Liberty Property Trust to construct $1B campus in Camden

Natalie Kostelni
Reporter- Philadelphia Business Journal

Liberty Property Trust plans to construct a $1 billion “iconic skyline” along the Delaware River in Camden, N.J., that aims to become an integral component to the struggling city’s revitalization.
While the Malvern, Pa., real estate investment trust has owned office and industrial buildings in South Jersey, it has never invested in the city of Camden.

Liberty’s decision to make a significant commitment to Camden now is being driven by several demographic and market factors including an increasing desire of a younger workforce to live and work in dynamic urban environments, as well as lucrative tax incentives state officials put in place through its Grow New Jersey Assistance Program. Those combined have created a more attractive environment for private investment and made it less of a gamble.

Camden has been steadily trying to rise out of a decades-long doldrums that saw jobs and companies flee, crime and poverty rise and investment, especially from the private sector, lacking.
But state officials believe that the seeds for change have finally been sewn as a result of their efforts and those of others, who are banking on the city having a bright future.
There have been several high-profile companies that have decided to move there because of the tax breaks, including American Waterworks, Subaru of America Inc. and, more recently, an international metal recycling company.

Cooper Medical School is up and running, and now has an M.D. Anderson Cancer Center affiliated with it, and Brandywine Realty Trust (NYSE: BDN) was named master developer of 13 acres that Campbell Soup Co. owns and is expected to create a new gateway for Camden.
Those additions join some other established venues along the waterfront including Adventure Aquarium, Susquehanna Bank Center, Campbell’s Field and other attractions.
Camden wasn’t really on Liberty’s radar until some business leaders and others approached company executives nearly a year ago and encouraged them to consider taking a closer look and possibly making an investment. The conversations resulted in Liberty signing an agreement to acquire 16 waterfront acres from Steiner + Associates, which had long owned the land and had plans to develop it but never did.
Liberty then enlisted Robert A. M. Stern Architects to come up with a master plan for a mixed-use community that involves constructing up to 1.7 million square feet of office space in four to five buildings, four parking garages, a hotel with 120 to 140 rooms, and 325 apartments.

Dranoff Properties of Philadelphia has been retained to do the multifamily component. Retail and restaurants will also be part of the development as well as enhancing green spaces along the river. As Liberty (NYSE: LPT) has done at the Navy Yard, it will identify a hotel operator but retain design control over the structure so it fits within the overall scheme.
The plans are ambitious, especially in a market untested for something this grand and vast.
“The more we looked at this, we knew we needed a project of scale and we came to the conclusion we could create a real sense of place, a whole new neighborhood or piece of downtown Camden,” said John Gattuso, senior vice president at Liberty.
Construction could begin soon on parts of the plan. Liberty would like to break ground during the third quarter of next year and anticipates build out to take the next four to five years.
Gattuso said he is already in both early and advanced discussions with tenants that would fill the entire 1.7 million square feet of office space that is planned. This comes as companies continue to recognize they need to be located in environments and physical structures that can attract and retain high-caliber talent, especially as Baby Boomers retire and firms need to re-populate their workforce, Gattuso said. This is what Liberty intends to provide in Camden as it has done elsewhere.
There is also money at play. “Without the tax credits, you don’t have these conversations,” Gattuso said.
A likely scenario would have Liberty constructing build-to-suits for tenants, who would then take ownership of the buildings so they can reap the tax benefits awarded under the Grow N.J. program.
Could this be a new beginning for the beleaguered South Jersey city?
“What has been lacking in Camden is momentum and a committed developer to oversee that,” Gattuso said. “It starts with the vision and what would success look like. Success for Camden is having an individual call their spouse to have dinner along the river overlooking the Philadelphia skyline. That would happen because you would have done something there. You would have created an ambiance and created market demand for a nice restaurant."
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