Avison Young’s New Jersey office handled a sale-leaseback for an industrial/flex building in Morris County.
The firm announced the transaction for the more than 135,000-square-foot building on March 28. Longpoint Realty Partners LP acquired 1 Wood Hollow Lane in Parsippany to extend the lease to the property’s current tenant, Allstate Can Corp.
Based in Morristown, AY Vice Presidents Matthew Turse and Timothy Cadigan along with Associate Grant Otto represented the seller and procured the buyer in the transaction.
The industrial property spans approximately 7 acres and can support a range of uses, including warehouse, manufacturing and flex. Located minutes from major roadways including Interstates 80, 46 and 287, 1 Wood Hollow Road’s 135,000 square feet includes 3,000 square feet of office space, 11 dock doors and 100 parking space.
According to AY, Allstate Can will continue to use the space for warehouse and light manufacturing.
“This transaction allowed our client to remain in a building that has continually served their operational and business development needs while generating cash flow through its sale,” Turse said in a statement. “As New Jersey’s industrial market continues to see demand outpace supply, the buyer of 1 Wood Hollow Road will greatly benefit from acquiring a well-occupied asset in one the state’s most coveted submarkets for industrial/flex space.”
According to AY’s Industrial Market Report for the Fourth Quarter of 2021, the most recent available, the state’s industrial sector saw a continuing decrease in overall vacancy in the quarter, landing at a 20-year low of 2.3%. Meanwhile at 3.0%, absorption in 2021 was as high as it has been since 2001.
Nationwide, sale-leaseback transactions posted a banner year in 2021, according to SLB Capital Advisors’ Sale Leaseback Market Update for spring 2022, which covers data through the fourth quarter of 2021. After dipping amid the pandemic in 2020, total deal count for sale-leasebacks rebounded from 505 to 790, just shy of the 795 SLB identified for 2019. The growth in 2021 marks a 56% increase from 2020.
In the sale-leaseback space, activity in the industrial segment is heightened, as well. According to SLB, in 2018 and 2019 the sector contributed about 42% to overall sale-leaseback activity. In the fourth quarter of 2021, SLB found industrial lead sale-leaseback transactions comprised 49% of the total, leading all other sectors.