheap — rents start at $27 per square foot, excluding taxes, insurance, and common area maintenance — Angeline notes that it is less expensive than space at the hospital campus across the street.
“Our price is significantly lower than the hospital building campus price,” he says, adding that rent is about 25 percent lower. “We don’t have the huge expense of parking decks and everything else, since we have all grade parking. And we bought this land with options quite a while ago, so our land price is not as high as the hospital land price.”
“Even though we’re in a difficult time frame we’re pretty confident that by the time we get that building up we’ll be substantially if not fully leased,” Angeline says.
— Sara Hastings