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Peapod inks lease for Jersey City distribution center

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(Rendering by Prologis)
(Rendering by Prologis)

Though Peapod had considered a site in New York for its new distribution center, the online grocery seller has signed a long-term lease for 345,000 square feet of industrial space in Jersey City, moving forward on a $34.6 million Urban Transit Hub incentive it was awarded in May to open the facility in New Jersey and create 380 jobs for the state.

Peapod, a subsidiary of Ahold USA Inc., will roughly split 740,000 square feet of warehouse space in the planned 880,000-square-foot Pulaski Distribution Center with Imperial Bag & Paper Co., which was approved for a $29.1 million Grow New Jersey tax credit by the New Jersey Economic Development Authority in August.

According to Robert C. Kossar, executive managing director for Jones Lang LaSalle, which represented property owner Prologis in the lease transactions, "both companies went through an exhaustive process looking at properties close to New York because their businesses require them to be right on top of Manhattan, but a building like this flat out doesn't exist this close to New York City anywhere else."

"We were very focused on getting an e-commerce or a food business tenant for this property, and with Peapod, we got both," Kossar said.

CBRE represented Peapod on the lease.

In an e-mail through a spokesman, Lt. Gov. Kim Guadagno said both companies are "not only staying in New Jersey, but they're making significant financial investments and creating jobs for New Jerseyans," as Peapod will make a capital investment of more than $94 million, create 380 new jobs and 242 construction jobs and retain 90 jobs in the state, and Imperial Bag will make a capital investment of more than $57 million, create nearly 390 construction jobs and retain 364 jobs in the state.

"By working cooperatively with both companies, New Jersey was able to ensure that these companies and their workers not only stay in New Jersey for years to come, but also provide new opportunities (for) New Jerseyans long into the future," Guadagno said in an e-mail.

In a statement, Jay Cornforth, president of the east region of Prologis, said the planned logistics facility — which is situated on a 50-acre former landfill site — "is an important development project for Jersey City that will transform this former waste disposal site, help to advance economic conditions and improve the local community."

Kossar said construction on the warehouse is scheduled to be completed by the end of 2013 and prepared for occupancy by early 2014.

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