"The most wonderful thing about Harsimus Cove South," says John J. Cali, "is that unlike any other project that’s been proposed in Jersey City — including the Colgate and Newport sites — we have all of the governmental approvals in place. [Development permits have been issued by the state Department of Environmental Protection and the Army Corps of Engineers.] We have a financially sound partner in D.K. Ludwig. His National Bulk Carriers bought the land and invited us to join them as developer. The first phase of the project was to be a complex of very elegant townhouses to be put on the shore. But when the residential market started going down, we decided it was the wrong time to launch a project of that size.
Cali's leasing and marketing department from left: James Nugent, Michael Nevins, Loretta Brodsky and John Crandall.
"We now are looking at doing some retail development that would complement the Newport Centre Mall and we are also exploring build-to-suit opportunities for large corporate office users. We believe in the Jersey City market and, when it improves, we’ll be poised to take advantage of that turnaround."
Association of the Cali name with quality office development in New Jersey has resulted in a number of strong assignments for the firm, exemplified by the invitation from D.K. Ludwig to develop Harsimus Cove South. Brant Cali acknowledges that the company is interested in exploring other joint venture development opportunities in the state. "Given an opportunity in, say, industrial warehousing development, it wouldn’t take very long for us to locate four or five potential sites and negotiate with the landholder," he maintains. "We have excellent in-house resources to put the pieces of the puzzle together and make it work for a user."
Cali has explored a joint venture with national retail developer The Hahn Company for a major regional mall in New Jersey, was selected by the Kean family of New Jersey to develop the Liberty Hall site in Union, and is working with Marriott on the possibility of a retirement community development, Brant Cali outlines. "We’re getting the attention of people who want to develop in New Jersey," he says. "They’re looking to us as a quality New Jersey arm of their development operation to help put product in place, as opposed to having the risk of exposing themselves in an unknown area."
For the first generation of Cali leadership, the satisfaction of an impressive commercial portfolio and a sound business reputation are rewards in and of themselves. "We are an organization of partners," John J. Cali stresses. "In bad times, there was never a drain on our organization with high-paid top executive salaries. The partners have always had enough income from their properties to live comfortably without draining the company. And that’s been a source of strength for us."
Adds Angelo Cali: "A long time ago when we were able to build more than one project at a time, we decided that building was a difficult process. It wasn’t easy and it wasn’t casual. Because we couldn’t get the kind of attention on the job from a hired superintendent, we made partnerships with our friends. And part of the quality of Cali buildings comes from that sense of responsibility. We don’t end up with terrible mistakes caused by inattentiveness."
Mr. Leshowitz, on the other hand, expresses pragmatic concerns for the company, especially in light of the current state of the overall real estate market. Having lived through a number of national economic and real estate recessions, he says this is the worst he can recall, since the oversupply of office space nationally and the recession are concurrent this time. "We find ourselves between two uneven things: a tenant’s market and loans that were based on much more favorable markets of the recent past. So, we have adopted an aggressive approach to do what we must to keep our buildings filled. We find New Jersey still healthy in terms of business, but the problem is too much space Ofl the market. There are still plenty of tenants out there, though."
‘Staying the Course’
For the second generation of Cali leadership, immediate plans call for staying the course in these economically troubled times and to maintain the high quality of the firm’s commercial portfolio.
"What I’ve found is that whatever thoughts and vision I’ve had have constantly changed with new learning experiences in the business," admits John R. Cali. "If anything, I recognize that it’s important to remain flexible to better serve clients and to effectively manage our properties.”
Meanwhile, the senior Cali principals remain extremely active in the firm. "I guess if we were working for a corporation, we would have been out a long time ago at our ages," says John J. Cali. "We consider ourselves very fortunate to have a private business and there were times in the past when we thought about going public. We’re so delighted that we never did, though. We enjoy coming into the office and maintaining a hands-on role in our business. And we’re remaining competitive because of that."
©Copyright 1991 Real Estate Forum