A look at how we restored 655 Howard Avenue back to a vital part of Somerset County’s economy
By: Russ Azzarello, Vice President
Upon an initial inspection earlier last year, it might have been difficult to determine what the biggest problem was at 655 Howard Avenue, a 75,000-square-foot industrial property in Franklin, N.J. The property was suffering from deep environmental contamination issues due to its previous use as a manufacturing facility for stainless steel tubes decades earlier. As if that was not enough, the roof had significant deterioration and holes making it more of a hazard to those inside than a protection against the elements. The walls were covered in cracked, rusted and peeling paint, and the inside of the building contained corroded and abandoned equipment and fittings, revealing the only signs that a business had once occupied the space. Each of these factors contributed to 655 Howard Avenue sitting vacant for over 15 years – unable to find a buyer to fix it, demolish it or do anything productive with it. That is until the team at Denholtz Associates saw it.
At Denholtz Associates we have built a reputation for unlocking value where others do not see it. Howard Avenue, although in a state of complete disrepair, boasted a strategic location in a desirable town and, despite its many flaws, was a building ideally suited for today’s warehouse users. The fundamentals of the building and our experience in turning around properties such as this one meant that we could realistically imagine this space as a perfect investment opportunity for our firm where dozens of others did not.
We also knew that Franklin Township’s municipal government was enthusiastic about the property as well and had been searching for a developer for quite some time with the vision to return it to the economic fold of the town. A complicated ownership structure only further complicated the purchase but we worked to negotiate a purchase price that reflected a fair market value for the space that took into consideration the wealth of issues at the site. Once we had purchased the building, we worked with the town to develop a remediation and renovation plan that met the requirements of their permitting and approvals process while also moving the project along in a quick and efficient manner.
Turning a Vision into a Reality
The first step in the execution of the turnaround of this space was determining how to remediate the land under the building. Our team worked with the New Jersey Department of Environmental Protection, Franklin Township, the previous owners of the property and local contractors to develop a remediation plan that would bring the land back up to acceptable standards. Following our development of a remediation plan, we embarked on a complete rehab of the property including a new roof, HVAC systems, lighting, landscaping, electric, parking lot and paint.
At the same time, we worked to secure a buyer for what we knew would be an in-demand property upon its completion. We worked with Bytech International, a Brooklyn based cell phone accessories distributor, to negotiate a sale of the property upon its completion. The property would enable Bytech to begin fulfilling their warehousing and distribution needs internally instead of using outside contractors as they been doing for many years. As the sale was negotiated during the renovation, Bytech was able to participate in the planning of renovation to build out the space to suit their exact needs.
Our team leveraged our years of experience in adaptive reuse projects and substantial in-house capabilities to purchase, remediate, renovate and sell the space in less than a year. Not only did our execution of the remediation and renovation make this a successful investment for the Denholtz team, 655 Howard Avenue is no longer a blighted eyesore and is now a valuable part of the local economy in Franklin as well as a home for a growing business.
The 655 Howard Avenue project is a perfect distillation of the Denholtz investment strategy; finding projects that present an opportunity to unlock value where many others do not see it and leveraging our significant in-house capabilities to execute them. This strategy has guided our company for over 65 years and will continue to guide us as we search for opportunities that enable us to deliver superior, risk-adjusted returns to our investors and meaningful projects to local communities.