After Merrill Lynch’s property had been on the market for six months, its 50-acre Scudders Mill campus sold for $122 million. The buyers are an investor group headed by two Princeton University graduates, Anthony P. DiTomasso Jr. and Russell F. Warren Jr, principals at Ivy Realty, based in Montvale.
The just-announced deal, which closed in March, prices the 685,000 square-feet of space in existing buildings at $107 million or $156 per square foot. A separate deal, to close later, earmarks $15 million for the rights to develop an additional 700,000 square feet on 54 acres, at a cost of about $20 per foot. Andy Merin of Cushman & Wakefield represented Merrill Lynch in the transaction. Merrill Lynch developed the corporate headquarters facility, which is located in the heart of the Princeton Forrestal Center, in phases from 1984 through 1992.
The buying company, Ivy, owns, managers, and leases a four-million square foot portfolio in the tri-state area. It targets investment opportunities in undervalued, high-grade, income-producing commercial properties. “The Princeton office market is one that we have been following for years and we are confident this is the right time to purchase such a prime facility as the Merrill Lynch headquarters campus,” says DiTomasso, Ivy’s CEO. “This acquisition is an example of the high-quality, well-positioned properties that we are looking to add to our growing class-A office portfolio.”
“800 Scudders Mill Road is a true world-class facility that will draw prospective users from not only the local Princeton area, but also nationally and internationally because of its complete on-site amenity package, internationally known location, and exceptional work environment,” says Warren, Jr., chairman of Ivy Equities.
Warren is a native of Greenwich, Connecticut, where his father is the orthopedic surgeon for the New York Giants. DiTomasso and his three brothers were football stars at their high school on Staten Island. DiTomasso’s father had left the New York Police Department to open a road construction company. Warren lives in Greenwich, and DiTomasso lives in Ridgewood: both have three children.
Football was the first bond between Warren and DiTomasso. In 1985, when Warren was a freshman football player, he met DiTomasso, football team captain, at Princeton’s training table. Warren developed a chain of sports medicine rehabilitation centers, took it public (as one of the youngest CEOs on Nasdaq), and then sold it to HealthSouth. Along the way he started doing business with DiTomasso, who had earned his law degree from Seton Hall, then worked for another real estate firm, Sorce, before opening his own.
They formed Ivy Equities in 1996 as a diversified investment company offering high net worth investors and institutions opportunities to invest in commercial real estate and private equity. Its three business lines are real estate, private equity and a NASD registered broker/dealer, First Ivy Capital Markets.
Ivy Realty has completed over $800 million in real estate investments. Ivy Capital Partners is the general partner Healthcare Capital, a $30 million dollar private equity fund focused on companies in the orthopedic sector.
“The early 1990s was a very distressed period in real estate,” says Warren. “When I sold my company in 1996, Anthony and I decided it was the right time to acquire buildings, and we put Ivy Equities together.” Other investors in the firm are institutions and pension funds.
Bristol-Myers Squibb sold its Scudders Mill Road property in October, at considerably more than its assessed value, and the Merrill Lynch price was considerably less. Did the buyers consider this a distressed property? “We are not out there to overpay for things,” is their reply. “And we are looking for long term value.”
Plainsboro Township is trying to raise the B-MS property’s assessment on one hand, and it is fighting an appeal from Merrill Lynch to lower the assessment on the other hand. Merrill Lynch is paying nearly $3.9 million in taxes this year and has brought three years of tax appeals before Judge Gail Menyuk in New Jersey Tax Court.
Ivy’s Warren and DiTomasso say that lowering the assessment was not the focus of their transaction.
Robert Sheehan, township administrator, is confident that the township will prevail against Merrill Lynch’s past and current appeals to reduce the valuations. Says Sheehan, “We don’t think the sale price reflects the full market value of the property.”
It is a sale-leaseback deal, not a straight sale. Forty-percent of the campus will be vacant next year when Merrill Lynch finishes moving out, and Black Rock (which bought part of Merrill’s business and occupies 60 percent) signed a five-year lease last year. (Black Rock, the asset management banking arm of PNC Bank, had bought Merrill’s asset management business.)
The township’s tax attorney, Rick Conley, says he knows of no cases for which a tax court has accepted a valuation based on a sale-leaseback deal: “We say that a sale-leaseback contract is not a fair indication of market value.” Andrew Merin of Cushman & Wakefield represented Merrill Lynch.
Because the campus was “purpose built” for Merrill Lynch, it has central systems and would have to be reconfigured to be used as a multi-tenant building. The buildings connect to the 364-room conference center that does not go with the package.
“Our aim is to make the tenants happy while they are occupying the space, and of course we would love to have Black Rock stay for a longer term,” says DiTomasso.
“It is a great campus, a world class setting, and Princeton is an internationally known market,” says Warren. “It would be a great home for a large corporate user.”
Buschman to NKF
For 39 years John Buschman ran his own commercial real estate business, sometimes aligned with a larger company. In the 40th year he closed his firm to reopen in partnership with a national firm, Newmark Knight Frank. NKF owns a 51 percent share and the April 16 deal gave the three partners — Buschman, Tom Romano, and Steve Tolcash — a signing bonus and an ownership stake.
“I was never looking for a boss,” says Buschman. Over the years he had partnered with two companies that have since merged with CB Richard Ellis, Jackson Cross and InsigniaESG. Similarly, his most recent affiliate, GVA Williams, did not own part of his firm. “This is the first time I have been in true partnership with somebody else.”
“We were approached by NKF,” says Buschman. “They have an interesting platform to work off of, and the personalities clicked. This deal offered Steve and Tommy a future. It wasn’t a company purchase; we formed a new entity.”
The five person staff also includes Brian Rushing, James Murray, and Amy Jenkins, and Buschman plans to hire another half-dozen people in order to //cover territory further south and in Bucks County. Such an expansion will require a move, probably to a Class A building on Route 1 with a Princeton zip code. NKF’s other New Jersey office, in Rutherford, has 30 people.
GVA Williams New Jersey, based in Parsippany, currently manages more than 175 commercial properties occupying about 23.3 million square feet in the tri-state region. Newmark Knight Frank has 5,300 employees in 165 offices on six continents, and it manages or leases 100 million square feet of commercial space.
“NKF is one of top brokerage companies in New York, and we expect we will get a lot of business,” says Buschman. “We’re looking forward to making this a profitable operation. They seem like the right kind of people to make it happen.”
Newmark Knight Frank, 1009 Lenox Drive, Building 4, Suite 116, Lawrenceville 08648; 609-896-1600; fax, 609-896-1753. John H. Buschman. www.newmarkkf.com
Leasing at Carnegie Center West
One of the three new Class A office buildings in Princeton, 902 Carnegie Center, signed its third tenant. Wilmington Trust will move from Princeton Overlook to 8,664 square-feet at Carnegie West. Matt Malatich and Mark HIll represent the owner, Hilton Management LLC, and Jerry Fennelly and Andy Weinstein of NAI Fennelly represented the tenant.
Stifel, Nicholaus & Company had signed the first lease, and the third tenant will be Iron Bound Capital, which has leased more than 8,000 square feet and will move from Vaughn Drive.
The five-story building, on 10 acres adjacent to Princeton Market Fair and a Marriott Residence Inn, has a two-story atrium lobby, covered parking, a fitness room, cafe, and state-of-the-art communications and mechanical systems. A humidity controlled basement, for storage, is an unusual feature for this market.
Sean S. Murray heads the Wilmington Trust office, which offers diversified financial services with regional banking, wealth advisory, and corporate client services business units.
The other two new Class A buildings, at University Square and Campus Drive, have yet to announce tenants.
Hilton Management LLC, 194 Nassau Street, Princeton 08542; 609-921-6060; fax, 609-921-0939. George H. Sands/Jeffrey H. Sands, managing member. www.hiltonrealtyco.com
New in Town
American Disabilities Corporation (ADC), 812 State Road, Suite 103, Princeton 08540-1400; 609-430-2320; fax, 609-430-2331. Neil C. Tucker, managing director. www.ameridiscorp.com.
American Disabilities Corporation has opened an office in Princeton to sell medical products and supplies for disabled persons and caregivers, explains one of the firm’s two founders, Neil Tucker. “We’re in the business of misery reduction.” Tucker and his business partner, Paul Kurisko, have known each other since kindergarten.
After being approved by the Small Business Administration as a small business enterprise, they launched the business at the Small Business Development Center in Trenton a few months ago. “We have parents who are aging,” says Tucker, “and saw a need for real innovative and useful medical products to be brought to market.”
Although the firm does not manufacture its products, it “wraps and carries” thousands of products already in the marketplace that fit its criteria. The partners are focusing in particular on compression therapy and wound care, but they keep their eyes open for useful items. One offering, for example, is a portable wheelchair shower for people who don’t have a shower stall large enough to accommodate a wheelchair. The unit attaches to the kitchen sink and includes a basin that the wheelchair can roll into. When the shower is over, the item folds up into a 4 by 4 by 6-inch space.
“What makes us different from a typical surgical supply company is that we take a proactive position,” says Tucker. He goes into doctors’ offices and assisted living facilities to demonstrate products and talk about the resources available.
The partners also run an E-bay store with the same name. They are redesigning their business website for E-commerce and expect to roll out a web site dedicated to the caregivers, www.caregivers-oasis.com. “It will be an information portal for caregivers, family members, and clinicians, on stress management and self care,” says Tucker. “The operating theory is that you can only help other people if you can help yourself.”
Tucker expects a large market for his firm’s products. “There are 50 million disabled plus the rising tide of baby boomers plus the current senior market,” he says. Although the partners decided to start the firm in Mercer County — “we wanted it to be in the capital county first” — they are beginning to move out into Somerset, Middlesex, and Ocean. Their goal is to have name recognition and customers statewide.
The partners have different strengths. About Kurisko, who used to manage a chemical company, Tucker says, “He’s the operations guy,” and adds, “I’m the gregarious front guy.”
Tucker has a bachelor’s of science in health education in 1991 and master’s degree in education from the College of New Jersey. In addition to being a certified massage therapist, he did advanced training as a lymphedema therapist (treating the slight swelling in the arm that sometimes accompanies breast cancer) and sold compression therapy products for Lymphedema Products. His interest in this area has led to a new product, Lymphedivas, which is a designer compression sleeve to help these women.
— Michele Alperin
CDM at Princeton, 302 Carnegie Center, Suite 102, Princeton 08540; 609-716-4400; fax, 609-716-0749. Kyle Barich, president. Home page: www.clinedavis.com
A division of the ad agency Cline Davis & Mann, CDM at Princeton, plans an August expansion to 30,000 square feet at 210 Carnegie Center. Currently it has 22,000 square feet. With a New York headquarters on East 22nd Street in Manhattan, the company also has an office in Red Bank.
This agency has to its credit the Viagra commercial featuring Bob Dole, and its other clients have included Bristol-Myers Squibb, American Home Products Corp’s Wyeth-Ayerst division, Janssen Pharmaceutica, and Johnson and Johnson.
“We have grown dramatically since we have been down here, and as we take on more and more clients, we keep hiring. We moved here with three people and now have 70 people, says Kyle Barich. Barich, along with Gerry McLaughlin and Ashley Schofield, opened this office late in 1999.
“We expect to be at 90 by the end of the year.” Open positions are in account services, client service, and copywriting.
Princeton’s central location is a plus. “If you draw a circle with a 50-mile radius, people are coming from every direction,” he says. “We are trying to be respectful of people coming from the east and the north.”
Overall the firm has 850 people globally, including 600 in Manhattan and some in London. “But what’s nice is that the vast majority of our business is local,” says Barich. “Divisions of Johnson & Johnson (Janssen and Ortho McNeil) and Novo Nordisk are our biggest clients.”
Barich, director of client services, graduated from the University of Michigan in 1990 and managed two of the biggest growing Pfizer brands — Norvasc, the antihypertensive, and Cardura, another hypertension drug.
McLaughlin, the creative director of copy, is a professional writer with a sideline as an amateur magician. A graduate of the University of New Mexico, he has worked on product launches for Lipitor, Norvasc, Diflucan, and Neumega.
Schofield, creative director of art, has a degree from Syracuse and worked in magazines until she joined CDM, where she worked on commercials for Bain de Soleil and Ben Gay.
“We have a good relationship with Boston Properties. We have been able to break our lease and go to the next one,” says Barich.
Dilip Patel, the fifth Able Labs employee to plead guilty to conspiracy to distribute misbranded or adulterated drugs, is scheduled to be sentenced on August 16. He had been the quality control manager. According to published reports, on April 24 he told U.S. District Judge Susan Wigenton in Newark that he falsified records in order to keep his job.
Patel, 44, covered up the internal quality testing records for clorazepate dipotassium (for anxiety and seizures) and atenolol (for high blood pressure). The maximum sentence for this plea is five years in prison and a fine of $250,000. He is free on $100,000 bail.
Bohdan Paczynski, 67, on April 19. An astrophysicist at Princeton University, his work helped discover the first terrestrial planet found outside the solar system.
William Flemer III, 85, on April 22. Known for his plant introductions, until 1992 he was president of Princeton Nursery, founded by his grandfather, A service will be Saturday, May 5, at noon, at All Saint’s Church.
J. Sherman Cooper III, 57, on April 28. A motorcycle enthusiast, he was a salesman at his Coopers Cycle Shop in Hamilton.