C&W: Pharma driving New Jersey office leasing in 2018
Teva Pharmaceuticals isn’t the only life sciences company to impact New Jersey’s office market this year, as several others have inked sizable leases to expand or upgrade their space.
Experts with Cushman & Wakefield touted several recent deals involving pharmaceutical firms, reinforcing the demand from an industry with deep ties to the Garden State. In Paramus, the firm represented Octapharma in a 64,000-square-foot lease at 117 West Century Road, while also representing the ownership team of Onyx Equities and Garrison Investments.
In addition, C&W represented Integra LifeSciences Corp. in its 166,791-square-foot headquarters lease at 1100 Campus Road in Plainsboro. In Morristown, the firm served as the leasing agent in an 84,000-square-foot lease by Alvogen, a 9-year-old pharmaceutical firm, at 44 Whippany Road.
Dan Johnsen, a managing director with C&W, said the activity reflects the idea that life sciences companies continue to value New Jersey’s talent pool, accessibility and the availability of state incentives. But the recent deals also show the appeal of high-end buildings in the state’s suburban markets, which are often overshadowed by urban, transit-oriented locations.
“Once you run the ZIP code analysis and the labor studies, all of the lights go off in the suburbs,” said Johnsen, who represented both Teva and Octapharma in their recent deals. “The suburban locations definitely offer the easy access to the majority of their workforce. And when HR and these companies are making a decision, that’s really what they have to focus on.”
That was especially evident in Teva’s recent 345,000-square-foot commitment at 400 Interpace Parkway in Parsippany, also known as MCCBLUE, under a lease with P3 Properties. The Israel-based generics company is consolidating several locations and moving its U.S. headquarters from Pennsylvania, thanks in large part to a 10-year, $40 million tax credit package from the state.
As such, Johnsen said New Jersey stood out when it came time to consider Teva’s plans for its workforce.
“At the end of the day, it is a special place where a company can come here and go hire a thousand educated people,” he said. “You can’t say that for too many other locations.”
A team of JLL brokers led by Frank Recine, Timothy Greiner, Blake Goodman and Fred Hyatt represented P3 Properties in the deal, the state’s largest office lease to date in 2018.
Incentives also played a role when Integra LifeSciences, a global medical technology maker, committed to a 166,791-square-foot expansion and relocation within Plainsboro. The C&W team of Robert Rudin, Marc Trevisan and David Sherman, along with a Boston-based team led by Rory Murray, represented the tenant, while Newmark Knight Frank represented ownership.
In Paramus, C&W’s Marc Trevisan, David Sherman, David DeMatteis and Mark Zaziski represented Onyx and Garrison Investments in the lease with Octapharma, which is relocating from Hoboken. Meantime, C&W’s Bill Brown, Jon Williams and Heather Polhamus represented Marcus Partners in Alvogen’s lease at 44 Whippany Road, while Gregg Kelman of GK Realty Services represented the tenant.
At midyear, the C&W research team had tracked more than 564,000 square feet in office activity involving life sciences tenants.
“That impressive statistic represents 11.4 percent of the state’s total office leasing through the first six months of the year,” said Jason Price, director of tristate suburbs research for the commercial real estate services firm. “Add the Teva Pharmaceuticals transaction and other sizable office deals in the pipeline, and the influence of life sciences in 2018 will be even more marked by the end of the third quarter.”