Croda's New U.S. Headquarters:

How Maximizing Collaboration Drives a Better Customer & Employee Experience

BEFORE

AFTER

specialty chemicals | UK-based | tenant rep | croda.com

Project & Relationship Overview

In 2003 Garibaldi represented Croda Inc., a specialty chemical company headquartered in the UK, on a site selection for its US headquarters and established a long-term lease for 25,000 SF in Edison, NJ.

Over the subsequent 20 years, including numerous renewals and expansions, their US operation expanded to over 46,000 SF and included 20,000 SF of R&D lab space.

Years of Service

Square Feet Transacted

Transactions

Situation Analysis

In 2018, Croda made a commitment to improve their work environment in an effort to improve upon their ability to recruit top talent as well as create a state-of-the-art R&D lab that can welcome their clients.

The analysis that followed aimed to answer the following three questions:
1.) Does it make more sense to invest in capital improvements to their current space, or upgrade facilities all together?
2.) If they decided to relocate, is it feasible to relocate in close proximity to other life science companies?
3.) Could they also find a new location that was closer and more accessible to their customers?

Solution

Step 1 : Market Analysis

Garibaldi provided market analysis on average asking rents, recent workplace trends, as well as labor market analysis. Garibaldi also toured Croda around new/redeveloped buildings that housed companies looking to recruit from a similar labor pool as Croda.

Step 2 : Site Selection

The decision was ultimately made to relocate their US headquarters. Croda felt they would benefit from a more appealing location, versus simply improving their current offices. The decision was largely based on improving the employee experience. To help guide the site selection process, Garibaldi looked to life-science and technology related clusters around the state.

Step 3 : Decision Making Process

After an exhaustive search, Croda agreed that a long-term lease commitment for 76,000 SF at 777 Scudders Mill Road in the Princeton Forrestal Center was the best fit. The building had been designed by and built for Bristol-Myers Squibb to serve as administrative operations, and as such was built to a high corporate standard and infrastructure.

Step 4 : Lease Negotiations

Garibaldi leveraged Croda's excellent credit, as well as their receptiveness to commit to a long-term lease. This resulted in a generous tenant improvement allowance, base building enhancements and free rent concessions that brought the Net Effective Rent to be most compelling. However, Croda still had years remaining on their current headquarters lease in Edison, NJ.

Step 5 : Sublease Strategy

An additional challenge to the relocation strategy was Croda’s obligation to restore the existing R&D labs in Edison back to office space prior to vacating the premises. Restoration costs were estimated to be $500,000. Garibaldi assessed the opportunity to market the offices and R&D labs to secure a replacement tenant that would take advantage of the existing lab infrastructure and assume Croda’s obligation to restore.

Step 6 : Sublease Marketing

The premises were being marketed as Plug & Play complete with R&D labs infrastructure which is significant including lab benches, fume hoods, significant utility infrastructure to support labs and all furniture. At this time, Covid19 pandemic was widespread and the demand for R&D labs and testing facilities was strong with limited availability. Garibaldi was confident that a replacement tenant could be secured thereby saving Croda $500,000

Step 7 : Sublease Execution

Within 6 months from the commencement of sublease marketing, Garibaldi secured QDX Pathology, a cancer research and testing company located in NJ. QDX was able to mobilize immediately and have operations up in running to take advantage of the market's need for more testing and research. QDX negotiated a direct lease with the landlord enabling Croda to vacate and have no further obligation. The landlord received a quality creditworthy tenant for a longer-term lease, while QDX saved significant money and time by inheriting Croda’s labs and Croda was completely released form any further obligation and saved $500,000

We have chosen a new location where our employees will thrive and create an even stronger North American team. It is our vision that this new environment, with innovation and sustainability at the core, will spark new ideas and push the boundaries of our thinking to deliver a positive difference to our customers

David Shannon
Senior Vice President, Croda Inc.

Results

Croda officially took occupancy of 777 Scudders Mill Road on February 1, 2021. Construction on the “Innovation Lab” has been completed and the result is a state-of-the-art space where Croda is already inviting costumers in to collaborate with Croda’s team of scientists and engineers.

In addition, the Princeton Forrestal Center location provided immediate exposure to the top ranked pharma/life sciences companies including BMS, Novo Nordisk, Sandoz, Celgene, as well as GenMab (a Danish biotechnology company), who occupies the balance of 777 Scudders Mill Road.

“The Croda signing is another great success for the park which could not have been possible without the cooperation of the Croda and Garibaldi teams. We look forward to working with Croda to bring its headquarters plans to fruition and to a long and successful relationship.”

Brendan Driscoll
Director, Trawler Capital Management

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The Garibaldi Group
14 Fairmount Ave.
Chatham, NJ 07928
+1 973-635-0303

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