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November 25, 2008
 
       
 

RIVERBEND!


 

We thought we should show you we're broadminded enough to cover New Jersey, too, so the headline above refers to the name of the largest transit-oriented development in the state, located in Harrison. With site remediation under its belt, Advance Realty continues to move forward on it, and we stopped by the site to get the latest from COO Kevin Tartaglione.

 

The developer just finished removing more than 48k cubic yards of contaminated soil from the 35-acre land that once housed a steel pipe manufacturing facility, the first phase out of a total 85 acres. Advance is now ready to start the horizontal infrastructure construction of site utilities and roadways in time for the anticipated October opening of the 25,000 seat Red Bull Arena, a pro soccer facility currently under development (sorry for last weekend's loss to Columbus Crew). The developer is now accepting bids for the work, which it hopes to award in time for a January start.

 

Named for the nearby Passaic River snaking between Harrison and Newark, Riverbend District's first phase will include more than 800k SF of retail, a 16-screen cinema; 200-room and 350-room hotels; 1.5M SF of office and 1,800 for-sale and rental residential units. Vertical construction is expected to begin in early 2010 with an expected 2012 completion. Kevin tells us it's poised to become New Jersey's next bedroom community, as professionals get priced out of Hoboken and Jersey City and more want to move from suburbs to urban centers.

 

The district will mostly appeal to second-generation homebuyers and the younger demographic, Kevin says. Like hip Hoboken, it will have amenities and nightlife, but with the bonus of the nearby Prudential Center, Riverfront Park, New Jersey Performing Arts Center and Red Bull Arena (pictured). There are also 100k commuters who pass through Harrison; 6,000 daily parkers and 30k university students in nearby Newark. It has an onsite PATH station, undergoing its own $180M upgrade; nearby access to NJ Transit, Amtrak and all major roadways; and central access to Newark Airport (15 min.), Manhattan (20-30 min.), Philadelphia (1 hour) and Washington D.C. (3 hours).

 

When Kevin's not working on Advance's ledger of development and redevelopment projects, such as the The PARC office/research park located at the Picatinny Arsenal in Morris County, the father of four (all under eight!) stays busy by coaching his kids' baseball and football teams—and credits wife Jackie for keeping home life organized.


LEGAL ISSUES OF RIGHTSIZING
 

Real estate is one of the biggest wallet chompers when it comes to company expenses these days. In this market, more tenants are considering rightsizing to bring those costs down, but there are many legal issues to contend with, cautions Arent Fox's Jackie Weiss, with whom we recently caught up in her 1675 Broadway office.

 

Jackie with colleagues Karen Candreva and Faige Klein. There are many provisions in lease agreements that can potentially affect rightsizing decisions, Jackie says, such as termination options, sublease rights and the landlord's right of recapture. Tenants should avoid giving up too much space in case of future growth. That's why lawyers, brokers, architects, engineers and HR departments should work together to help tenants analyze their needs. This is happening often enough that some real estate companies are introducing specific rightsizing teams.

 

One misconception many tenants have is that the landlord will not help them, Jackie says. But they are often willing to work with the tenant to avoid the problems of the early '90s, when it was a workout war zone. But do expect a new wave of lease rightsizings, workouts, and restructurings of other transactions, especially as older CMBS loans mature; Jackie is training and preparing her firm to hit the ground running when they crop up. There are many Gen X and Yers in real estate who haven't had the pleasure of dealing with a workout before, keeping Jackie plenty busy in the coming months.

 
 
Leo A Daly
 
Arent Fox
 
Reznick Group
 
Pillsbury
 
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