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PRINCETON, NJ-Some two million sf of speculative space has been built in the Princeton, NJ office market over the last two years, and most of that has been rented already. Most of it has also been built in small chunks, usually no more than 100,000 sf at a time, in one- and two-story buildings arrayed along U.S. Route 1 in the 20-mile corridor between New Brunswick and Trenton. Most of tenants have been grabbing the space up in 25,000-sf or less increments, and much of the activity has been the expansion of existing operations.

So the University Square project in Princeton, with sitework just underway by Reckson Associates Realty, is more than a little unusual for this market–it totals 316,000 sf, all on spec, and the building will rise five stories. Smaller space users aren’t being targeted: “It is designed for tenants who need large blocks of space but don’t have many options,” explains Jeff Schotz, SVP and managing director for Reckson’s New Jersey operations, which are based in Short Hills.

Because lenders are still leery about financing speculative construction, Reckson is financing the $45 million University Square from internal sources.

University Square will have 60,000-sf floorplates and, according to Schotz, the target will be tenants who need at least half a floor. Rents will start at just under $33 per sf (the current market average is about $29 per sf), and tenants will pay their own electricity. Completion is slated for a year from now.

“While space is extremely tight in the market, tenants do have some options now,” says Schotz. “We are committed to making a significant investment in new development projects throughout the region.”

University Square is the first new construction by Reckson since the Melville, NY-based developer entered the NJ market three years ago. Reckson has acquired a number of existing properties in New Jersey, some class A and some that needed repositioning, and has also acquired enough land to build upwards of 1.6 million sf of space.

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