100-400 Nixon Lane in Edison — Courtesy: Avison Young
By Joshua Burd
Prologis Inc. and Dotcom Distribution, an e-commerce fulfillment provider, have signed a lease extension for more than 400,000 square feet of industrial space in Edison.
According to Avison Young, which represented the tenant, the complex deal at 100-400 Nixon Lane included a conversion from a traditional triple net lease to what’s known as a Clear Lease, a specialized offering by Prologis. The transaction will keep Dotcom in place at its longtime home, part of a four-building, 850,000-square-foot complex that’s minutes from the New Jersey Turnpike and other key highways.
Avison Young Principal Ed English, Senior Associate Paul Errigo and Principal Ron Ganter completed the assignment for Dotcom. Prologis leasing director Sarah Rutherford represented ownership in-house, with support from Marc Petrella of KBC Advisors.
“Asking rents in the area for quality distribution real estate have more than tripled in recent years and demand for large blocks of space is particularly strong,” English said. “Dotcom has been creating jobs and contributing to the local economy for more than 20 years, and it was incredibly rewarding to come to an agreement with Prologis that helps to keep their employees, customers, and operations in place.”
In announcing the deal, Avison Young said the space at 100-400 Nixon Lane has 36-foot clear ceiling heights. The transaction took more than nine months to complete, the firm added, but ultimately helped Dotcom avoid disruption and relocation costs and allows it to continue providing the storage, e-commerce and multichannel fulfillment services to its customers with the same facility footprint, layout and infrastructure.
AY added that, in recent years, Prologis has upgraded the premises, including the installation of rooftop solar panels on the buildings occupied by Dotcom.
“From an e-commerce standpoint, there are clear advantages to operating a warehouse close to major East Coast ports, highways and dense populations of online consumers, but this real estate market is challenging,” said Robert Coon, chief commercial officer for Dotcom Distribution. “We negotiated hard for nine months and did everything we could to keep costs as low as possible given the two adjoining realities: commercial space in this area is unprecedentedly expensive, and it’s worth it for us and for our partner e-commerce brands to be in this strategic location. Avison Young’s Occupier Solutions team supported us throughout the process, Prologis has been very amicable to work with, and we’re happy to have reached a win-win result and continue our tenancy.”
The deal marks the fourth time that Avison Young has negotiated the conversion of a traditional triple net lease to a Prologis Clear Lease, the team said.