The Rockefeller Group has acquired a 228-acre site in Piscataway, N.J., where it plans to build a 2.2 million-square-foot logistics center and cater to a booming e-commerce-fueled industrial real-estate market.
Last month, the developer purchased the former Dow Chemical Co. site for $57 million from a partnership of Lincoln Equities Group LLC and Real Capital Solutions, said Clark Machemer, regional-development officer for the Rockefeller Group's New Jersey and Pennsylvania operations.
The previous owner had secured initial site-plan approval to develop the property at 171 River Road as an industrial park, Mr. Machemer said.
Rockefeller's six-building project is in an area along the Interstate 287 corridor just west of the New Jersey Turnpike. Industrial development has been increasing, replacing decades-old structures around I-287, as land along the New Jersey Turnpike in northern and central New Jersey is gobbled up by e-commerce demand.
Later this summer, Rockefeller plans to break ground on two buildings -- one with 800,000 square feet of space, and the other with 300,000 square feet. The overall project is expected to cost between $225 and $250 million.
"There is quickly diminishing land along the turnpike corridor," Mr. Machemer said. "That leads you to 287, the only other interstate that really is supportive of modern-day logistical warehouses."
Lincoln Equities and Real Capital bought the site for $13 million in May of 2014 and negotiated development approvals with Piscataway officials, as well as a 20-year program for payments in lieu of taxes, said Joel Bergstein, president of Lincoln Equities.
Dow Chemical stopped operations on the property years ago, Mr. Bergstein said. Plastics such as Bakelite had been produced there, he noted, and Dow, Lincoln Equities and Real Capital have done cleanup work at the site.
The sellers had intended to develop the land themselves, but those plans shifted as New Jersey's industrial market continued its hot streak of rising rents and tenants' growing appetite for space.
"The market improved even beyond what we had anticipated," Mr. Bergstein said. "We thought it was an opportune time to exit."
Write to Keiko Morris at Keiko.Morris@wsj.com
(END) Dow Jones Newswires
July 02, 2017 14:46 ET (18:46 GMT)