An iconic Route 10 office tower will be demolished next year along with several other buildings on the Novartis Corp. campus in East Hanover to be replaced with modern industrial office space.
Russo Development and Onyx Equities announced the purchase of 62 acres along Route 10 and Ridgedale Avenue from Novartis and plan to eliminate 900,000 square feet of vacant office buildings, including the corner office building with the corporation's logo on top.
Demolition will likely begin in the second quarter of 2022, said Ed Russo, CEO of Russo Development. Groundbreaking on two new buildings ranging between 300,000 and 500,000 square feet should take place before the end of 2022.
“We are excited to redevelop a portion of one of northern New Jersey’s premier sites into a first-class industrial project,” Russo said. "We appreciate the opportunity to work with East Hanover and Novartis as the company transforms its East Hanover campus to a more flexible and collaborative workplace design.”
The site was carved from the 202-acre campus of Novartis' U.S. headquarters, largely consisting of the land adjacent to Route 10 east and Ridgedale Avenue. Novartis will continue to occupy the remainder of the land.
The new development will be one of the largest new industrial projects in Morris County, Russo said. Planning Board approval was obtained in July. The selling price was not released.
Representing one of Morris County's largest employers, the highly visible building was topped by a large "Sandoz" sign for decades.
The Swiss global pharma giant acquired the property in the late 1940s after outgrowing its offices in New York and began construction on the first buildings there in 1950.
Sandoz became one of Morris County's leading employers when it opened its East Hanover research facility in 1964. It merged with Summit-based Ciba-Geigy in 1996 to form Novartis. The company still has 4,800 employees assigned to the East Hanover campus, and 16,000 statewide, a Novartis spokesperson said.
Additional buildings along the Ridgedale Avenue corridor also are slated for demolition.
While the office market has contracted over the last decade, the market for industrial space in Morris County and New Jersey is robust, Russo said. Most of the buildings included in the sale were unoccupied when the property went on the market last year and were vacated before closing, Russo said.
"Industrial space, especially modern industrial space, is so scarce right now," Russo said. "The vacancy rates are almost zero."
He said the new buildings are characterized by single stories with high ceilings "that can accommodate uses that a traditional office building cannot, such as warehousing, R&D, manufacturing, data centers. Our company has built 10 data centers over the past 20 years."
“This project reflects Onyx’s strong track record of repositioning large corporate campuses and growing industrial pipeline, and will bring new jobs, businesses and commerce to East Hanover,” said Onyx Equities managing principal John Saraceno Jr. “Morris County is a jewel for commercial uses of all types because of its extensive highway system and pool of highly qualified, skilled labor.”
"There's great fiber optic and power infrastructure in the immediate vicinity," Russo added. "You have access to a great employment base."
The 202-acre property was assessed at $425 million this year, producing $10.2 million in property taxes for the township, tax records show.
“Novartis has been making changes to our East Hanover campus over the past few years to create a more flexible workplace design that provides our associates with more choice in where they work, both onsite and offsite, and fosters greater collaboration," th Novartis spokesperson said. "As this design is a more efficient use of space, we need fewer buildings to accommodate our employees’ workspaces and have divested approximately 62 of the 202 acres on the East Hanover Campus.”
The demolition will be done incrementally and will not involve implosion or explosives, Russo said.
This is the second joint venture between Onyx Equities and Russo Development, which are currently building Vermella Woodbridge, a mixed-use project with 500 apartments and 23,000 square feet of retail space, on 26 acres in Woodbridge acquired from Hess Corp. in 2020.
In addition to East Hanover, Russo and its partners have more than 6 million square feet of industrial projects ranging from 200,000 to 3 million square feet planned in various communities including Montville, Mahwah, Kearny and Lyndhurst.
William Westhoven is a local reporter for DailyRecord.com. For unlimited access to the most important news from your local community, please subscribe or activate your digital account today.
This article originally appeared on Morristown Daily Record: Novartis headquarters tower in East Hanover to be demolished