Also: Corporate Executive Board Expands by 108,000 SF; and Other headquarters news from: Essential Bodywear, Panasonic, Pegasystems, Rolls-Royce, Santarus, Shimano American, Sutter Health and many others
Merck, the pharmaceutical giant known as MSD outside the United States and Canada, plans to move the company's global headquarters within the state from One Merck Drive in Whitehouse Station, NJ, to its existing property at 556 Morris Ave. in Summit.
The 2 million-square-foot Summit property currently houses research, manufacturing, animal health and consumer care operations and is home to 1,800 people.
The company will close its 900,000-square-foot One Merck Drive headquarters building, which it owns. The transition process is expected to begin in 2014 and be completed in mid-2015.
Share this story with your followers
The headquarters relocation is part of the company's ongoing program to consolidate its global real estate footprint and lower its annual operating expenses, following its merger with Schering Plough in 2009.
The Summit location was selected as the site for Merck's new headquarters because it is a strategic, multi-use site with excess work-space capacity and is adjacent to major transportation hubs and desirable urban centers.
"The relocation of our headquarters will help us achieve our future vision, reduce the size of our operating footprint, and increase agility as we adapt to our changing business environment," said Kenneth C. Frazier, chairman and CEO of Merck.
About 2,000 employees and contractors currently at the Whitehouse Station global headquarters building either will move to the new facilities in Summit or to other nearby facilities such as those in Branchburg and Cokesbury, NJ.
Merck has been headquartered in Whitehouse Station since 1992. Prior to that, the company was base in Rahway, NJ.
Corporate Executive Board Expands by 108,000 SF
The Corporate Executive Board Co. entered into an expansion lease with Geneva Associates LP, an affiliate of Vornado/Charles E. Smith LP, for 108,800 square feet at Rosslyn Plaza North, 1777 N. Kent St. in Suites 400, 500, 600, 700 and 800 in Arlington, VA.
The company expects that these actions will increase its aggregate rent expense by $3 million for the year ended Dec. 31, 2013 and by $5 million for each year thereafter through the end of the lease period.
The newly leased space is adjacent to Corporate Executive Board's headquarters building and was negotiated at or below current market rents.
Total lease payments over the non-cancelable 10-year, 7-month term ending on Dec. 31, 2023, including escalations, will be $56 million.
The lease contains a one-time expansion right during 2013 for an additional contiguous floor of 21,760 square feet at the same terms and conditions and a renewal option to extend the lease for an additional four or five year period.
Corporate Executive Board will be required to pay its pro rata portion of any increases in building operating expenses and real estate taxes in excess of the 2013 base year.
Crescent Dairy & Beverages
Crescent Dairy & Beverages LLC will be investing in a new ultra pasteurized beverage processing facility in Colleton County, SC. The proposed investment is expected to exceed $30 million and anticipates generating 60 new jobs within the next five years.
"We are excited about moving forward with our plans of establishing operations in the Eastern U.S. After close to one year of extensive research and exploration of the region, we are convinced that South Carolina and Colleton County will offer us a secure business environment that will guarantee solid progress which will contribute to our regional expansion," said Crescent Dairy representative Gabriel Pascual.
"The new location is ideal for serving not only eastern U.S. markets, but export markets as well, as the Port of Charleston provides ideal conditions to allow fast and constant flow of cargo to the region," Pascual added. "We are also very appreciative of the professionalism and support received from all South Carolina and Colleton County state officials and representatives involved in the negotiating process; such was unparalleled when compared to other participating states and certainly made a difference for us to establish operations here."
The new facilities will include state of the art processing equipment which will implement "ultra-high-temperature" (UHT) beverage processing.
Essential Bodywear, specializing in women's bodywear, relocated to 3160 Dallavo Court in Commerce Township, MI, in response to the company's unprecedented growth in 2011-12. The new world headquarters features 11,000 square feet of space - up from 3,000 square feet, previously.
"This move is an exciting development for Essential Bodywear since it's a visual of the rapid growth we are experiencing," said Marcia Cubitt, EBW president. "Our staff has increased, and so has our product line which now includes a maternity line and new intimate apparel. The new location accommodates our growing staff, and the attached warehouse allows our inventory and shipping to be in one, central location."
By: Timothy Weber
LBi, a marketing and technology firm, signed a lease for 26,000 square feet at 11 W. 19th St. in New York, NY. With the additional space, LBi's U.S. headquarters location will now total 78,000 square feet in the building.
The landlord, Savitt Partners, was represented in-house by Robert Savitt. Jamie Katcher and Frank Coco of Cushman & Wakefield Inc. represented LBi in this transaction.
Panasonic Corp. of North America broke ground on a 48,500-square-foot technology center is being developed by Advance Realty in Harrison, NJ. The build-to-suit facility will house the company's engineering offices, a lab and various testing facilities.
Located adjacent to Red Bull Arena, within Advance's Riverbend District, the turnkey facility is one of the largest urban redevelopment projects underway in New Jersey. Occupancy is scheduled for the summer of 2013.
"With a new headquarters already being developed at Two Riverfront Plaza in Newark, and now this Technology Center under construction in Harrison, we expect to be able to smoothly transition all of our operations from Secaucus by summer," said Mike Riccio, Panasonic controller and vice president, finance.
Pegasystems Inc. opened its new corporate headquarters at One Rogers St. in Cambridge, MA. It leased 162,000 square feet on the fourth through sixth floors for 12 years.
Pegasystems moved to the new location from 101 Main St. in Cambridge
"The office has everything an employee is looking for, great natural light, modern global collaboration tools, multiple commuting options, easy access to shopping and the airport, and capacity to grow," said Dan Ryan, Vice President, Real Estate and Facilities at Pegasystems.
Jones Lang LaSalle represented building owner Principal Global Investors.
Quantum Retail Technology
Quantum Retail Technology, which provides inventory management and merchandising optimization solutions, relocated its Minneapolis headquarters to the Campbell Mithun Tower. The new address is 222 S. Ninth St., Suite 900.
"The relocation of the Quantum Retail headquarters offers larger working spaces and facilities to operate more efficiently," said Morgan Day, chief technology officer of Quantum Retail.
At 12,000 square feet, the new headquarters is nearly two times larger than the previous working space. The additional office space
and associated amenities are necessary to accommodate the company's growth and to better serve new employees, customers, and partners.
Rolls-Royce, opened its first-ever U.S. Defense Operations Center at 450 S. Meridian St. in Indianapolis to enhance service and technical support for US defense customers.
The Defense Operations Center will provide round-the-clock response for customers in the field to speed support and technical assistance for engine-related issues.
The Operations Center, located in the new Rolls-Royce Meridian Center, represents a $2 million investment focused on meeting customer needs. The center will offer technical support from a 50-strong team of technical and engineering experts.
Using high-tech tools and software, the support team will provide a new, integrated and centralized operation to respond to customer issues. The team will be able to quickly review individual and fleet engine data; inspect hardware via live video feed of boroscope inspections; and enable analysis by several team members to provide an expert and timely response.
Though the new Operations Center is a first for Rolls-Royce defense customers in the U.S., the model has already proven to be invaluable at increasing engine time on-wing in other regions. The Indianapolis operation will complement the work of a center which opened several years ago in Bristol, UK.
Santarus Inc. entered into an office lease with Kilroy Realty for the relocation of its company's headquarters to 3611 Valley Centre Drive in San Diego, CA.
Initially, the company will lease 40,144 square feet of office space and then add 7,044 square feet. The term of the lease is expected to commence Dec. 15 for the initial premises and Dec. 1, 2013, for the additional space. Both space leases will expire May 31, 2020.
The company paid a security deposit of $348,536. Monthly rent will be $142,511.20, subject to annual increases of 3% during the term of the lease. Once the company takes possession of the additional space, the monthly rent will increase to $167,517.40. The company is getting five free months on the initial space and six months free on the additional space.
Santarus' current headquarters are at 3721 Valley Centre Drive, Suite 400, in San Diego.
Sealed Air Corp.
After 30 years in Hayward, CA, Sealed Air Corp. is relocating from its 118,000-square-foot regional headquarters to a much smaller 38,000-square-foot facility in Alvarado Business Park at 2877 Volpey Way in Union City, CA.
The company is downsizing and moving its production to a plant in Seattle. It will keep its warehouse/distribution operation in the new location.
"Sealed Air has been a long term tenant in the area for over 35 years," says Todd Severson, of Colliers International in Oakland who represented the Sealed Air.
The landlord, General Steamship International Ltd., was represented by Sean Sabarese also with Colliers International in Oakland. Terms of the deal are undisclosed.
Shimano American Corp., a maker of fishing tackle and bicycle components, is expanding its distribution center in North Charleston, SC. The expansion will double the company's original investment and increase employment at the facility by 50%. The company broke ground on the new construction last week.
"With this investment, it's much more than just doubling the size at our South Carolina facility - we'll also be prepared for both current and future distribution needs for all our brands," said Dave Pfeiffer, president of Shimano American. "Taking our original investment in 2003 in a 25,000-square-foot distribution center in North Charleston's Benchmark Industrial Park to another level again, this a needed positive step in order to increase services to our business partners up and down the East Coast, and throughout the Midwest and Southern states."
The new construction adds nearly 99,000-square-feet to the current 102,000-square-foot facility at 9550 Palmetto Commerce Parkway, built by Shimano in 2006. The addition will be ready in August 2013.
Citing a remarkable opportunity to acquire an off-market asset in the heart of Silicon Valley, W3 Partners, an institutional real estate investment manager and operating company, and Ridge Capital Partners LLC, a private equity investment firm, acquired a three-building R&D office complex in San Jose, CA.
Built in 1985 and completely renovated in 2011, the 185,074-square-foot Class A property is on 11 acres at 51, 77 and 145 Rio Robles Drive.
Two of the three buildings within the property are fully occupied by SunPower Corp., which designs, manufactures, and markets high performance solar electric power technologies. The third building, which totals 56,895 square feet, is currently vacant.
A key acquisition strategy was working with SunPower to consolidate from its occupancy of all three single-story buildings into two buildings, providing the new owners with significant long-term value creation through lease up of the now vacant building.
"This purchase fits perfectly within our acquisition strategy. Our goal is to acquire value-add assets that are located in markets with great employment fundamentals and demand a creative approach to unlocking opportunity," said Susan Sagy, managing partner, W3 Partners.
The seller, Lane Partners and Walton Street, was represented by Newmark Knight Frank Cornish & Carey Commercial Capital Group. The buyers represented themselves.
Sutter Health completed a 10-year, 295,000-square-foot office lease at 9100 Foothills Blvd. in Roseville, CA.
The new lease enables Sutter health to establish a major administrative service center in Roseville supporting the network’s Northern California health care operations. The center is expected to employ more than 1,000 administrative support staff over the next 18 months with more growth over time.
The creation of a central administrative service hub is part of an effort to transform how Sutter Health delivers business support services across its growing network of care. Services such as finance, billing, human resources and other non-patient care functions will move to the Roseville center. Currently, these services are provided in dozens of separate Northern California locations, including patient care sites. Sutter Health’s system offices will remain in Sacramento.
Cushman & Wakefield’s leasing team led by Ron Thomas and Kevin Partington, together with Bruce Hohenhaus and Chris Schwarze, represented the tenant, Sutter Health. The landlord, Quality Investment Properties
, was represented by Dennis Shorrock and Bruce Wirt of Cornish & Carey Commercial Newmark Grubb Knight Frank.
Vehicle Production Group
The Vehicle Production Group LLC, maker of the wheelchair-accessible MV-1, established its company headquarters in Allen Park, MI (Detroit), having relocated from Ft. Lauderdale, FL.
VPG's office in Allen Park formerly housed only its engineering staff; the company's south Florida office will continue as a regional sales office.
The decision to move its headquarters to the Motor City was made by CEO John Walsh, who said Detroit is "where America's fourth automaker belongs."
Keep up weekly on national news, trends and property leads with the Watch List Newsletter,
a weekly pdf that includes other news and leads not found on the CoStar Group web news pages. Sign up for the Watch List E-Mail Alert
. A new issue is published late each Wednesday.