Only three industrial projects in New Jersey are currently pursuing LEED certification, two of which are in the Newark area and owned by Pantheon Properties. The third is currently available for lease outside of Princeton in the New Jersey Turnpike Exit 8A submarket. Called the Middlesex Intermodal Center, the 583,000-square-foot warehouse is located in South Brunswick and was recently purchased by New York City-based Blackrock for $42.5 million – around $73 per square foot from developers JG Petrucci Co. and F. Greek Development.
The warehouse, which occupies approximately 44 acres, includes a number of green design features, including a reflective roof and efficient lighting. It was precertified Silver under the LEED for Core and Shell system and Blackrock continues to pursue a formal Silver rating under LEED for New Construction as the property hits market now that construction is complete.
I think that reviewing green efforts across the industrial sector is interesting for a number of reasons. First, industrial buildings account for a disproportionately large share of energy consumption as compared to residential and commercial buildings. Second, there continues to be relatively little written about LEED in the context of industrial buildings. Third, and what I think is most interesting, is that industrial leases are typically net (as opposed to gross, or full-service in the commercial sector), meaning that tenants pay for the building’s operating expenses in their entirety. This means that an industrial owner which creates an energy-efficient space is likely at a competitive advantage over an owner who does not in terms of attracting tenants based on the promise of reduced operating expenses (which may often be in exchange for higher rents).
While LEED is, of course, no guarantee of an energy-efficient space, it is encouraging that New Jersey owners, at least implicitly, are attempting to attract industrial tenants, even in a down market, by investing in the LEED premium (which is probably lower anyway for industrial buildings) and attempting to build efficient green space for industrial tenants. We’ll be following leasing efforts at the Middlesex Intermodal Center and see what additional conclusions – if any – we may be able to draw.
- Industrial Warehouse Goes Green (GlobeSt.com)