D2 Organization Sells 1.725 Million SF Logistics Park Development Site in New Jersey
Developer sells 282-acre South Jersey site planned for massive industrial complex
By Lisa Dukart – Associate Editor, Philadelphia Business Journal
An affiliate of East Norriton-based D2 Organization has sold a 282-acre site situated at the base of the Delaware Memorial Bridge in South Jersey which is expected to house roughly 1.7 million square feet of industrial space.
Located at 373 N. Broadway in Pennsville, the property will be developed into a logistics park that will include two buildings: one that spans over 1.2 million square feet and another at 512,442 square feet.
Deepwater Investment Group sold the land to a joint venture between Newport Beach, California-based CT Realty and Newark, New Jersey-based PGIM Real Estate, the asset management arm of Prudential Financial. Terms of the deal were not disclosed.
Deepwater had planned to fully develop the site but opted to sell "due to market conditions and the strength of offers," said Keith Delaney, CEO of D2 Organization.
The project is years in the making, with Deepwater putting the site under contract with energy company Calpine in 2019. Deepwater finally closed on the deal earlier this year but it has not yet been recorded with Salem County. D2 executives declined to disclose how much the company paid for the site.
During the intervening years, Deepwater undertook a number of efforts to reposition the property, which was previously used as a coal-fired power plant. In addition to remediation, Deepwater had to work around wetlands and transmission lines and securing subsequent approvals. The state of New Jersey also approved the project last year for a payment-in-lieu-of-taxes, or PILOT, agreement.
“The site was extremely complex,” said Dan McGreevy, executive vice president of D2.
Despite the challenges posed by such a site, it had a number of upsides like infrastructure that would allow it to handle large trucks. That was part of what made it attractive to CT Realty. The company has a presence in North Jersey, but this marked its first foray into Greater Philadelphia. CT specializes in Class A industrial logistics properties and has 2,400 acres of industrial land across the country.
CT was drawn to the region and the Pennsville site in particular because of the “vacancy market, infill location, lack of first-generation product and the opportunity to be able to deliver a state-of-the-art logistics center in the midst of great access to I-295 and I-95,” a spokesperson for the company told the Business Journal.
Situated along the Delaware River, the site's location to major highways and the New Jersey Turnpike makes it ideal for serving not only markets in the immediate area but as far as Washington, D.C., and New York.
“This is an exceptionally rare opportunity to assemble a critical mass of land and create a top-flight logistics project in the second largest industrial market in the country,” said Rob Huthnance of CT Realty. “This project is at the gateway to Southern New Jersey and will serve as a distribution hub for the entire Northeast, able to serve 66 million consumers in a single day’s truck drive.”
The sale of the site underscores how hot the industrial real estate market is locally and how Salem County is gaining a foothold of late. Nearby at Carney’s Point, Amazon.com Inc. signed a lease in 2020 for a 1.25-million-square-foot building while it was under development. In Pennsville, DB USA Logistics Inc. signed a lease on a 194,000-square-foot, two-story building. And in Logan, a venture between Advance Realty Investors and Greek Development is constructing two buildings on speculation for an industrial campus which will eventually total 3.2 million square feet when built out. Earlier this year, the property, Logan North. signed two tenants who leased a combined 491,000 square feet.
“A lot of people thought we were early on Salem County when we began redeveloping the site four years ago,” Delaney said. “But we were confident that tenants and investors would be attracted to the site’s unique attributes.”
CT Realty expects to deliver the project by the third quarter of 2023.
Brian Fiumara of CBRE represented D2 in the transaction. CBRE will also be retained to market the property.