South Jersey industrial market picking up steam

SWEDESBORO, N.J. — Beginning at about 4 a.m., the first of three shifts of Taylor Farms employees gets busy preparing and packaging hundreds of food items in a warehouse-distribution center off Heron Drive in this South Jersey community.

"This is like rush hour for us," said Philip Camerota, maintenance manager of Taylor Farms.

The fresh fruit, vegetables, salads and sandwich wraps are all prepared in a sanitized environment kept at a cool 37 degrees. Twenty-two different machines are operating as Taylor workers keep up with the pace of the products systematically moving along conveyors.

By 5 a.m., the first trucks begin hauling the products to their final destination. Most of the packages are trucked to 600 stores throughout the mid-Atlantic region. Wawa accounts for about 80 percent of Taylor Farms business emanating from its 144,345-square-foot distribution center here in Gloucester County. The company employs 600 people at the facility.

Taylor Farms is part of a thriving food distribution industry that has clustered in South Jersey and is becoming a significant economic force in the region. It is also part of an even bigger and growing industrial and distribution real estate market in the southern part of the Garden State.

In 2012, the overall transportation, logistics and distribution sector employed 357,997 people in New Jersey, according to a study released this past spring by the New Jersey Department of Labor and Workforce Development. Food and grocery related industries ranked first with 28,912 workers, the report said.

These transportation and logistics companies employed 11.2 percent of the state's private sector workers and they had an average salary of $68,294. The sector also provides a huge financial boost to New Jersey's gross domestic product, contributing $47.7 billion in 2012, according to the report. That's was the sixth highest in the nation.

Liberty Property Trust of Malvern, Pa., has seized on this growing area of business and is one of the big players in the South Jersey industrial market. Of Liberty's 27 warehouse-distribution buildings totaling 3.88 million square feet in Gloucester County, 10 are occupied by companies involved in the food industry. Taylor Farms is one of Liberty's tenants and is among the reasons the real estate investment trust's South Jersey holdings are 98 percent leased up.

"It's consistently been a growing area for us," said Mark Goldstein, a vice president with Liberty who oversees its South Jersey industrial holdings.

One of the primary reasons this part of the Garden State is so attractive to food-related, health and other industries looking to distribute their goods is its access to the New Jersey Turnpike, I-295 and the Blue Route. It is also near the Port of Camden, not far from Philadelphia as well as the food distribution center in South Philadelphia.

Puratos Corp., a Belgian food maker based in Cherry Hill, N.J., just bought a 57,750-square-foot industrial building at 1705 Suckle Highway in Pennsauken, N.J., in Camden County. The company has a $50 million manufacturing plant next door and acquired the structure for future expansion and to consolidate another warehouse down the road.

"The market has been phenomenal," said Scott Mertz, a broker with NAI Mertz who represented Puratos. "The two biggest drivers have been health care and food."

Another reason driving South Jersey's distribution market is a lack of land that can be developed in the central and northern New Jersey distribution hubs at Exit 8A and above along the New Jersey Turnpike.

"The next market is South Jersey and a lot of the North and Central Jersey deals are trickling down," Mertz said. "Our prices are cheaper and the product is the same and our road distribution might even be better."

Puratos bought the building from Whitesell Construction Co., which is another industrial landlord in the South Jersey market.

Among some other food-related companies occupying space in South Jersey are J&J Snack Foods, Le Brea Bakery, RediPak, UniVeg and Little Caesars.

Another is Calavo Growers Inc., which warehouses and ships avocados that arrive from Mexico, California and other places. It occupies space at 100 Dartmouth Drive in Swedesboro, N.J. The company started out in 2006 in just a small portion of the 100,000 square feet it now occupies.

The company decided to move and grow in South Jersey because of the distribution network, population and ability to reach so many cities within a day's drive, said Michael Procak, general manager at Calavo. New Jersey is within a day's drive of 40 percent of the U.S. population. Calavo processes 50,000 cases of avocados a week, delivering them to grocery stores and restaurants, and has seen business grow 5 percent to 10 percent a year since moving to South Jersey.

Royal Ingredients is an example of the sheer variety of food-related companies in the market. It occupies nearly 100,000 square feet at 2085 Center Square Road in Swedesboro and processes bulk sugar from Central America and Mexico. It uses rail access just outside of its buildings to move tons of sugar to and from the Gloucester Port.

Tenant interest in South Jersey means Liberty is also look for opportunities to expand its presence.

"We are very actively growing our industrial portfolio," Liberty's Goldstein said.

It recently acquired 49 acres in Burlington County where it plans to eventually construct a 635,000-square-foot distribution center. In March, it will begin constructing a 210,000-square-foot building at the Commodore Business Center in Swedesboro, N.J., on speculation and will begin marketing another 300,000- square-foot building it now has on the drawing board.

Other companies are also looking to build on speculation and nearly a million square feet is set to get constructed over the next couple of years.

Source: Philly.com