University Prowls On Alexander Street

New at 731 Alexander

Corrections or additions?

These articles by Bill Sanservino and Barbara Fox were prepared

for the October 11, 2000 edition of U.S. 1 Newspaper. All rights

reserved.

Life in the Fast Lane: Alexander Road Construction

Alexander Road has become a hot spot for commercial

development, seeing the addition of some 750,000 square feet of office

space in a few short years. But the most significant project has not

yet even been built — a 316,000-square-foot behemoth at University

Square, near the corner of Alexander Road and Route 1, across from

the Carnegie Center. Ground was broken on the project last month.

Developer Reckson Associates Realty of Melville, New York, says that

the project is the single-largest speculative office building in

Princeton-area

history. The five-story building will feature a two-story atrium

lobby;

a modern fitness center; a first-class dining facility; and

teleconferencing

and boardroom facilities. It will be more than twice the size of most

Carnegie Center buildings, a third larger than 100 College Road West

(the metal and glass building just south of Forrestal Village), and

25 percent larger than the biggest building in College Park at the

Forrestal Center, 600 College Road.

The new University Square project is Reckson’s first "from the

ground up" construction in New Jersey. In 1998 Reckson entered

into an agreement with Matrix Development Group to acquire University

Square — a 131,000-square-foot, three-building complex — for

some $13 million. The deal also included 18 acres of adjacent land

for $5 million, or $16 per developable square foot, planned for the

construction of the new five-story building. Reckson said it would

proceed immediately with development of the parcel to take advantage

of Princeton’s 2.7 percent Class A vacancy rate. The company projects

total development costs of some $40 million and anticipates generating

a yield in excess of 12 percent upon stabilization.

"Upon completion of this development, University Square will be

a 441,000-square-foot office park located in one of New Jersey’s most

prestigious markets. This acquisition demonstrates Reckson’s ability

to identify unique opportunities to invest in and develop well located

Class A office parks within our target markets," says Mark

Schaevitz,

managing director of Reckson’s northern New Jersey division. The

company’s

core growth strategy is focused on suburban markets within a 50-mile

radius surrounding New York City. Since the completion of its initial

public offering in 1995, Reckson has acquired or contracted to acquire

approximately $915 million of properties comprising approximately

15.1 million square feet of space.

Reckson is one of the largest publicly-traded owners and managers

of Class A suburban office and industrial properties in the New York

Tri-State area (www.reckson.com). It has 189 properties, comprised of

some 19.6 million

square feet either owned and controlled, directly or indirectly, or

under contract. Among the 22 properties in New Jersey are the

435,000-square-foot

Giralda Farms complex in Madison, a 130,000-square-foot building on

River Road in Nutley, and the 120,000-square-foot Eagle Rock III

building

in East Hanover. As a real estate investment trust (REIT) Reckson

funds its projects with investors’ money, and University Square is

funded exclusively through Wall Street dollars.

Reckson’s Alexander Road building will be added to a

commercial corridor that has seen tremendous construction in the past

few years. But real estate is cyclical and an economic downturn like

the one experienced by the Route 1 corridor in the late 1980s and

early 1990s could result in empty buildings and plummeting rental

rates.

Given all the activity, the question begging to be asked is how much

development is too much? Have builders and developers exceeded the

demand for office space in the region? Will University Square turn

out to be the corridor’s newest species of white elephant, like

Crossroads

Corporate Center — a 104,000-square-foot building at Route 1 and

I-95 that stood empty for years before finally reaching full

occupancy?

Experts say no.

"Based on the demand over the last four years, University Square

should lease," says Walter Thomas, northeast regional manager

of the Patrinely Group, based in Bridgewater. His company’s newest

building is fully leased on College Road West and is currently

constructing

the bookend building at that location. "If you look at the window,

there is not much space coming on the market at that time."

Reckson also believes the market will support the new construction.

"Particularly in Princeton, we think there is actually a dearth

of available space, particularly high quality space," says Jeff

Schotz, senior vice president, managing director of Reckson Associates

Realty in Short Hills. "That has given us the confidence to go

forward on a speculative basis."

Schotz is marketing to tenants of 30,000 square feet (one-half floor

or more) at $32.75 per square foot plus electricity. He has no tenants

to announce yet but is "discussing the building with a number

of potential users." Bovis Construction has been hired as the

general contractor, and the estimated completion date is fall of 2001.

"The fact that it is the largest means nothing to us," says

Schotz. "The size is the maximum we were able to build on site.

We want the market to note the quality, that it will be the best

building

ever built in this location. We own 22 other buildings in New Jersey,

but this will be the first of what we call `ground up’ construction

that Reckson has done in New Jersey."

"If you’re a landlord in this climate, the good news is that you

are in a great real estate market. If you are a tenant looking for

quality class A and B space, there is also very good news," says

Schotz, "As a 20-year veteran of the commercial real estate

industry,

this market is one of the strongest real estate cycles I have ever

seen for both landlords and tenants."

University Square is the capstone to several years of

construction that has seen Alexander Road grow to similar proportions

as many major office parks. In the last year or so, no fewer than

10 new buildings have popped up on the Alexander Road landscape. The

largest recently-completed complex in the corridor is the Commons

at 7 and 9 Roszel Road, at the corner of Alexander. The Commons, is

comprised of a five-story 178,255-square-foot building and a

three-story,

113,745-square-foot building.

At 782 Alexander Road, a 12,800-square-foot building, completed at

the beginning of last summer, was used for an expansion by the New

Jersey Hospitals Association and is home to the company’s corporate

services.

A 47,000-square-foot, two-story building is going up at 693 Alexander

Road built by Compass Realty and Development. Formerly an industrial

facility, the home of the Rosenblad company, the building is being

renovated and a second floor added in a "French chateau"

design

that contrasts markedly with the typical chrome, brick, and glass

of modern offices.

Princeton Plaza, the Nexus Properties complex consisting of a

three-story

building and a two-story building, sits at 731 Alexander Road,

opposite

the intersection with Roszel. The 60,000-square-foot building at the

front of the site is home to several professional offices, including

the law firm of McCarthy & Schatzman (see next story). The

40,000-square-foot

building at the rear of the site is still under construction and is

targeted for a January, 2001, completion date

(www.nexusproperties.com)

According to West Windsor community development director Samuel

Surtees,

the developer is working with the Hillier Group — developer of

Alexander Park — to construct a pedestrian bridge over the Bear

Brook. The bridge will connect to a path that runs along the Dinky

Railroad tracks to University Square. In the future there may be a

railroad stop along the Dinky line at University Square — an

option

that has been discussed since the beginning of the Route 1

development (www.hillier.com)

At 791 Alexander Road, the final two phases of Alexander Park are

nearing completion. A five-building complex designed and developed

by the Hillier Group, the development includes a recently-completed

160,000-square-foot building housing Mathematica and Sibson & Company,

among others. The 72,000-square-foot 700 building, currently under

construction, will complete Alexander Park.

Princeton Junction Metro Center sits at the western corner of

Alexander

Road and Vaughn Drive at the Princeton Junction train station. The

phase one building at the rear of the site was constructed several

years ago. Phase three, a 35,000-square-foot building that fronts

on Alexander Road, was recently completed and will be the new home

of Bovis Construction. Phase two calls for a 97,000-square-foot

facility

between the two existing buildings.

Across from the Metro Center at the corner of Vaughn and Alexander

is the steel frame of Station Plaza, a 28,000-square-foot two-story

building owned by Nexus Properties. Completion is estimated for July,

2001. A Nexus representative says the developer is currently in

negotiations

with "a Fortune 500 company" as a tenant.

As building after building is stocked with new tenants, more and more

cars will appear on the area’s already burdened roadways. On Route

1, the state Department of Transportation has completed the Alexander

Road overpass and the new Meadow Road overpass, now under

construction,

should contribute to better traffic flow on Alexander Road.

Alexander Road itself was improved years ago based on West Windsor

Township’s plan for the area. According to Surtees, the township

enacted

the commercial zoning for Alexander Road in 1979 and many of the

buildings

there now were approved in the 1980s and early 1990s. Surtees says

the township professionals believe Alexander Road’s current

configuration

will be sufficient to handle all traffic from the office parks at

full buildout.

Unfortunately, the railroad bridge at Alexander and North Post roads

continues to operate at a failing level of efficiency. Motorists who

must travel through West Windsor’s roads to get to and from work on

Alexander Road are frequently in for a long wait at the bridge, which

backs up on both sides of the railroad tracks.

Financing to improve the bridge has finally become available, but

commuters shouldn’t hold their breath waiting for the bridge to be

reconstructed. Last year DOT finally claimed ownership of the bridge.

Currently the township is working with state Senator Shirley Turner

to "expedite" funding, says Surtees. But in the best-case

scenario, reconstruction of the bridge is many years away. Surtees

has said that it could take as long as five years before the project

is actually underway.

In the short term, West Windsor has allocated funds for improvements

at the intersection calling for the construction of turning lanes

in both directions and a traffic light where Alexander and North Post

roads meet. Construction of those improvements is not expected to

begin until sometime in 2001.

— Bill Sanservino

Top Of Page
University Prowls On Alexander Street

When McCarthy & Schatzman moved its law offices from

an 18th century Georgian house on Chambers Street, architect William

Wolfe adapted an Alexander Street building to give it both Georgian

and postmodern elements — an updated "fan" motif on the

portals and giant round balls on the outside steps.

Princeton University has bought this signature building, one of the

few that it did not already own on Alexander Street, and the law firm

has moved down the street to Alexander Road (the West Windsor name

for any part of Alexander past the Delaware & Raritan Canal). It is

located in a Nexus Properties building that retains the Princeton

zip code.

Its previous home had an eat-in kitchen for all the tenants, but in

the brand-new building at Princeton Plaza, 731 Alexander Road, the

two dozen employees are enjoying a new Merlin magic phone system with

all the bells and whistles and up-to-the-minute wiring, says Barbara

Nelson (Catholic University, Class of 1974). She and Michael Spero

(Rutgers, Class of 1971, and Hofstra) were the partners in charge

of the move. David R. Nelson, a former Geddes architect who happens

to be her brother, designed the 6,000-foot space. O’Gara’s Moving

completed the move on a weekend. "Now we have space for

expansion,"

says Nelson. All the other tenants at 228 Alexander have moved or

are moving soon.

With the purchase of the McCarthy Schatzman building, Princeton

University

has taken one more big step to its apparent (though not formally

stated

desire) to own the whole of Alexander. Springdale Golf Course runs

down one side of Alexander Street, and the university owns all the

borough properties on the "working" side and most of the

township

ones. The house at 106 Alexander — which houses dining services

staff and has a staff apartment — and six semi-detached housing

units are the university-owned borough buildings.

Township property begins at 120 Alexander. The university’s holdings

include the Grover Lumber building, the McCarthy Schatzman building,

the old Princeton Ballet building (now used for the environmental

health & safety offices), the grassy lot on the corner of Faculty

Road, the Helm Building, the former car wash building now rented to

Holt-Morgan-Russell Architects, and a small piece of Rusty Scupper’s

property.

The only properties that are not owned by the university: the

brick Wilson warehouse, Princeton Fuel Oil, the Marsha Child gallery,

Skillman Furniture, Soonja’s restaurant, three houses flanking the

entrance to the railroad station parking lot, Larini’s gas station,

two houses east of Faculty Road (including one in very bad shape)

and the courtyard complex housing the Princeton Pool & Patio Shop

and P.J. Kids.

But the university has a policy of not taking a building off the tax

rolls if it is partly used as residential or if it has outside

tenants.

"As long as we have an outside user, the university has chosen

not to partially exempt a building," says Carolyn Luttman Clancy,

director of real estate for the university. Because apartments and

houses at 132, 134, 148 and 150 Alexander are used for living space,

the university still pays taxes on them. And the Helm building went

off the tax rolls only when the last paying tenant (Charles Schwab)

moved out.

When the university does begin the process of taking a property off

the tax rolls, it moves gradually, by paying 90 percent of the tax

in the first year, 80 percent in the second year, and so on. When

the Helm building went off the tax rolls, four years after being

bought

by the university, it was assessed for $4,725,500. In 1999 it paid

$98,872.75 in taxes.

Because the use for the McCarthy Schatzman building at 228 Alexander

has not been determined, it is still on the tax rolls. Clancy expects

to put university users on the second floor of the building early

next year. "There is a lot of work to do; the HVAC is totally

gone and the roof leaks," she says.

McCarthy and Schatzman, 731 Alexander Road, Suite

201, Box 2329, Princeton 08543-2329. G. Christopher Baker, managing

partner. 609-924-1199; fax, 609-683-5251.

Here’s what’s been happening with other 228 Alexander Street tenants:

Capital Title Agency moves to 731 Alexander Road at the

end of October and is also opening a second location at 1 Nami Lane

in Quakerbridge Business Park.

Julius H. Gross Inc., the painting contractor, plans to

move to the Princeton Fuel Oil building.

Maloy/InsureHiTech.com Inc. is moving to 100-200 Village

Road at Forrestal Village, the former Bovis Construction Corp. space.

Opera Festival of New Jersey has moved to 29 Emmons Drive,

Suite G-50.

Top Of Page
New at 731 Alexander

Amper, Politziner & Mattia CPAs, 731 Alexander

Road, Box 7287, Princeton 08543-7287. Gerard Abbattista CPA,

officer-in-charge. Home page: www.amper.com

The Edison-based accounting firm has moved from Princeton Professional

Park at 601 Ewing Street to the 3,600 square feet in the new Nexus

building, Princeton Plaza, at 731 Alexander Road. The Buschman Group

represented the landlord. Designed by Kevin Blackney & Associates,

the building has an upscale oval lobby and walk-out bay windows. The

firm has 180 employees distributed among offices in Edison,

Flemington,

and Manasquan.


Next Story


Corrections or additions?


This page is published by PrincetonInfo.com

— the web site for U.S. 1 Newspaper in Princeton, New Jersey.

Facebook Comments