NUTLEY, NJ–Roche, the Swiss pharmaceutical company, announced Tuesday that it will shutter its research center in Nutley at the end of next year, after 80 years of operation in the North Jersey suburb. This means the loss of 1,000 jobs – and, commercial real estate experts said, a huge new hole blown into the market.
Roche announced it will build a smaller facility employing 240 people somewhere on the East Coast to handle late-stage R & D, but said it has not yet identified a site. Roche plans to sell the Nutley property by 2015, and consolidate most R&D activities in its offices in Switzerland and Germany.
“Nutley’s legacy and footprint as a much larger former regional headquarters and manufacturing site left us with an expensive and oversized infrastructure,” says Tom Lyon, the site head in Nutley. “While we have made notable progress to cut costs by more than 50% in the past two and a half years, it was not enough.”
Christopher E. Kinum, the head of Cushman & Wakefield’s Global Life Science practice tells GlobeSt.com that finding a new tenant for a large research lab site in the current economic climate presents a formidable “challenge.”
“This is the third extremely large site in the area that is now going to be either totally vacated, or partly vacated,” says Kinum. “Conservatively, that makes about five or six million square feet of expensive research/lab space available.” His company is currently marketing Pfizer’s 2.8 million-square-foot Pearl River, NY property, where Pfizer plans to close all but one of its divisions by 2014, cutting 1,250 employees.
In Bridgewater, 1.3 million square feet at the Sanofi Aventis campus is also on the market, Kinum notes. Late last year, the French drugmaker announced a consolidation of its US operations, and said it will scale back to a single office in Bridgewater. The company said it also plans to open a new late-stage research center on the Bridgewater campus.
“All this is clearly the result of the economic times,” says Kinum, “but also it results from Big Pharma’s having made major acquisitions in the last one-to-five years. The result of those acquisitions is always consolidation, cost adjustment, reutilization of existing facilities and the closing of those that have become obsolete.”
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