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Build-to-suits offer advantages for all.

While many corporations are reluctant to expand in the present economic climate, some are taking advantages of today's real estate market conditions to realize long-term occupancy cost savings through build-to-suit facilities.

Recently Caldor Corporation completeed a year-long search for a second major distribution facility to serve the needs of its expanding business operations. Rather than moving into an existing facility, Caldor opted for a new 500,000-square-footbuilt-to-suitfacility at Northeast Business Center at the main interchange of 1-84 and 1-87 (the NY State Thruway) in Newburgh, New York. The new building was constructed exclusively for use by Caldor on a 50.51 acre parcel within the 140 acre, 1.575 million- square-foot Northeast Business Center complex. This facility has expansion potential of up to 900,000 square feet.

When corporations are driven to reduce costs and improve the efficiency of their operations, the new requirements very often demand design features that are either not available in existing facilities or would be cost prohibited to retrofit.

Caldor's specific requirement for a 42-foot clear ceiling (necessitated by a state-of-the-art computerized racking system) coupled with their need for an option on an additional 400,000 square feet could not be found in an existing building within the geographic search area. Any existing buildings which may have been available within the geographic search area did not have appropriate ceiling heights nor the additional land or building(s) which could be presented for future expansion. Presented with the opportunity of having a facility built specifically for their needs, Caldor found it was economically viable to locate within a new facility at Northeast Business Center. By focusing on their long term needs, Caldor secured a new state-of-the-art distribution center that will satisfy their future requirements.

In addition to these specific requirements, there are other hurdles which must be crossed in order to complete a build-to-suit of this nature. Approvals for a similar size building were received in 1987, which allowed a construction schedule that met Caldor's time restraint. Both the developer's strength and experience and the tenant's financial stability were key to financing the project. Northeast Business Center is a triventure of National Realty & Development Corp, Robert Martin Company, and the Mack Company who together have developed, own and manage over 30 million square feet of commercial real estate.

National Realty is also Caldor's largest landlord. Caldor Corporation has exhibited consistent growth and a strong market position.

Caldor joins Airborne Freight Corporation, M&T Bank, StairMaster, S&W X-Ray, and Nugent & Haeussler, P.C. at Northeast Business Center.
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Title Annotation:Commercial Sales & Leasing; New York, New York real estate market conditions conducive to long-term occupancy cost savings through build-to-suit facilities
Author:Sekel, Brian
Publication:Real Estate Weekly
Date:Mar 24, 1993
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