Monday, January 23, 2012

Developer Says Solar Firms Helping Power Real Estate Recovery

New Jersey's emerging solar industry has long been seen as a job creator, but at least one Garden State developer hopes it can now fuel growth in the state's office market.

The developer, Bedminster-based Advance Realty, recently announced three new leases with out-of-state and international solar companies that are establishing regional offices in New Jersey. Among them are India-based Lanco Solar, which has leased 4,500 square feet at Advance's One Gateway Center, in Newark, and Johnson Controls, a Milwaukee-based firm that leased a 3,500-square-foot space at 400 Riverview Plaza, in Trenton.

"The fact that they see a market emerging here in New Jersey and are making investments to that end is a good sign," said Brian Banaszynski, managing director of Advance. "They're not big physical planned investments, but certainly intellectual capital and establishing a beachhead here."

A third tenant, KDC Solar, has established its New Jersey headquarters at an Advance property in Bedminster, and is going beyond the typical role of a tenant. The firm is installing ground-mounted solar arrays, rooftop panels and solar carports at the Route 206 site, and is preparing to do the same at another Advance property in Morris Township.

Banaszynski said the installations serve as both a showcase for the business and a cost-savings upgrade for the property owner. And the arrangement, which is common in states like Arizona, also benefits other tenants at the office building, said Jeffrey Heller, executive vice president at CB Richard Ellis.

"It's a win for the owner because they can generate a little more income, and it's a win for the tenant because it's not inconvenient to them," Heller said. "It's giving them a better parking situation by having a covered spot."

Banaszynski, meanwhile, said his firm is negotiating with a fourth out-of-state solar company, and hopes the industry will continue to have a positive impact on leasing activity. Other industries, such as biotech, have had similar effects in recent years, he said, and while the solar industry is far from having a large presence in the state's office market, he is confident New Jersey will continue to attract new companies in the sector.

"I think the same appeal is here for the solar industry relative to growing a business — access to major markets, access to capital centers and a good work force," Banaszynski said. "I think the same basic parameters are there to justify the investment by these solar companies, but they're just pursuing a different market."


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