A two-phase plan to redevelop 12 acres at the Metropark train station in Woodbridge would include more than 60,000 square feet for a Hackensack Meridian Health and Wellness Center, plus a new headquarters for the hospital system, along with 235 apartments developed by a partnership of Russo Development, Onyx Equities and Terminal Construction. — Rendering by MHS Architecture/Courtesy: HMH
By Joshua Burd
It was quietly one of New Jersey’s largest office leases of 2022, but there was something equally if not more notable about Hackensack Meridian Health’s nearly 100,000-square-foot deal at 650 From Road in Paramus.
Yet another hospital was giving a lift to an asset class that had slumped in recent years.
“I think you’ve seen it everywhere,” said John Saraceno, co-founder and managing principal of Onyx Equities, which owns the Paramus building. “As the office market has contracted, the only thing that’s replaced it as a use type is health care, not only on the office side, but on the retail side.
“You can’t go to a shopping center that doesn’t have an urgent care, a pediatric dental unit, an eye unit — you name it — so medical is an enormous part of the redevelopment of commercial space in the state.”
Little did anyone know at the time, it was also one of several steps on the path toward the transformative, pioneering project that will soon take shape at one of New Jersey’s busiest transit hubs, in Woodbridge, where plans call for a new office and ambulatory care center for Hackensack Meridian Health, luxury apartments and retail space. The health care network unveiled those plans in early March at a groundbreaking at Metropark station, joining Gov. Phil Murphy and a team that includes Russo Development, Onyx and Dinallo Development.
It was a ceremony that, in some respects, was only 18 months in the making. Yet it was the product of relationships that had formed years earlier at the upper levels of New Jersey’s real estate and health care sectors. Those connections — along with what the developers say was just good timing — are now helping to make good on years of planning by state and local officials to activate Metropark’s underutilized surface lots.
“We felt like we had the right team with all the right skillsets,” said Ed Russo, CEO of Russo Development. “And for us, we feel fortunate to be part of it because the real key stakeholders here are the state and NJ Transit — because it’s their asset, it’s their train station that’s the impetus for development here — and Hackensack Meridian. Without that anchor tenant, projects like this are very difficult to get built today.”
Slated to open around fall 2025, the building near Route 27 and Wood Avenue South will include a health and wellness center spanning more than 60,000 square feet with a host of primary and specialty care services, as well as 142,916 square feet of office space for HMH’s new headquarters. The $200 million facility, which was touted as the first of its kind for a suburban transit hub, will give way to a second phase with 235 apartments and retail space.
“This is truly going to be a unique environment,” Hackensack Meridian Health CEO Robert C. Garrett said at the March 8 groundbreaking ceremony, citing the presence of both a health facility and apartments at a station that serves 1.5 million passengers annually. That will make for “a tremendous access point, a tremendous health care facility for patients, for physicians and for all of our team members.
“With this kind of a project, it brings to us more care options for the communities that we serve, it creates seamless connections between providers and patients,” Garrett added. “It’s certainly very innovative and we certainly hope that we provide the latest and the most innovative care at a facility like this. And it also makes health care more affordable because, let’s face it, health care is more expensive when it’s provided within the four walls of a hospital, so we really need more of these health and wellness centers.”
The buildings will rise on a 12.4-acre lot directly adjacent to the Northeast Corridor rail line, which state officials have pushed to redevelop in recent years. That prompted NJ Transit in fall 2020 to solicit statements of qualifications and expressions of interest from developers, a pool that would include the DOR Woodbridge LLC team of Dinallo, Onyx and Russo as well as three other finalists that were asked to submit proposals.
As Russo noted, each member of the DOR team was well known and well versed in Woodbridge. Russo and Onyx had partnered nearly a decade ago as they set out to reposition the iconic Hess tower at Route 9 and Main Street, with plans to redevelop more than 20 acres of excess land nearby. The site today includes 500 apartments and some 20,000 square feet of retail space.
Dinallo, also a longtime partner of Russo, brings its own experience with NJ Transit through its Terminal Construction Corp. affiliate. That includes building parking decks at Metropark, along with its work on the massive Secaucus Junction station.
NJ Transit announced in October 2022 that it had picked DOR Woodbridge as its developer for the Woodbridge property. Having Hackensack Meridian as a tenant “wasn’t obvious immediately,” Saraceno said, yet it would become a distinct possibility in the weeks and months that followed. Russo, Onyx, Terminal and HMH are all longtime business leaders in and around Bergen County and active supporters of organizations such as the Meadowlands Chamber and the Meadowlands Area YMCA, creating a level of familiarity that could only help such a deal.
Nor did it hurt that Onyx and HMH had done business directly in their 2022 lease at 650 From Road in Paramus (where the provider has since expanded by more than 60,000 square feet, to nearly 162,000 square feet). The site today is its largest ambulatory health and wellness center and one of three that it has opened in the last three years.
“That’s where it started, and we sort of built on that,” Saraceno said.
The hospital network, whose footprint stretches from Bergen County to the Jersey Shore, has been headquartered in Middlesex County since after the 2016 merger of Hackensack University Health Network and Meridian Health. Its presence near Metropark has grown to some 244,000 square feet across three buildings on Thornall Street in Edison, less than a half-mile from the train station, but HMH nonetheless had several real estate needs.
Chief among them was the need for a substantial new medical office facility in the region, according to Jose Lozano, executive vice president and chief growth officer for Hackensack Meridian Health, but existing options were scarce and new construction was too costly. The other challenge? Its three corporate offices in Edison and two satellite locations in Monmouth County “needed a consolidation in this post-COVID world,” he said, adding that “we needed to be under one roof” to successfully chart its long-term strategy.
“I was trying to solve for two problems at the same time,” Lozano said, and the Metropark project provided “an economies of scale strategy” by building the clinical space downstairs and the corporate offices above. Importantly, the community health care space and the transit location also opened the door to the state’s Aspire tax credit program, which is meant to provide gap financing, making the overall project more financially feasible.
“Metropark offers Hackensack Meridian Health the amazing opportunity to expand access to quality care by meeting patients in a convenient location they pass through daily,” Lozano said in his official remarks at the groundbreaking. “It also allows HMH to offer an energetic, sustainable and accessible workspace for our team members in a great location, complete with mass transit, retail and health care, allowing HMH to continue to attract top talent from across the Northeast.”
Saraceno, for his part, credited Lozano and Garrett for rallying HMH and its board around the plan at Metropark— and for unlocking a project that, at the behest of Woodbridge Mayor John McCormac, needed a commercial user before any multifamily construction took place.
“To be completely frank, 18 months ago we were standing here and we were highly skeptical as to whether or not this was ever going to be a reality, knowing how hard it would be to find an office tenant or any commercial tenant,” Saraceno said. “And then, as luck would have it, a couple of conversations, a couple of brainstorming events and, all of a sudden, we had a tenant.”
He added: “Hackensack is the unicorn.” And DOR Woodbridge secured the lease — which was brokered by JLL’s Dan Loughlin, Ron Simoncini, Joe Messina, Jonathan Ortiz, Tom Stanton and Matt Loughlin — before the team was ever able to bring the building to market. Nor had the developers done any design work beyond a preliminary massing for the RFP.
“It was a concept with a hope, but we knew it was going to be a really tough lift,” Saraceno said. “And to sit here and think that shortly thereafter we have an announcement like this is truly miraculous.”
On March 7, a day before the groundbreaking ceremony, the state Economic Development Authority approved a 10-year, $113.65 million tax credit to support the development. Officials noted at the time that the project checked several boxes under the Aspire program, including its focus on a transit hub and on providing community health and wellness services.
The six-story, 235-unit residential building will also include 47 units for lower-income residents, accounting for 20 percent of the project. It was among several reasons why Murphy said he was “honored that the state can play a role here” by way of the Aspire tax credit and its push to better utilize the Metropark site.
“This is a station that I’ve known well forever,” the second-term governor said. “And I’ve always thought of it, if you’ll forgive the phrase, as an uncut gem with an enormous amount of upside and opportunity that has felt for decades like it was just out of our reach. And that is changing and changing happily for the better.”
Beyond Metropark
Even for a project that was praised as the first of its kind, the new Hackensack Meridian Health and Wellness Center at Metropark is the latest sign of the health care industry’s growing role in construction and redevelopment in New Jersey.
That includes a host of other high-profile facilities such as RWJBarnabas Health’s new 229,000-square-foot ambulatory medical pavilion in downtown New Brunswick, slated to open this spring under a project by AST Development. That’s not to mention the health system’s new 520,000-square-foot Jack and Sheryl Morris Cancer Center in the city that’s on track to debut in summer 2025, creating the state’s first freestanding cancer hospital.
“You heard Bob Garrett say, ‘Get it out of the hospital and bring health care to the community,” said Jon Schultz, Onyx Equities’ co-founder and managing principal, referring to Hackensack Meridian Health’s CEO.
“You’re not just seeing it with them. You’re seeing it with all health care systems around the state. It’s almost like when the drug stores would come in and go on every corner. I think they want to make it easily accessible to the community, which is driving all of this.”
A recent report by JLL pointed to what will be a “significantly” growing need for outpatient health care services as the tristate region’s population ages in the next five years. That segment has already grown 33 percent since 2010, the firm found, creating a need for modern facilities that will also help streamline costs while attracting top health care talent.
Hackensack Meridian, for its part, already had more than two dozen ambulatory care sites under construction or in development at the time of its groundbreaking at Metropark in early March, including some at several high-profile commercial real estate properties in New Jersey. Look no further than its planned 80,000-square-foot medical office facility in Clifton, at Prism Capital Partners’ mixed-use ON3 campus, as well as a new ground-up ambulatory care center that’s coming to Bergen Town Center in Paramus.
“Hackensack Meridian, in addition to Metropark, now has more shovels in the ground than ever before in its history,” Garrett said at the March 8 ceremony. “That is really unprecedented and will provide great access to care throughout our state.”
