Jeff Garibaldi Discusses Bell Works Office Leasing Strategy with Globest
HOLMDEL TOWNSHIP, NJ—In mid-July, Somerset Development signed iCIMS Inc., a human resources software company, as an anchor commercial tenant at Bell Works, its massive adaptive reuse project in Holmdel, NJ, (the former Bell Laboratories, where ALM Real Estate Media and GlobeSt.com will host the RealShare New Jersey conference this Wednesday).
The 345,000-square-foot headquarters lease with an option to expand brought the office component of Bell Works to nearly 60 percent pre-leased in under two years of being on the market. Currently, there are eight commercial tenants with approximately 300 employees already working at the facility with iCIMS scheduled to move in during summer 2017.
Globest.com connected with the lead broker representing the Bell Works developer, Jeffrey J. Garibaldi Sr., president of The Garibaldi Group, on the strategy and backstory to landing iCIMS and other tech firms to the mixed-use project. Tara Keating and Kyle Mahoney are an integral part of the leasing team and the three of them have been working on the Bell Works project since its inception.
Q: You have been in the commercial real estate business for nearly 40 years and your family for 97 years. How does this project rank in terms of its uniqueness?
A: The Bell Works facility is truly one-of-a-kind. Our firm has been fortunate to earn the opportunities to work on some of the higher profile commercial real estate projects in New Jersey such as Giralda Farms, The Office Center at Short Hills and Eisenhower Corporate Campus. Even so, this project is a career highlight, unquestionably. Foremost, we are working with an amazing shell of a building originally constructed between 1962 and 1964 by world-renowned modernist architect Eero Saarinen. This collaborative work environment was way ahead of its time. But mostly, our client Somerset Development, who had the vision to recreate the building into what it is becoming, with “the feel and aesthetic of an urban downtown in a suburban location,” to quote Somerset president Ralph Zucker.
Q: Holmdel, NJ, is not exactly a household name as locations go, and the suburban office markets across America suffered the most in the recession and have been the slowest to recover. What is it about Bell Works that seems to be one of the bright spots for a suburban office project? How do the demographics align with the type of tenants you are signing?
A: It’s true, in recent years’ vacancy rates in suburban office markets have consistently been 20-30 percent higher than CBD markets. The majority of the leasing velocity over the past five years has taken place north of Monmouth County in Morris, Somerset and Hudson counties with emphasis on downtown, transit-oriented projects. This has been further challenged by the fact that the existing inventory of class A office product in Monmouth County is old and outdated with no new construction in over five years, Enter Bell Works with more than 1.2 million square feet of newly renovated and exciting office space and we discovered there was an enormous demand for flight-to-quality. From a demographic perspective, Monmouth County has a deep supply of a highly educated workforce. New Jersey is ranked third in broadband communications and second for business R&D investments in the nation. The state’s incentive grants, workforce training grants and tax exemptions make it an attractive place to create or retain jobs or relocate a business. Plus the demographics in Monmouth County are favorable to support tech commerce, with 43 percent of residents with at least a 4-year college degree.
Q: You have said that your original strategy was to reach out to New York and other large East Coast cities to market the space, and then you recognized the relatively deep tech pool in Monmouth County and recalibrated your efforts and turned the focus to your own back yard.
A: We realized Monmouth County has a very deep history of developing new technologies, going back to 1917 when the US Army’s Signal Corps training facility was established in Little Silver, which later became Fort Monmouth and was the home of Signal Corps Laboratories. Fort Monmouth employed over 5,000 military and civilian employees. (GlobeSt.com toured Fort Monmouth and traced some of its communications technology history in a 2014 video news story.)
Many of the US defense companies established research and development operations in and around Fort Monmouth. Unfortunately the base was closed in September 2010 and many of these companies relocated to the Army’s Aberdeen Proving Grounds in Maryland. But the highly educated employment base remained and went to work for the next generation technology companies such as iCIMS, WorkWave, Acacia, Spirent Communications and NVIDIA. All of these companies were either established here or had growing operations in Monmouth County and seized the opportunity to relocate to Bell Works where the workplace was inspiring.
Q: What has been the greatest challenge to marketing the Bell Works space?
A: The biggest challenge early on was first to convince the real estate brokerage community that this project was credible and that Somerset Development was both financially secure and possessed the redevelopment expertise capable to execute. Somerset understood the challenge and rose to the occasion. They implemented a massive base building and core renovation and restoration that brought this iconic building back to life. Today, you walk into Bell Works and you see incredible progress and change every minute. It’s alive with an energy and a vibe not found anywhere else…not even in Brooklyn.
The next challenge was to convince the corporate and technology community that there is no better work environment to inspire and motivate their employees than what we have created here at Bell Works. An important part of our marketing message is that relocating to Bell Works is as much an opportunity for rebranding your company and rebuilding the culture within your company as it is a real estate and financial decision. It will also have a positive impact by enhancing a company’s ability to retain and most importantly, to attract the best-in-class workforce. We are rapidly becoming a Millennial world and Bell Works is all about the Millennial workforce.
Q: In a video interview and tour with GlobeSt.com, Ralph Zucker called Bell Works “the Jerusalem of technology,” because of its unique place in the history of technology advances. Has that been successful in attracting the tech tenants that you have? And why?
A: Foremost, the history of innovation and invention that was spawned here at Bell Works has served as a magnet to technology companies. Numerous Nobel Prizes have been awarded for new technologies developed from within these walls, transistor, laser technology, solar power, initial cell phone technology. The tech community today embraces the technologies of the past with a passion to build upon this legacy and create the next wave of technological advances. We have companies working on the autonomous (self driving) vehicles, software development, cutting edge telecommunications hardware and software.
We are creating a workplace environment that will foster and help grow these companies including a coworking collaboration hub, pre-built furnished office suites, conference and training facilities along with a retail and dining amenities that will support and inspire the workforce.
We are experiencing a unique phenomenon where the current management and researchers for many of our new tenants had previously started their careers here working for Bell Labs. Subsequent to the federally mandated breakup of the phone companies back in the 1990s, these researchers left to start new companies and now find themselves coming back home to their roots! The social media has grown like wild fire throughout the tech community applauding the efforts of Ralph Zucker for having saved this iconic building from demolition.
Q: There is more than one million square feet of office space at Bell Works and you have leased about 60% of it. What’s the plan to bring the project close to 100% occupancy?
A: Over the past 12 months we have had the good fortune of a very active and robust leasing experience. We intend to build upon this momentum and continue our pursuit within the tech community and restore Bell Works and New Jersey as the East Coast technology center that it once was. By summer 2017, we will have more than 2,000 employees working at Bell Works and with the pipeline of lease activity we are confident this will grow to 4,500 by the year 2018-19. This population demographic will enable Somerset Development to support their plans for retail, restaurants, a new 150-200 room boutique hotel and state of the art conference and training facility.
See the interview at Globest.com