Patience pays off as benefits giant inks 147,000 s/f lease

Real Estate Weekly, April 7, 2004

CitiStreet LLC, a joint venture of Citigroup and State Street, has signed a long-term lease commitment for 147,000 square feet of office space at Archon Group's 400 Atrium Drive in Franklin Township, New Jersey, announced Joseph Sarno of Cushman & Wakefield of New Jersey, Inc.

Sarno, Jon Marks and Jeremy Neuer of Cushman & Wakefield of New Jersey, Inc. in Iselin negotiated the transaction.

Founded in 2000 and based in Quincy, Massachusetts, CitiStreet is one of the largest global benefits delivery firms in the United States.

It has 3,500 employees, serves more than 9 million participants and administers $190 billion in assets in the United States for defined contribution, defined benefit and health and welfare plans of corporate, government, health care, Taft-Hartley and not-for-profit organizations.

CitiStreet also serves more than 900,000 participants and administers about $4 billion in assets outside the United States.

CitiStreet initially signed a memorandum of understanding for the space at 400 Atrium Drive in October 2003. The firm will relocate its Retirement Services Division from East Brunswick, New Jersey, to the property in February 2005.

"Within the context of the soft regional market, Archon Group displayed significant flexibility--by carrying the existing vacancy for a full year--in order to secure this credit worthy tenant at 400 Atrium Drive," Sarno said. "This transaction illustrates the heightened competition between landlords to secure tenants."

At the same time, CitiStreet's commitment to relocate, rather than renew at its existing address, illustrates that companies are beginning to dedicate capital dollars to realize the advantages afforded by moving to upgraded space, according to Sarno.

"CitiStreet has grown over time in its current location, and the building no longer fits its needs," Sarno said. "Sensing that the market has begun to turn, CitiStreet took advantage of current rates to achieve long-term savings at 400 Atrium Drive, a Class A building that was formerly occupied by Merrill Lynch.

"CitiStreet's new space provides larger, more efficient floor plates that will be customized for its requirements, including increased facilities for training and conference usage."

Sarno, Marks and Neuer were recently appointed as leasing agents for Atrium Corporate Park, the high-profile, 850,000 s/f campus where 400 Atrium Drive is located.

The property sits on a 66.68-acre site, one half mile south of the intersection of Interstate 287 Exit 10 and Davidson Avenue. The four-building, Class A complex serves as home to such notable tenants as Merck, Sun Microsystems and Computer Sciences Corporation, among others.