Sansone, Brookfield Partner on 1.3 Million-Square-Foot Distribution Center in New Jersey
November 11, 2020

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Firms Seek Tenant for Facility Planned Near Turnpike Exit 8A; More Projects in Pipeline

By Linda Moss
CoStar News

November 10, 2020 | 5:37 P.M.

A new entrant to the Garden State’s booming industrial market and Brookfield Asset Management are partnering to develop a nearly 1.3 million-square-foot distribution center off New Jersey Turnpike Exit 8A, a major logistics hub.

Sansone Group, based in Clayton, Missouri, outside of St. Louis, and Brookfield, headquartered in Toronto, are planning the one-building facility, which doesn’t have a tenant yet, for an 85-acre parcel at 896-916 Cranbury South River Road in South Brunswick on the border of Monroe Township, Jeffrey Greenwalt, Sansone Group’s national director of industrial development, told CoStar News on Tuesday.

Brookfield acquired the site for $115 million in October, according to CoStar data. Brookfield didn’t respond to an email and phone call seeking comment.

The South Brunswick project represents Sansone Group’s first deal in New Jersey and its first partnership with Brookfield, according to Greenwalt. But it has more projects lined up in the Garden State.

The U.S. industrial market has been going gangbusters during the coronavirus pandemic, and New Jersey is one of its strongest centers because of its proximity to New York City and location within a densely populated region. Industrial was already a white-hot sector before COVID-19, with the rise of e-commerce and giant Amazon. But that trend was exacerbated when the coronavirus stay-at-home orders sparked even more online shopping.

Amazon Country

Seattle-based Amazon has a number of distribution centers in New Jersey and has continued to expand in the state this year.

“New Jersey is one of the large industrial hubs in the Unites States, and the Exit 8A market, which is where this site is located, is nearly centered between Manhattan and Philadelphia along the New Jersey Turnpike,” Greenwalt said. “So you have tremendous access to the populace of both Manhattan and Philadelphia, as well as on down the coast to D.C. and beyond.”

Sansone Group and Brookfield are so confident about the strength of New Jersey’s industrial market that they join with other developers who have built large distribution facilities on speculation, or without having a tenant for them.

“What’s happening in the market as a whole is just that the e-commerce drive, and the change in logistics based on e-commerce … was accelerated because of COVID, so there’s a tremendous demand currently for space in these major markets, New Jersey being included,” Greenwalt said. “So we’re very confident that the space will lease very quickly upon completion.”

New Jersey has seen record low industrial vacancy rates, and the supply of space is outpacing the demand. In the Exit 8A area, the industrial vacancy rate is 4%, according to CoStar.

“Developers targeting the New York metro have favored Exit 8A for new logistics projects,” CoStar said in its most recent report on that area by the turnpike. “The submarket ranks near the top of all submarkets in [square feet] delivered in this cycle, benefiting from location advantages and strong demand. Close to 10 million [square feet] has delivered since the start of 2016, which accounted for roughly a 15% inventory expansion.”

‘Big Claim’ in Jersey

Sansone Group, founded in 1957 by Anthony Sansone Sr., does property and facility management, brokerage, land investments, and the development and redevelopment of retail, industrial, office, recreational and multifamily properties. The company has developed over 20 million square feet of industrial projects in 26 different states, including warehouses and distribution properties, truck terminals, manufacturing and refrigerated warehouses, according to the company’s website.

The company hired Greenwalt in July last year to spearhead its expansion in the industrial market, and the move into New Jersey is part of that growth.

Sansone Group is just getting started in the Garden State, according to Greenwalt.

“We’re making a big claim in New Jersey,” he said. “We have a couple of other projects that total another 2 million square feet that will also be built on spec.”

Sansone Group has put together a U.S. development pipeline of more than $1 billion in projects, representing 16 million square feet, in the last year and a half, Greenwalt said.

“So we’ve been very active,” he said.

Construction in South Brunswick is slated to start next spring, and the building will take about 10 months to complete. REBusinessOnline.com first reported on the development.

Greenwalt declined to disclose the estimated cost of the South Brunswick project, or to identify the broker being retained to market the property.

“This is our first project with Brookfield, yes, and we’re working on some other things with them currently,” he said.

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