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Sudler: On top of the industry but under the radar

Chatham developer prefers to keep a low profile

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Peter Sudler, president and CEO of Sudler Real Estate, in one of his Piscataway properties.
Peter Sudler, president and CEO of Sudler Real Estate, in one of his Piscataway properties. - (AARON HOUSTON)

As a former federal prosecutor, one who tried cases against New York Mafia bosses and the owners of Studio 54, Peter Sudler had his fill of the spotlight long ago.

So don't be surprised if you've heard little about the Sudler Cos., his family's quietly run, 107-year-old development firm, which he took over nearly 30 years ago after leaving the courtroom behind.

“My father and grandfather always had the philosophy of 'just stay under the radar,'” said Sudler, the firm's president and CEO. “And I had enough publicity when I was a prosecutor to last me forever, so I kind of just take it quietly.”

But Sudler isn't shunning the spotlight these days — in fact, he has a story he wants to tell after hunkering down during the recession: The Chatham-based firm has a ready-to-build pipeline of at least 2 to 3 million square feet of industrial space in New Jersey, after spending the last five years entitling land across its portfolio.

“We like to get out our message when we have a reason to get out our message,” said Sudler, who owns nearly 8 million square feet of commercial space.

It's a good time to be touting plans for new development. The northern and central New Jersey industrial market recorded more than 21 million square feet of leasing activity in 2013, the second-highest total in the last six years, according to the brokerage firm Cushman & Wakefield.

That brought vacancy down to 8.2 percent to begin the year, the lowest since 2009, as demand for warehouse and distribution space in the state continues to return.

Seeing those trend lines has helped Sudler Real Estate endure and evolve since its founding in 1907 by Sudler's grandfather, who started as a general contractor for restaurants in Newark.

Sudler joined the firm in 1985 following a career as an assistant U.S. Attorney and defense lawyer in New York, but only after his father forced his hand by saying he would sell the family business.

By 2008, Sudler was building around 1 million square feet annually, putting up big-box warehouses for tenants such as Tommy Hilfiger and Ford Motor Co.

But when the recession hit, “everything stopped … so we went into our management mode — just keep everything leased,” Sudler said.

The company also decided to invest in renovations at vacant properties in its portfolio, spending millions of dollars over the next several years.

Jeffrey Hale, Sudler's vice president of leasing, said the move allowed it to “go back to the marketplace with buildings that were fresh, repositioned, and be in a position to make transactions when the market turned around.”

The strategy has paid off at sites such as 8 Corporate Place, where Sudler spent $2.5 million in cash to renovate the aging, 163,000-square-foot vacant warehouse. This month, Schreiber Foods International is expected to move into the space under a lease inked last year.

Sudler's recession strategy also focused on the undeveloped land across its portfolio, moving to secure local approvals during the down years. It was a process that made good use of that time, as Sudler knows all too well that “it could take you two or three years, even in a town that wants you.”

“It just takes time. It's very frustrating because in the time it takes to get an approval, your market can turn, and that's what's dangerous,” Sudler said. But with entitlements in the bank, the company can tell a prospective tenant that “we can be in the dirt in 90 days if you give us a lease.'”

Today, Sudler has shovel-ready sites around the state, including parcels in its Piscataway corporate park that are approved for 90,000- and 275,000-square-foot buildings. It also has sites in Cranbury and Tinton Falls, plus a 140,000-square-foot project underway in Lakewood.

New development is picking up across the state, with 7 million square feet of new construction underway at year's end, according to Cushman & Wakefield.

But land is scarce, and having a site that's already entitled gives a major edge to a developer, said Stanley Danzig, an executive director in the brokerage firm's East Rutherford office.

“It has a much greater value, and you are at least armed to be able to do a build-to-suit, should one arise,” Danzig said. “Without fully entitled land, you're really nowhere — you're years away from being able to deliver product.”

For Sudler, having an active pipeline is due in large part to its financial flexibility. The company owns 100 percent of its portfolio, free of banks, pension funds and other institutional partners that could restrict cash flow for things such as speculative upgrades for its vacant buildings.

What's more, he estimates that 70 of the company's roughly 90 buildings carry no debt, a benefit “that saved us going through the bad times in 2008” and allows it to be flexible and competitive with prospective tenants.

Sudler also holds onto its buildings: He estimates he has sold six properties in 20 years, allowing it to keep a heavy presence in an industry that “has been good to us.” And he plans for the company “to be here for another hundred years.”

Whether that includes the fourth generation remains to be seen. Sudler's two sons, a 32-year-old Green Beret and a 30-year-old former Marine, have told him they don't want to join the family business; one is still in the military, and the other one is back in school.

Then again, Sudler had many similar conversations with his father as he was pursuing his law career.

“We'll see what happens in the future, but right now they both want to lead their own lives,” Sudler said. “And as a parent, I respect that. Sometimes you just have to get out of the way of your kids.”

E-mail to: josh@njbiz.com
On Twitter: @joshburdnj

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Joshua Burd

Joshua Burd

Josh Burd covers real estate, economic development and sports and entertainment. Before joining NJBIZ in 2011, he spent four years as a metro reporter in Central Jersey. His email is joshb@njbiz.com and he is @JoshBurdNJ on Twitter.

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