PO Box 706, Allenwood, NJ 08720

Phone: 732-292-6000

Fax: 732-701-3618

Know Your Neighbor

For those of you residing or working in Monmouth and Ocean Counties here in New Jersey, you may recall a news report about a warehouse fire in the Sunset Industrial Park, Ocean Township. Apparently it was quite serious and had affected the operations of three businesses. I'm sure it also had a psychological effect on the other tenants in the building that weren't directly affected by the blaze. 

 This got me to thinking about how, for the sake of convenience or logistics, little consideration is given to what type of businesses are operating in the building that is being shared. Many of the type of industrial buildings that were built by real estate developers in Monmouth and Ocean Counties are designed for multiple tenants. Single story buildings that have separate entrances for each tenant, and can house a mix of light manufacturing and warehouse users to full office users like insurance companies or software development firms. Some names for these buildings are "flex" "swing" "incubator" "hybrid".

Over the years I've seen some pretty intense and even inappropriate operations going on in these types of buildings, with the other tenants in the building completely unaware of potential hazards. Some uses even defy logic. Schools and child daycare come to mind.

The potential for a noisy, dirty or hazardous use operating directly next door increases with the type of zoning the building is located within. The heavier the industrial zone, the more intense manufacturing, fabrication, chemical and heavy trucking is permitted to operate. And it's not like there's a concrete block wall separating the tenants. The demising walls are usually two hour fire rated gypsum board (sheet rock).

However, there are some real advantages to operating a business in "flex" buildings.

  • They're scalable. The tenant has the potential to shrink or grow your space as the needed.
  • There's no cost for common areas. If the tenant is an office user there are no lobby or common corridors to be charged for. The tenant pays rent only on the space that is being used.
  • They're convenient. Employees walk from the parking lot directly into the space, and don't have to travel through a lobby and up an elevator just to get to the front door.
  • They're cost effective. The utilities are separately metered. The tenant pays the gas and electric directly to the utility companies. This is a real advantage if the tenant works long hours and on weekends. In multi-story, multi-tenanted office buildings, this can be an expensive per hour charge. In many cases the systems for the entire floor has to be turned on to accommodate a tenant occupying only a portion of the floor.

What's important to include in your checklist should you be considering to lease in one of these buildings is who you will be sharing the building with. As a matter of course we, at LPJ Commercial, ask the landlord what the other uses are in the building. However, in order to avoid ending up with a potentially disruptive or hazardous tenant next door at some future point, it's best to select a building located in one of the lighter industrial zones. We would advise you on that as well.

  

 

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