CRANFORD - Back in July, real estate broker Matt McDonough was brought in on behalf of Hartz Mountain to testify about the current office space market.
McDonough during his testimony spoke about the former Bank of America office space at 750 Walnut Avenue sitting dormant since 2012 and there being little to no interest from prospective leasers. He said the building is antiquated by today’s standards and was constructed with limited window space, among other issues, which would likely not attract new tenants.
At the Wednesday, March 6 Planning Board meeting, real estate broker James Brunette was brought in on behalf of the Board to testify his assessment of the property and market.
While he said that the commercial office market is "improving," the industrial market is "on fire." He pointed out numbers from between 2006-2008 saying that there was as much as a 25% office vacancy rate and that number has dropped to between 15-16%. Speaking on the industrial market, Brunette said the vacancy rate is around just 5%. While admitting there are some shortcomings of the property at 750 Walnut, Brunette said the building could be reconfigured.
He pointed to a company called Tulfra Real Estate that purchases "obsolete" buildings and retrofits them to be sold or leased in smaller pieces. An example Brunette used was a 73,500 sq. ft. property in Mount Olive that Saddle Brook Realty purchased and plans to subdivide into many pieces. He said the market currently calls from spaces anywhere between 5,000 and 50,000 sq. ft.
A problem raised at earlier meetings was the ceiling height at 750 Walnut, but Brunette again said there could be changes implemented. According to Brunette, todays industrial spaces are being built with 32-foot ceilings, but currently 750 Walnut's are much lower. He mentioned a property with a steel frame structure in Clifton that raised its ceilings to 27 feet to become a warehouse and distribution center. 750 Walnut is also a steel frame building, and Cranford's land use ordinance would permit such a move.
A third suggestion for the property by Brunette was potentially a medicial facility. He showed press releases of Memorial Sloan Kettering purchasing a 110,000 sq. ft. former corporate office campus in Montvale and RWJBarnabas Health creating a campus on a 36 acre obsolete office and research center in Tinton Falls.
Brunette believes these could have been viable alternatives had the property been marketed properly. Brunette did say he couldn't guarentee that he could have accomplished any of the alternatives himself, but he doesn't know if the property got the exposure it should have.
The application for 750 Walnut Avenue will continue at the March 20 Planning Board Meeting. Testimony is expected from the Cranford Board of Education.