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PEAPACK, NJ-When London-based Pharmacia bought Upjohn a few years back, it promptly began scouting for a site in the world’s pharmaceutical capital–New Jersey–to relocate its world headquarters. The vacant 550,000-sf former headquarters of Beneficial Finance in this semi-rural community of only 2,300 was the perfect fit.

Now, however, it’s not enough. Company officials are looking to more than double the size of the 10-building campus, and recently floated a trial balloon before the community’s zoning and planning board on the project. Under current zoning, Pharmacia can build another 430,000 sf of space, but company officials are looking at as much as 650,000 sf.

Another option–leasing additional space nearby–is currently unworkable. As company spokesman Paul Fitzhenry recently told local reporters, “We’ve already leased all of the available space in the immediate vicinity.”

Indeed, despite several major office projects being done by the likes of Hines, Gale & Wentworth and the Advance Group, the vacancy rate in the I-78/287 submarket, encompassing Bridgewater, Bedminster and several other communities in central Somerset County, is about 5%, compared to 18% just a few years ago. Class A asking rents have climbed to a pricey $32-35 per sf.

Fueling Pharmacia’s growth, in addition to a hot product line that includes Rogaine, Nicorette, Celebrex and Detrol, is its recent acquisition of Monsanto, including its G.D. Searle drug unit. In about six months, the company plans to move some 1,200 sales and administrative people from Monsanto’s Chicago-area offices, increasing Pharmacia’s New Jersey workforce to more than 2,200. Worldwide, Pharmacia employs more than 60,000, and spends more than $2 billion on R&D alone.

As far as the expansion, local officials have expressed concerns about things like traffic, design and ongoing use of on-site ball fields by locals. Mayor Vincent Girardy and fellow board members, however, like the additional property taxes, and see the proposed project as an opportunity “to stabilize sewer rates.”

In any case, “We’re still in a preliminary stage on this project, according to Fitzhenry. “We want to make this a very open process.”

Besides the general size of the proposed project, Pharmacia has offered no concrete plans in terms of design, timeline, cost and other development factors.

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