Two developers are charting different courses towards the same suburban warehouse nirvana.
In Elmwood Park, New Jersey, Crow Holdings has acquired 12 acres at the site of the Marcal Paper factory, NorthJersey.com reported. A fire in 2019 devastated the site, and although no one was injured, 500 people lost their jobs, NBC New York reported.
The paper company was able to resume manufacturing on part of the 1 Market Street site in 2020, but the rest has stood vacant. Crow Holdings plans a 206,000-square-foot warehouse there.
The developer expects to break ground this summer. Crow has received site plan approval and is projected to spend between $90 million and $100 million on the industrial development, which will take 12 to 18 months.
On Long Island, Prologis has its own industrial plans, according to Newsday. The San Francisco-based company wants to demolish a former Grumman office building in Bethpage to put up a 239,000-square-foot warehouse at 600 Grumman Road West.
Prologis purchased the site recently for $51.2 million, or about $3 million per acre. The 17-acre site has a pair of office buildings totaling 218,000 square feet and a 10,000-square-foot former steam plant that would need to be vaporized.
According to Prologis, the warehouse would be able to support multiple tenants and dozens of jobs. The project is estimated to cost $100 million.
Prologis’ plans for the site were reported when it purchased the property, but the REIT is now seeking 20 years of tax breaks for the development. Prologis says if the Nassau County Industrial Development Agency balks, the project will not go forward.
“It’s not happening without the IDA’s assistance,” Prologis real estate attorney Daniel Dornfeld told Newsday.
A year ago, building warehouses was like printing money; many were leased well before they were completed. But negative news has hit the industrial sector in recent weeks, which could explain Prologis’ insistence on subsidies.
The industrial giant works closely with Amazon, one of the largest industrial tenants in the country. But the e-commerce giant has done an about face on warehouse holdings after overcommitting itself during the pandemic boom. Bloomberg reported that Amazon is looking to sublet 10 million to 30 million square feet of industrial space. The company could also end some of its leases with landlords.
[NorthJersey.com] — Holden Walter-Warner