Logistics firm NRS is building a new 490,429-square-foot distribution center at 1075 Secaucus Road in Jersey City. Francis Walsh (left), CEO of NRS, and Dean Brody, executive managing director with JLL, recently visited the site to discuss the speculative project. — Photo by Aaron Houston for Real Estate NJ
By Joshua Burd
Construction is underway on a project that will bring nearly 500,000 square feet of new industrial space to Jersey City, in a rare ground-up development in the submarket that will create the largest high-end logistics facility within five miles of the Lincoln and Holland tunnels.
Its developer, NRS, is a fourth-generation logistics firm that is well-versed in the real estate business, having built or operated millions of square feet during its six decades in business. It’s now seeking a tenant as it prepares to go vertical at 1075 Secaucus Road, where it will look to stand out in an area dominated by older buildings with low ceiling heights and footprints that are far less efficient.
“We feel we’re in a very good position because of the market and the location,” said Dean Brody, a broker and executive managing director with JLL, who leads the leasing team at the site.
Slated for completion in spring 2024, with March Construction as its construction manager, the facility will span 490,429 square feet with 40-foot clear ceiling heights and a location less than a mile from Route 1&9. Plans also call for 49 dock doors and one drive-door, along with parking for 445 cars and 40 trailers on a nearly 40-acre site.
Equally important: The property can draw from a labor pool in a region that includes the most densely populated cities in the country.
“We’ve got to make sure that, if we build a building, we’re able to put people in it,” said Francis Walsh, CEO of Lyndhurst-based NRS, echoing a mantra from the company’s past development projects. “What’s great about this property is we have a great labor force in the area — Jersey City, Union City, West New York and Secaucus, obviously. And for any tenant looking for a strike point to New York City (from a new facility), you can’t get any closer to the Lincoln Tunnel.”
It will be the newest piece of a site that was once a destination for dredged material from New York Harbor, under a massive federal project meant to deepen the waterway from 2004 to 2016. NRS purchased the 100-acre site from Rockefeller Group around 2007 and, some eight years later, sold roughly half the site to Scannell Properties for the development of a new 315,389-square-foot FedEx Ground facility at the south end of the property.
The remaining acreage served as excess trailer parking for a nearby NRS facility until 2020, when it opted to unlock additional value by building a new Class A warehouse.
It figures to do exactly that in a market that has normalized after its unprecedented surge during the pandemic, but is still tight by historical standards. That’s especially so in the 66 million-square-foot Hudson waterfront submarket, where industrial vacancy at midyear was 3.9 percent, according to data from CBRE. The firm also found that asking rents for Class A space in the submarket were just under $25 per square foot, trailing only Newark.
Walsh said his firm did not consider using the site for its own logistics business — long known as National Retail Systems — which is focused largely on picking up containers from nearby ports and transferring the goods to domestic trailers. That requires cross-docked facilities, he said, whereas the loading docks on the Secaucus Road building will be confined to one side and thus ideal for a warehouse user.
The leasing team has already fielded inquiries from would-be tenants, but expects interest to accelerate heading into the fall.
“A lot of tenants really start to pay more attention to it when they see the walls go up,” said Brody, who is marketing the property alongside JLL’s Rob Kossar. That was slated to take place around mid-September.
Subdividing the building is a distinct possibility, Brody said, noting that the submarket historically has attracted smaller to midsized users in the 250,000-square-foot range. It also speaks to a current trend in the asset class. According to JLL, leasing activity in northern and central New Jersey reached 7.9 million square feet in Q2, which was slightly below the pre-pandemic average of 8.3 million square feet. But the firm found that interest was especially strong in buildings of 250,000 square feet or smaller, noting that tenants in that range inked 13 new Class A deals during the quarter, higher than the quarterly average of 8.8 from 2016 to 2019.
As with many sites in northern New Jersey, the Secaucus Road property is within a one-day drive of roughly one-third of the U.S. population. It also allows users to get to and from Port Newark-Elizabeth without paying a toll, Brody noted, enhancing the appeal of a property that allows 53-foot trailers to move in and out without obstruction.
It all adds up to a strong option at a time when import cargo volumes at the Port of New York and New Jersey are on the rise.
“If you take those large numbers, it just bodes well for our market here and our location,” Brody said. “So we’re very excited that there’s just more containers coming in, which creates more demand for our property, and … we’re sitting right in the heart of a building to get them closer to the population.”
