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Freehold Business Park trades for $15.2M

The Freehold Business Park at 1 Business Park Drive in Monmouth County is a six-building industrial property with 90,677 square feet. – CBRE

With six buildings totaling 90,677 square feet, the Freehold Business Park has been sold in a deal closed by CBRE, the firm announced July 20.

MT Freehold BPD LLC acquired the package from Asbury Avenue Partners LLC for $15.2 million. In addition to the warehouse buildings, the portfolio also includes an approximately 1-acre lot that CBRE said could be developed into another more than 13,000-square-foot industrial property.

The CBRE Investment Properties team of Charles Berger, Elli Klapper, Mark Silverman and Jeremy Wernick worked with Lou Belfer and Scott Belfer of the firm’s Transaction & Advisory Group to represent the seller.

Freehold Business Park is situated on 14.27 acres at 1 Business Park Drive in Monmouth County’s Freehold. Constructed in 2007, the complex was renovated in 2021 to meet user-demand for high-quality industrial space.

“The sale of the properties within the Freehold Business Park represents the sixth transaction our team has completed in Freehold over the past few years, demonstrating the area’s status as a premier industrial submarket in Central New Jersey,” Berger said in a statement. “In fact, industrial real estate is now on par with the multifamily sector as one of the most highly coveted asset classes within commercial real estate, with both still trading at aggressive cap rates.”

Situated near Routes 33, 18 and 9, Interstate 95 and the Garden State Parkway, the complex is well-connected. Its tenants operate across a wide range of businesses providing a diversified investment for the buyer, CBRE said, adding that the purchase also offered the opportunity for long-term rent growth. Earlier this month, CBRE released its figures report for the Northern and Central New Jersey industrial markets, which showed that rents are are on the rise – by 13% quarter over quarter and 56% year over year – as the sector posts historically tight vacancies.

CBRE in the news:

CBRE: North, Central Jersey industrial rents continue to climb in Q2

Though leasing slowed some over the second quarter of 2022, net absorption for the period in the industrial sector was positive for the 22nd-straight quarter at 1.5 million square feet. According to CBRE‘s Q2 2022 Figures for the Northern and Central New Jersey industrial markets, released July 12, that number is unchanged from the first quarter’s total.

Meanwhile, rents were up across all classes in the sector (by 13% quarter over quarter and 56% year over year) to a new average high of $13.86 per-square-foot.

Q2 | Construction close-up

Seven buildings completed construction in Q2 2022, for a total of 1.0 million square feet with a cumulative pre-lease rate of 100%. Total new industrial product under construction was down 15% quarter over quarter and 3.7% year over year to 13.1 million square feet. Eleven projects began construction in the quarter.

Largest completion: 2525 Brunswick Ave. in Linden – 874,000 square feet, delivered fully leased to FedEx
Starts: 11, with an average size of 155,000 square feet
Largest start (Northern): 8 Peach Tree Road in Livingston
Largest start (Central): 2000 Hamilton Market Place Blvd. in Hamilton – 267,000 square feet from Black Creek

For Class A space, Q2 showed a 6.4% increase quarter over quarter and was 30% higher than Q2 of 2021, hitting an average $17.54 per square foot. CBRE attributed the rise from Q1 to a combination of landlords increasing rents amid the historically tight market – the overall vacancy rate was 2.2% in Q2 with a 0.8% rate for Class A space – and several construction starts in the relatively more expensive submarkets of Newark and Linden/Elizabeth.

In the North, the Newark submarket – the tightest in the state, according to CBRE – posted the highest Class A average asking rent, up 23% quarter over quarter and 87% year over year to $30.85 per-square-foot.

In the Central Region, the Linden/Elizabeth submarket’s $20.48 per-square-foot average asking rate was the highest, followed closely by Carteret/Avenel at $19.66 per square foot. In the latter submarket, CBRE noted that several 500,000-square-foot construction projects are underway. Overall, Class A asking rents were up by 8.3% quarter over quarter and 30% year over year in the region to an average $16.37 per square foot—a result of construction projects not just in Carteret/Avenel, but in the Suburban Essex and Route 287/Exit 10 submarkets, as well, in addition to the upward revision of rents at other developments.

Leasing for the second quarter was down 27% quarter over quarter and 45% year over year. While CBRE cited a lack of inventory as contributing to this decline, it also referenced increasing wariness from occupiers when it comes to large leases as the economy engenders skepticism.

Just 18 deals for 100,000 square feet or more were reached in Q2, while 33 were signed in the first quarter. Additionally, CBRE said the average deal size was down: at 198,000 square feet, compared to 205,000 square feet in Q1 2022.

CBRE Executive Vice President Thomas Monahan — Monahan

“Looming economic uncertainty created some headwinds for New Jersey’s industrial market, albeit fundamentally sound, causing employment gains to slow as economic conditions have tempered from just a few months ago,” Vice Chairman Thomas Monahan said in a statement.

“The quarter’s leasing volume was softer compared to previous periods reflecting both the lack of available product but also waning occupier demand,” he added.

Q2 | Leases to note

New: List Logistics – 703 Bartley Chester Road, Flanders – 844,000 square feet
Renewal: LG Electronics – 159 Milford Road, East Windsor – 410,000 square feet
New: Yami Buy – 1165 Cranbury South River Road, South Brunswick – 274,000 square feet
Expansion: Seko Logistics – 4 Aurora Drive, Cranbury – 198,000 square feet
New: Performance Team – 20 Tower Road, South Brunswick – 168,000 square feet

Altogether, leasing totaled 9.9 million square feet for the first half of the year, down 42% from same period in 2021, and 23% under the average of half-year-totals from the past five years. That activity saw the largest share of space go to third-party logistics companies (50%); manufacturing and wholesale/retail companies each accounting for 16%.

In the northern part of the state, the Morris submarket saw the most activity in Q2 with 894,000 square feet leased, including the largest lease across the combined Northern and Central market for Q2: List Logistics’ 844,000-square-foot deal in Flanders. Meanwhile, in Central Jersey Exit 8A scored the highest leasing total – 923,000 square feet – up 27% from Q1. Overall, the Central region shrunk by 23% quarter over quarter, recording 2.3 million square feet of new leases.

Faropoint acquires Oakland industrial property for $9.6M

CBRE announced it has arranged the $9.6 million acquisition of a fully leased 44,300-square-foot industrial property at 153 Bauer Drive in Oakland to Faropoint from Oakland Management. — 153 Bauer Drive in Oakland. – CBRE

Earlier this week, CBRE released figures for New Jersey’s Northern and Central industrial markets that showed a record-low availability of 4.4% for the second quarter of the year while asking rents continued to climb. Faropoint’s purchase of a 44,300-square-foot industrial property in Oakland comes amid that persistent demand.

CBRE announced July 13 it arranged the $9.6 million acquisition of 153 Bauer Drive from Oakland Management by real estate investment firm Faropoint.

The CBRE Tri-State Investment Properties team of Elli Klapper, Jeremy Wernick, Mark Silverman and Charles Berger along with CBRE’s Mark Trevisan, Kevin Dudley, Nick Klacik and Chad Hillyer, represented Faropoint in the negotiations.

The buyer, CBRE said, intends to hold the site as an industrial investment property.

“More than ever, investors recognize the crucial need for these types of properties, both existing and new construction,” Klapper said in a statement. “There has been a paradigm shift in the market as investors and developers see the long-term value of industrial commodities such as this, with excellent proximity to both vehicular transportation veins and major ports, and they are looking to expand their portfolios for long-term stability and future growth.”

A closer look

“The sale of this property represents one of the numerous industrial transactions our team has completed in New Jersey in just the past few months, demonstrating again the industrial market’s dominance in New Jersey,” CBRE’s Jeremy Wernick said.

“Across the region, and particularly in today’s tumultuous market, industrial properties are highly coveted due to the continuing supply chain shortages and need for warehouse and distribution centers.”

Get more details from the firm’s Q2 2022 Industrial Figures here.

And according to Orry Michael, northeast director of acquisitions for Faropoint, its purchase of 153 Bauer Drive is no exception.

“This was a strategic acquisition made by our team to expand our presence in Northern New Jersey where we already have considerable holdings,” Michael said. “High barriers to entry continue to stifle Class A development in the Northwest Bergen submarket due to constraints for readily available land zoned for industrial use. The area is experiencing surging demand and significant rental rate growth as tenants search for high-quality, functional product. We anticipate market fundamentals will remain strong, despite some of the volatility seen in other segments of the market.”

The Bergen County property is located minutes from Interstate 287, offering direct access to major thoroughfares across New Jersey and New York, in addition to Port Newark/Elizabeth.

The purchase also comes in the wake of big sale from Faropoint: the offloading of a portfolio comprised of 109 institutional-quality, last-mile logistics buildings to a private seller for $481 million.

With it’s U.S. headquarters in Hoboken, Faropoint focuses on last-mile industrial properties in high population growth markets. According to its website, the company’s portfolio currently includes three properties in New Jersey, in addition to others throughout the U.S. In April, it purchased an industrial property measuring 140,000 square feet located in South Jersey.

Editor’s note: This post was updated at 9:06 a.m. EDT on July 14, 2022, to include a box with remarks from CBRE’s Jeremy Wernick.

Dave’s Hot Chicken signs 1st NJ lease

Dave’s Hot Chicken and all the fixings: The fast-casual brand’s menu includes hot chicken tenders and sliders, house-made kale slaw, mac & cheese and crispy fries or cheese fries. – DAVE’S HOT CHICKEN

Dave’s Hot Chicken is ready to make its Garden State debut.

The Los Angeles-based fast-casual brand said this week it will open its first New Jersey shop in Passaic County operated by Amit Patel. The location is tentatively set for a winter 2022 opening.

“It’s exciting to get the ball rolling on Dave’s Hot Chicken’s entrance into New Jersey,” Patel said in a statement.

Dave’s Hot Chicken first announced it was coming to New Jersey in September 2021, when it signed a franchising agreement with Patel for 14 locations.

The eatery will be located in the West Belt Plaza at 57 Route 23 in Wayne—with easy access to main thoroughfares and near the Willowbrook Mall. Patel described the store’s location as “ideal … to establish our presence and draw customers in.”

His perspective extends beyond logistics to the business’s front-facing offerings, as well, as an experienced multi-unit operator who has also owned several Buffalo Wild Wings and Blaze Pizza franchises throughout the state, according to DHC.

“Dave’s Hot Chicken is unlike anything else found in the area, and I think this location gives us a great opportunity to introduce our craveable food to the people of New Jersey,” he said.

That food includes hot chicken tenders and sliders — whose spice levels can be adjusted anywhere from none to “Reaper” — in addition to the sides: house-made kale slaw, mac & cheese and fries or cheese fries.

Dave’s Hot Chicken was founded by Arman Oganesyan and Dave Kopushyan — a classically trained chef — in early 2017 as a parking lot pop-up. Now it has more than 60 locations across the U.S. and Canada, and is seeking to continue its growth. According to the brand, it has more than 700 units committed since its franchising initiative took off in 2019.

On the operating side, DHC describes its business model as robust, offering national and local marketing support; systems, manuals and operating procedures; and assistance with site selection. As far as that’s concerned, DHC said it looks for endcaps and freestanding locations, ideally between 2,000 square feet to 2,500 square feet—and if there’s drive-thru infrastructure that’s even better. CBRE’s Jay Miller and Nicole Nannola exclusively represent Dave’s Hot Chicken in its central and northern New Jersey expansion plans.

Joint venture to bring 1M-square-foot industrial development to Sayreville

Rendering for Arsenal Trade Center, a more than 1 million-square-foot industrial development coming to Sayreville from Trammell Crow Co. and joint venture partner CBRE Investment Management. – TRAMMELL CROW CO.

Central Jersey is getting a new logistics depot, as Trammell Crow Co. and joint venture partner CBRE Investment Management, on behalf of a fund it manages, get to work on a 1.08 million-square-foot industrial development in Sayreville.

Situated on 74 acres at 50 Minisink Road, construction on the three-building Arsenal Trade Center is set to begin this summer with completion anticipated for 2023, Trammel Crow announced June 21, along with the venture’s acquisition of the site.

Arsenal Trade Center’s three buildings will occupy 84,341 square feet, 341,833 square feet and 451,602 square feet, respectively. All rear-loading facilities, the buildings will each offer above standard car and trailer parking, Trammell said, along with 40-foot clear heights, full site circulation, and multiple entry and exit points.

“Arsenal Trade Center represents a unique opportunity to deliver a world-class logistics park in one of the most sought-after markets in the United States. Projects of this scale, design quality and strategic location simply do not come along often,” said Andrew Mele, managing director of TCC’s Northeast Metro office. “We are pleased to partner with CBRE Investment Management on this venture and combine our teams’ deep expertise in industrial development.

“Not only will this project bring in-demand warehouse space to the area, but it will also bring with it many pre- and post-development employment opportunities,” he added.

Mary Lang, head of Americas direct logistics strategies for CBRE Investment Management called Trammell Crow the “ideal partner” to bring the project to fruition efficiently, while also ensuring high quality so as to “both benefit our investors and capture continued user demand in one of the nation’s leading logistics corridors.

“This development represented a unique opportunity to meet a significant need for Class A logistics spaces in the Central and Northern New Jersey market,” she said in a statement.

According to CBRE’s, First Quarter 2022 NJ Industrial Figures report, Q1 marked the 21st consecutive period of occupancy growth, and a good deal of that is from the pre-leasing of new, Class A buildings. The firm’s Investment Management research pegs the availability rate for the submarket at 2.4% — near historic lows for the area — also as of Q1.

CBRE Senior Vice President Ben Shapiro acted as the seller’s — Hercules LLC, an affiliate of Ashland LLC — agent in the marketing and sale of the property. “This was truly a team effort between buyer and seller along with the Borough of Sayreville and the Sayreville Economic and Redevelopment Agency (SERA), its redevelopment agency, to redevelop an underutilized property,” he said. “All involved are looking forward to the transformation of this site.”

Construction financing, the firm said, was provided by QuadReal. Terms were not disclosed. KSS Architects is designing the project — which is seeking LEED Silver designation — with RC Anderson acting as general contractor.

The Arsenal Trade Center site is accessible to 2 million people within a 30-minute drive, New York City is about an hour away, with more than one-third of the U.S. population with a day’s drive.

In January, Trammell Crow announced it would bring the first independent, assisted living and memory care community to Fair Lawn in a joint venture with Chelsea Senior Living. That project is expected to be completed by the end of this year.

Grocery-anchored Essex Mall sells for $47M, CBRE says

CBRE announced the $47 million sale of Essex Mall, a 189,773-square-foot grocery-anchored shopping center in West Caldwell. — CBRE announced the sale of Essex Mall, located on Bloomfield Avenue in West Caldwell. – CBRE

New York-based Milbrook Properties is now the owner of the Essex Mall in West Caldwell, a 189,773-square-foot, grocery-anchored shopping center.

CBRE announced the $47 million sale of the complex June 7, which was acquired as part of a 1031 exchange.

A team of Jeffrey Dunne, David Gavin, Jeremy Neuer, Steve Bardsley and Travis Langer represented the owner — a joint venture of Stop & Shop, which anchors the center, and Goodrich Management. The group also procured Milbrook as the buyer.

“The offering represented a unique opportunity to purchase a grocery-anchored center offering highly stable income and no near-term rollover in Northern New Jersey,” Dunne said in a statement.

According to CBRE, Essex Mall is 97% leased and boasts a history of long-term tenancy. In addition to Stop & Shop, Marshalls anchors the site, which provides excellent frontage and access from West Caldwell’s Bloomfield Avenue. PNC Bank, a newly built-out Compassion First pet hospital, and Twisterz are among the mix of restaurants and service-oriented tenants that also occupy space at Essex Mall.

“We continue to see strong demand for retail centers like Essex Mall, which provide long-term cash flow and a highly attractive rent roll,” Gavin stated.

The complex at 875 Bloomfield Ave. is situated in an infill, high demographic market featuring a population of 172,000 within 5 miles and an average household income of more than $175,000, according to CBRE.

Milbrook Properties is a real estate management, acquisition and development company currently operating more than 75 properties across New Jersey, New York, Delaware and Florida.

CBRE arranges East Orange apartment building sale

CBRE announced the sale of 75 Prospect St. in East Orange in Essex County, a 44-unit apartment building that spans 10 stories. — 75 Prospect St. in East Orange is a 44-unit apartment building that spans 10 stories. – CBRE

OneWall Communities of Stamford, Conn., sold an apartment building in Essex County that stands 10 stories high with 44 units.

CBRE announced the sale of 75 Prospect St. in East Orange May 2. An Institutional Properties team of Jeffrey Dunne, Jeremy Neuer, Rich Gatto, Fahri Ozturk and Zach McHale represented OneWall Communities, the building owner and operator, in the transaction, while also procuring the unnamed buyer.

Financial terms of the transaction were not disclosed.

“This is a one-of-a-kind asset in the East Orange market,” Dunne said in a statement. “The average size of the apartments, 1,860 square feet, is unmatched and will likely never be replicated. The buyer thoroughly recognized the uniqueness of 75 Prospect and acted quickly and aggressively to secure the deal.”

Mostly comprised of three- and four-bedroom apartments, CBRE said the footprint for 75 Prospect’s living spaces typically stretch the length of the building from front to back, featuring windows offering an abundance of light to residents.

Over the past four months, CBRE’s Institutional Properties team has arranged the sale of nearly 500 units in East Orange and Newark on behalf OneWall for a total value of $83 million, according to the commercial real estate services and investment firm.

“We are very pleased to have represented OneWall Communities in the sale of their Essex County Portfolio,” Dunne added. “Investor interest for lifestyle-workforce housing product in transit-oriented locations proved to be very strong throughout our marketing efforts.”

Offering direct service to Manhattan in under 30 minutes, 75 Prospect is within a five-minute walk to the Brick Church train station. Its location also offers easy travel by automobile, less than 2 miles from the entrance ramps to both the Garden State Parkway and Interstate 280.

According to CBRE, its Institutional Properties team is also marketing investment opportunities including Fairview’s FIVE20 Views, a 111-unit Class A apartment community with unobstructed views of the New York City skyline; One23 Apartments in Union City, an 80-unit Class A multifamily community less than one mile from the Lincoln Tunnel; and Hudson Lights, a 276-unit Class A multifamily community adjacent to the George Washington Bridge in Fort Lee.

Berkadia adds NJ investment sales team from CBRE

Berkadia announced last week it is launching a new investment sales team in Morristown.

Joining from CBRE, the group — Senior Managing Director Nat Gambuzza, Senior Directors Spencer Beriont and Trevor Fiebel, Director Tim Blashford, Senior Transaction Manager Brian Antognini and Senior Financial Analyst Mike O’Reilly — will establish a new investment sales office for the firm, reporting to Executive Vice President, Co-Head of Investment Sales Keith Misner, Berkadia said.

“We’ve been expanding our presence in the Mid-Atlantic and Northeast significantly over the last 18 months with industry leading hires in Washington, D.C., and Boston,” Misner said in a statement. “We are very excited to add Nat and his team to that growing bench.

“This group is unmatched in experience and expertise in the region and across all client types, which is more crucial than ever as we see an increasingly diverse and aggressive investor pool looking to enter the multifamily space,” he added.

At CBRE, the team consistently ranked among that company’s top investment sales groups.

Gambuzza and his colleagues provide strategic insight and advice to private investors partnerships, leaders and institutions for transactions including portfolio sales, distressed property sales, note sales and 1031 tax exchange transactions. Recently, at CBRE, that’s resulted in the $14.33 million sale of a Ridgewood apartment complex. Last year, the group announced six sales transactions in April that added up to a cumulative $42 million.

“We’re thrilled to join Berkadia and to continue to affirm the company’s position as a leader in investment sales in the Northeast,” he said in a prepared statement. “In joining Berkadia’s robust platform, we’re eager to sustain the incredible momentum the industry saw in 2021 by bringing our clients the best suite of technology, resources and support to inform their strategic decision making. Together, we’re bringing the best services and solutions to help meet the needs of this evolving market and exceed our collective goals.”

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