Revitalizing NJ: Somerset's 2M SF Bell Works Redevelopment
Odds are, you’ve never heard of Symbolic IO. But the tech startup, which has not yet sold any products, is the first company to close on a lease at Bell Works, the 2M SF mixed-use office redevelopment by Somerset Partners in Holmdel, NJ (shown below, pre-redevelopment). The massive project will also be the site of Bisnow's Revitalizing New Jersey event on Aug. 5, starting at 8am.
Somerset president Ralph Zucker, who'll be a speaker, tells us the 42,500 SF lease, which closed within the past week, was repped by the Garibaldi Group’s Jeff Garibaldi, Tara Keating and Kyle Mahoney. Symbolic founder and CEO Brian Ignomirello says his company’s $130M valuation is the highest pre-revenue figure in history for an East Coast-based tech company and the second-highest for any tech company. Brian, a former Hewlett Packard CTO, says Symbolic counts Micron, Intel and Q Logic among its technology partners for the new venture, which will be announced later this summer.
So, the $64,000 question: In the era of live/work/play, where attracting young talent is everything, why would a company like Symbolic choose to set up shop in a suburban community like Holmdel, with only 17,000 residents and no central downtown area? The answer: They’re building it, says Ralph. Or, more accurately, retrofitting the existing Bell Works building (atrium shown above) and some of the surrounding grounds to serve as a central gathering point in a town where “there’s no there there,” he says. Somerset’s had eyes on a redevelopment to change that since at least 2008, and bought the site in 2013 from Alcatel-Lucent for $27M.
Holmdel mayor Eric Hinds, who's also a speaker at our event, tells us at its peak, in the late ‘80s and early ‘90s, there were around 6,000 people employed at the site—mostly in high-paying telecom jobs. The building, designed by Eero Saarinen in the early ‘60s, has a storied past as the home of Nobel Prize-winning research at Bell Labs, its longtime sole occupier. (Key parts of the discovery of the Big Bang Theory happened there.) Those were boom times for the whole area, says Rutgers Bloustein School of Planning and Public Policy dean Jim Hughes, also a speaker. Jim tells us 80% of all the office inventory that had ever been built in the State of NJ as of 1990 went up throughout the ‘80s. Shown above: the building's future lobby.
But it didn’t last. Eric says that from about 1990 to 2004, tax revenue coming into the township coffers from the rent roll at Bell Works plummeted from roughly $5M a year to $500k. The immediate area did alright as the jobs left, largely because of a lot of Wall Street execs living there (Eric’s a SVP of wealth management at Merrill Lynch himself). Holmdel even came in No. 1 on Money’s list of six-figure towns in ’09. But in the office market, NYC’s ongoing boom has had a direct corollary in the Garden State. The state, which is “hemorrhaging companies,” he says, is relying on tax incentive programs as one means to keep them. Symbolic IO’s lease, in fact, while signed, has one hurdle left to clear: the company will only go through with its move to Bell Works if it's approved for benefits through the Grow NJ program, which aims to keep tech and other high-paying jobs in the state. Shown above: Bell Works' front entrance, prior to the redevelopment.
Six years after the last boxes were carted out of the building in 2007 and Alcatel-Lucent closed up shop for keeps, Somerset acquired the site with an ambitious, $200M redevelopment in mind. Some have said the project as conceived could never succeed in a setting like Holmdel. The closest public transit stop isn’t quite within walking distance, and the train ride to the city takes around 45 minutes. Eric tells us that beyond a few chain restaurants, a senior center and a library that he calls inadequate, there’s no public gathering place in town at all. In the six years the project’s been seeking approvals, he says some aspects caught flack from locals. “We were told, ‘Holmdel isn’t Philadelphia,’” he says, referring to the reaction from local residents to a plan that called for urban-style townhomes lining the ring road on the outskirts of the property. That part of the plan was scrapped, and now Toll Bros is developing 185 carriage homes for adults 55 and over and another 40 single-family homes on lots of at least an acre. Ralph tells us several LOIs are out, ranging from 7k SF to 250k SF, with gross asking rents for office space ticking in at $27.50/SF. Three restaurants, a nationally branded coffee shop and a 10k SF daycare center are in talks for space. Rendered above: the redesigned atrium.
“This is not a mall, it’s a Main Street,” Ralph says. “So you need a carefully selected tenant mix: the right retail and amenities, and a lot of tech tenants but not just tech tenants.” Negotiations are underway to bring a 250-key hotel and conference center to the site. Ralph tells us there’ll be also be a surgery center, and the possibility of other medical facilities. As for getting there: Ralph mentioned a plan for a shuttle from the nearest NJT station, and eventually a free bike share open to all, but he acknowledges it’ll still mostly be a drive-everywhere scenario, even when fully realized (rendered above: an outdoor plaza at Bell Works). The target date for first occupancy is Q1 next year and, according to Ralph, by mid-2016 the project’s on target to have 150k SF occupied with more on the way. To see more and learn more, please join us for Bisnow's Revitalizing New Jersey event on Aug. 5, starting at 8am. Register here.