Liberty Property spurs return of single-story office building construction to South Jersey

Real Estate Weekly, Sept 1, 1999

When telecommunications network software firm Ulticom, Inc. (formerly DGM&S Telecom) began looking for easily customizable space last year, they kept running into the same barriers in the mid-size mid-rises that dot the South Jersey landscape: elevators.

"Mid-rise buildings all have a center core that takes away open space and inhibits our workflow," said Shawn Osborne, president and CEO of Ulticom. "We need open floorplans to accommodate equipment and our engineering teams. It's critical to have flexible space so we can run cable, erect cubicles and convene ad hoc meetings for team projects. When Liberty presented us with a single-story office building plan in 1998, it really made sense on all levels space planning, budget concerns and a quick construction turn-around."

In just six months, the plan was a reality, and the first single-story office building to be built in more than a decade in South Jersey was opened at 1020 Briggs Road in Cambridge Crossing in Burlington County. Ulticom moved into the 35,272 square-foot space in May of this year.

"The market conditions for single-story office buildings are perfect right now," said Tim Mazzarelli, senior vice president of Liberty's New Jersey region. "Although South Jersey is close to New York and Philadelphia, hundreds of major companies feel they need to have a presence here to be effective, and have established 5,000 to 20,000 square-foot satellite offices for back office and sales operations. A single-story office building offers a number of real benefits, not the least of which is a 20 to 30 percent cost savings both in the construction and operation of a building."

Lack of the center core (elevators, lobby, and stairwells) provides several benefits:

* Entering and exiting the building is simplified, a fact particularly important to tenants who have sales, showroom, training and/or service operations;

* Space planning is much more flexible, especially for companies using large numbers of cubicle office spaces to facilitate employee interaction;

* Taxes are lower and rent per square foot is less expensive as there is no "common area" to be maintained;

* Construction costs run between 20 to 25 percent less than a comparable mid-rise space, making owning a building more affordable;

* Maintenance costs can be as much as 30 percent less than a comparable mid-rise space, as all utilities and services are applicable only to the tenant - there are no charges for heat and air conditioning, cleaning, lighting and security for common areas.

"The response to the 1020 Briggs building has been very positive and very strong," said Mazzarelli. "It has proven that this product is very attractive here, so much so that before we even completed the building in May, we began planning the next one across the street at 1015 Briggs. We plan to start construction of thai building after the first of the year, as we already have serious interest in half to two-thirds of the 35,000 square feet in that building. We think this can be a prototype for the rest of the company - the timing is right."

Mazzarelli noted that the last single-story office buildings to be developed in South Jersey were in the late 1980's, including 521 Fellowship Road and 57 Haddonfield Road. Both were built by Rouse & Associates.

Liberty Property Trust is a fully integrated real estate investment trust specializing in the long-term ownership of suburban office and industrial properties. Liberty grows its earnings through the development of superior properties and environments, the selective acquisition of new properties and the application of superior management to its portfolio. By providing the highest quality business environments and services to our 1,900 tenants, and continuously exceeding their needs and expectations, Liberty seeks to achieve increasing and sustainable long-term value for shareholders.

One of the country's largest REITs, Liberty currently owns and manages 45 million square feet of space in more than 600 properties.