The state’s commercial real estate market is going through a boom time. But just what does that look like? Several recent transactions demonstrate how robust the market is across a variety of sectors.
The biggest recent deal involved affiliates of privately owned international real estate investment and management firm Harbor Group International LLC, which announced a joint venture with Cammeby’s International Group on Sept. 1, to acquire a portfolio of multifamily assets throughout New Jersey for $1.05 billion.
The portfolio consists of 41 workforce housing communities, totaling 5,302 units. HGI will invest approximately $46 million for capital improvements and enhancements across the properties. The firm will renovate 50% of the interior units and invest in operational improvements throughout the portfolio.
“As we continue to expand our investment platform, the acquisition of the Garden State portfolio represents the large-scale, attractive opportunities Harbor Group International identifies for our investors. This portfolio offers significant value-add potential and mark-to-market opportunity amid growing demand for housing outside of large urban cities,” said HGI President Richard Litton.
The portfolio spans 14 cities in North, Central and South Jersey, with a concentration in Union, Morris and Essex counties. A majority of the properties are located in key suburban markets near major New Jersey employers, including Prudential Financial, Johnson & Johnson, Bayer Corp. and Quest Diagnostics. The portfolio assets are also proximate to other key markets and employment hubs, including New York City and Philadelphia.
Harbor Group Management Co., HGI’s property management arm, will assume the management of 10 assets within the portfolio.
Eastdil Secured brokered the transaction and advised on the debt alongside Meridian Capital Group. Lawrence Bryant at Williams Mullen served as counsel to HGI and Steven Fleissig at Greenberg Traurig served as counsel to the seller.
South Jersey cold storage
On Sept. 15 Newmark closed the $39.65 million sale of a 255,000-square-foot cold storage facility in Delanco to California-based Provender Partners LLC.
Newmark Senior Managing Director Kurt Montagano represented local South Jersey developer Stanker & Galetto Inc. in the sale to Newport Beach’s Provender Partners, which was also represented by Newmark.
Associate Ryan Guittare and Senior Managing Directors Mike Margolis and Dave Dolan provided support on the transaction.
Located at 1000 Coopertown Road, the newly constructed refrigerated and frozen food distribution facility recently underwent a 95,000-square-foot expansion to accommodate existing tenant MisfitsMarket Inc., which now occupies the full building.
Misfits Market is a food distribution, e-commerce service delivering directly to the consumer. Misfits works on the inefficiencies in the food supply chain by selling misshapen produce and mislabeled pantry items at a discount. Misfits services half of the geographic United States from its Delanco headquarters.
The facility offers access to all major roadways in South Jersey connecting the property to the entire Northeast Corridor. The property sits minutes from U.S. Route 130, the New Jersey Turnpike, Interstate 95, Route 90, and all major area bridges. It is situated within one of the highest performing, most sought-after micro-markets in the entire suburban Philadelphia area. Driven by a concentrated, talented labor pool; proximity to an abundant amenity base and excellent vehicular access; 1000 Coopertown Road is an ideal logistical location to distribute along the Northeast Corridor.
JLL Capital Markets said Sept. 14 that it arranged a $14.35 million refinancing for a three-property industrial portfolio totaling more than430,000 square feet in the Raritan Center Business Park in Edison.
JLL worked on behalf of the borrower, Summit Associates Inc., to place three, uncrossed fixed-rate loans with terms ranging from 10 to 12 years with a correspondent life insurance company. Loan proceeds were used to retire existing debt and fund minor tenant improvements.
The properties within the portfolio consist of the 199,494-square-foot building at 45 Fernwood Ave.; the 159,550-square-foot building at 110Newfield Ave.; and the 74,925-square-foot asset at 450 Raritan Center Parkway. Built between 1980 and 1991, the properties have maintained near full occupancy and are currently 99% leased to 20 tenants.
Located in the heart of Middlesex County, Raritan Center Business Park serves as a key infill distribution point for the subject’s tenants to reach both the New York City Metropolitan Area and southern New Jersey markets. The location provides tenants with direct access to a robust highway network that includes the New Jersey Turnpike, the Garden State Parkway and Interstate 287, each of which is less than 3 miles away. Additionally, the location provides tenants access to 19 major U.S. markets and nearly 33% of the U.S. population within 24 hours’ drive.
JLL Research’s Industrial Tenant Demand Study details the strength of the New Jersey Industrial market, which continues to demonstrate robust demand, heavily driven by port activity and e-commerce sales. Port Elizabeth-Newark is less than 25 miles from the properties, which has helped tighten market vacancy in Raritan Center Business Park to less than 1%, while average asking rents have exceeded $11 per square foot.
The JLL Capital Markets Debt Placement team representing the borrower was led by Senior Managing Director Michael Klein and Director Max Custer.
“We are pleased to have helped Summit Associates, Inc. with another set of long-term loans to refinance properties within the Raritan Center Business Park,” Klein said. “The strategic timing of rate lock and execution allowed the borrower to capitalize on a historically low interest rate environment while avoiding early prepayment fees.”
Jersey City portfolio
Gebroe-Hammer Associates said Sept. 14 that Executive Vice President Niko Nicolaou arranged the $21.45 million sale of a 134-unit multifamily portfolio spanning three of Jersey City’s 13 constituent neighborhoods. In the transaction, Nicolaou exclusively represented the seller, Coltown Properties, and procured the buyer, West of Hudson Properties. Brad Domenico of Progress Capital arranged financing.
The early-to-late-20th Century apartment assets included 150 and 154 Belmont Ave. (26 and 22 units, respectively); 201-203 Claremont Ave. (17 units); 33-35 Storms Ave. (12 units); 35 Kensington Ave. (31 units); and 590 Bergen Ave. (26 units). According to Nicolaou, each offers new ownership tremendous upside associated with being close to Journal Square, which is undergoing sweeping redevelopment.
“Jersey City and greater Hudson County are experiencing a new wave of tenant demand in the pandemic recovery period, specifically among upwardly mobile career starters and an advanced-degree executive-level tenant base,” he said. “As a result of this accelerated urban-suburban rental lifestyle demand directly across the Hudson River from Manhattan, the Coltown Portfolio and similar-caliber value-add infill-neighborhood apartment properties are at the top of investor wish lists,” said Nicolaou.
Pohatcong solar farm
Cushman & Wakefield arranged the sale of I-78 Solar Farm, a 49-acre site located just off Exit 3 of Interstate 78 in Warren County, the real estate services firm announced on Sept. 13. The final sale price was $3.5 million.
C&W’s Andy Merin, Kyle Schmidt, Andrew Schwartz, Jordan Sobel and Andre Balthazard represented the seller, RDG at Pohatcong LLC, and procured the buyer, Turner Group.
“Considering the enormous barrier to entry and the fact this site took 10 years of planning, negotiating and constructing to ultimately come online in January 2020, it’s no surprise that we saw strong interest in the I-78 Solar Farm,” said Schwartz.
The property is fully leased to NJR Clean Energy Ventures III, a subsidiary of New Jersey Resources Corp., on a long-term basis. I-78 Solar Farmhouses a brand new, state-of-the-art 10-megawatt solar farm installed and operated by NJR Clean Energy Ventures III—the largest owner-operator of solar farms in the state of New Jersey, with more than 50 solar farms in its portfolio.
The site is part of an overall 170-acre development, which, once constructed, will include 244 single-family townhomes and a 120-unit apartment complex.