GlobeSt.com: What is the main service your clients are asking you to perform?

Slaght: Evaluate and purchase corporate surplus real estate. We’ve been called in by a number of clients to assist them in what they should do with their real estate. Many times we’ve devised what we call a high-performance sale/leaseback. … That’s all about making sure that they have the right-sized space for the way their employees work so that their employees can perform their best. Many times it will include the purchase of a facility with a leaseback and eventually redeploying space the seller no longer needs.

GlobeSt.com: What does it take to add value these days?

Slaght: Our development team is involved with a number of large developments. One of them, the Riverbend District Harrison, a large mixed-use, transit-oriented development project, is one of the finest examples of adding value to real estate you can find. Harrison historically was an industrial area, polluted over the years based on the type of industry that took place there. The Riverbend District will someday house thousands of residential multifamily units and millions of square feet of commercial space. From a development standpoint, Riverbend or another project Willow 14 in Hoboken, will be significant value creation.

Our leasing group over the last year took 445 South Street in Morris Township, NJ and leased out a significant amount of space in that building. This is an asset purchased by Advance a number of years ago, stripped to its shell and then redeveloped with no tenancy. That building today is leased up with Travelers, Marsh & McLennan and Covanta as lead tenants. And this was leased in one of the worst economies we’ve ever seen in real estate. This was done because it has a lot of the traditional real estate components – location and quality, Class A asset – but the tenants who lease space there were looking to maximize the way their employees work. The building was developed around the way people work today, which is a little bit different than what some of us older real estate pros were accustomed to.

GlobeSt.com: Does it take longer to realize the ROI on your work?

Slaght: When it relates to return on investment, time is the enemy. Today, you need to price that in the transaction. We typically don’t get involved with bidding wars. We prefer to work with owners of real estate to devise win/win scenarios. If you look back, there were a number of mid-decade acquisitions made by a lot of investors that may never produce the forecasted returns. Today, you need to do your best to price that in. Advance is currently pursuing multi-year development transactions which, particularly, in Harrison and Hoboken require site remediation, entitlements, approvals and, ultimately, building permits. Those projects, quite simply, take time. We know when we get into these types of transactions that they take time.

Other investments, including sale/leaseback and buy-to-suit, where we acquire real estate with the specific intent of one of our clients occupying that real estate, will produce an immediate return. But as it relates to ultimate return on investment, we all eventually need the market to turn up and improve. The difficulty has been in figuring out when that’s going to happen.

GlobeSt.com: In your brochure, you talk about perseverance. What does that refer to?

Slaght: Again, I’m going to focus on Riverbend in Harrison and Willow 14 in Hoboken, because they’re two great examples of projects needing perseverance. Each one had contaminated soils. Each one had to go through the full approvals process. In Kansas, you can go in with a set of building plans and, provided you’re not asking for variances, can get permits in 30 days. That’s great. Unfortunately, it’s not reality in terms of our trade area. In Harrison, Advance started the soils remediation in 2007. Since then there have been dozens of projects announced, promoted and eventually abandoned.

You have a couple of things happening: one, it’s not an easy business and requires a lot of expertise; it requires significant access to capital; and the economy. We started soil remediation in 2007 and the economy still hasn’t recovered. And Advance is going forward on that project, and someday that Riverbend project will be a thriving location.

GlobeSt.com: Are we still bumping along the bottom of the recovery?

Slaght: We sponsor the Advance and Rutgers report, written by Drs. Jim Hughes and Joe Seneca of the Edward Bloustein School of Planning and Public Policy. We have not yet experienced an upturn that would provide a whole lot of confidence. But this quarter’s report, which will be posted on our website later this week, does reflect the start of a few positive trends, particularly in public sector hiring. For Advance and others, this is critically important to eventually create the types of values we all believe will be created someday. We really need to see corporations commence hiring again.

We have not made a significant turn around the corner. Bottoms are impossible to predict. Many times you’re beyond it before you realize it. But in this report there are a couple of trends that we think are the start of a recovery which we expect to be slow, not V-shaped. It will be slow and continuous. But any news in this economy we’ve had for the last couple of years is good news.