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By Bari Faye Siege
Property owners hate to spend money in a down market. But for David Sanzari, president and CEO of Alfred Sanzari Enterprises in Hackensack, even though spending money when you aren’t making any seems counterintuitive, reinvesting is the name of the game in a bear commercial real estate market.
“You want to be ready for when the market turns,” he says. “If it’s quiet out there and there is no activity, it’s the perfect time to be replacing systems, upgrading lobbies and doing whatever other reinvestment makes sense for the property. That way, when the building is occupied in an up market, there will be less interruption for tenants.”
Frank Pratt, Sanzari’s vice president of leasing and marketing, points out that now is a good time not only to buy quality work at the best pricing, but to demonstrate asset commitment. “In a down market, you realize cost benefits,” he says. “Construction costs drop and work can be done cheaper because when subcontractors can’t find work, they will bid on it with a lower labor factor.”
Sanzari’s 50-acre Glenpointe Complex is one case in point. The complex, located at the intersection of I-80 and I-95, about 2.5 miles from the George Washington Bridge, includes a 350-room Marriott Hotel and Conference Center (owned by Sanzari and managed by Marriott), 650,000 square feet of Class A office space, a 26,000-square-foot health spa, and 165 condos.
“About a year ago, we started an $11 million renovation project in the complex,” says Sanzari. “We spent $6 million in the office complex doing floors, ceilings, doors, and landscaping in the common areas—atriums, planters, fountains. We also spent another $5 million in the spa, and the balance in the hotel.”
The complex still has 130,000 square feet of empty space left to be leased, but the Sanzari team is confident that upgrading now will pay off later. “Glenpointe is really the pacesetter of Class A office space in Northern New Jersey and we want to keep that complex in that position,” Sanzari explains. “With the renovation complete, it is very attractive to incoming tenants. Our work there also shows we care about our existing tenants; we want them to see our reinvestment into our property and stay and renew leases.”
Barta points out that while Glenpointe is not the low-cost alternative in the marketplace, tenants come and stay because they want to be in a premier building. “If we allow the building to slip in market position, tenants will find somewhere else to go,” he says. “We want them to believe that the reason they chose Glenpointe is as valid today as it was 10 to 15 years ago.”
More than anything else, Sanzari is committed to safeguarding the company’s reputation. “We want the public to know that we have the staying power to invest in our properties during these hard times,” says Pratt. “That builds confidence.”
The Court Plaza Complex, located across from the Bergen County Courthouse, is a great example of just that. The 335,000-square-foot office complex includes three buildings. The 160,000-square-foot south building was fully leased by the County of Bergen when Sanzari bought it; 13 years later, the county built a building of its own.
Sanzari has completed an overhaul of the complex’s south building, according to Jerry Barta, vice president and director of leasing and marketing for the company. The building was gutted and the mechanical system was replaced, the HV/AC distribution system upgraded, and the elevators and lobbies were overhauled and redecorated. The company began remarketing, and now the building is 95 percent leased.
“We believe concretely that the work done at Court Plaza demonstrates to our tenants our ongoing commitment to the asset,” says Barta. “It shows we are willing to maintain the quality of the building that they relied on when they signed their lease. It’s important to the brokers, too. The broker puts faith in the landlord that the building will be maintained. When a landlord shows they have the strength and ability to do it in a down market, it is good for everyone.”
Following completion of the renovation, Sanzari posted video testimonials on its corporate website from executives, detailing their experiences as long-time tenants of Court Plaza. Each video testimonial speaks to Alfred Sanzari Enterprises’ stability in the marketplace, as well as to the company’s dedication to fulfilling its tenants’ wants and needs.
“David Sanzari is probably one of the highest quality individuals you would ever meet and a consummate professional when it comes to running a substantial, complicated office complex,” says Mike Sirota, co-managing partner at Cole, Schotz, Meisel, Forman & Leonard, P.A. in his video testimonial. “He is extraordinarily attentive to tenant needs, he understands what it takes to run a business like ours, and he manages himself and his operations in a way that facilitates enjoyment of the space and the ability to successfully operate a business.”
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