Here is a roundup of the latest leases, sales and other transactions in the Northeast middle markets.
This week by the numbers
SADDLE BROOK, NJ—Propelled by a heady blend of high demand, high rents and low availability, New Jersey’s industrial real estate sector remained vibrant into the second quarter, according to CBRE’s Q2 2017 New Jersey Industrial MarketView Report.
Rental rate growth has been one of the most pronounced indicators of the industrial sector’s strength over the past several years. With low availability rates continuing to buoy pricing, an 8.1 percent surge in year-over-year rental rates amounts to the largest increase seen during any four consecutive quarters post-recession.
Average asking lease rates are up 26.6 percent from their Q1 2012 post-recession low. Growth realized in the past year has been particularly substantial, rising at least $0.10 per square foot each quarter. The state’s overall average asking lease rate increased to $6.52 per square foot, which amounts to a 1.6 percent quarter-over-quarter increase.
Availability, which had reached a post-recession low of seven percent in the third quarter of 2016, has since recorded a slight, nine-basis-point increase. This blip arose from the introduction of newly available space into the market, despite remaining occupied in most cases.
Deal Tracker Daily
BOSTON, MA—With Cambridge rents at historic highs, tenants are increasingly being drawn to inner suburban areas like Watertown, and more specifically to buildings that can create a Cambridge-like experience – brick and beam space, transit accessibility, and walkable amenities. Such selling points – all of which The RMR Group offers at 9 Galen Street, Watertown – have recently attracted both Core States Group and Socomec to the property. At 4,500 and 5,700 square feet respectively, the two tenants will both relocate from Cambridge in the coming months and build upon 9 Galen Street’s increasingly dynamic, multi-tenanted environment. Cresa’s John Coakley represented Core States Group while Patrick Verbeke from KW Commercial represented Socomec. Colliers representatives for The RMR Group, president James Elcock, executive vice president John Carroll III, senior vice president Bill Lynch, vice president Jason Rexinis, and associate Nora Smith, have been able to successfully market the Riverbend property.
NEW YORK, NY—CBRE’s Stuart Siegel, Matt Bergey and Kylie Van Buren represented owner Winter Properties in four new full-floor leases totaling 22,300 square feet at the newly-renovated 3 East 28th Street. The first lease with GenSight Biologies Inc. is for the entire 12th floor and newly-created rooftop. Charles Conwell III of ABS Partners Real Estate represented GenSight. The second lease with Senator International is for the entire ninth floor of the building. Senator was represented by Jones Lang LaSalle’s Jim Wenk and Kirill Azovtsev. The third lease with One Madison Group is for the entire eighth floor. Cynthia Wallenberger and Hayley Shoener of JLL represented One Madison. The fourth lease with Five Points is for the entire second floor. Michael Heaner of the Kaufman Organization represented Five Points. Asking rents were between $65-$85 per square foot in the four transactions.
NEW YORK, NY—New ferry landings have opened on the NYC Ferry South Brooklyn Route in Bay Ridge, Atlantic Basin, and Brooklyn Bridge Park (Pier 6), in New York Harbor. The NYC Ferry landings were designed by McLaren Engineering Group as part of New York City Economic Development Corporation’s NYC Ferry Service which launched in May 2017. The landings, estimated at $55 million, are integral to the new NYC Ferry service that will connect New Yorkers to hundreds of miles of the City’s waterfront– creating an affordable, efficient way to link city residents and commuters by water. McLaren is providing engineering consulting services on the development and design of 11 new and several upgraded NYC Ferry landings. The scope of the firm’s work includes design, planning, coordination, permitting, procurement and construction administration.
SPRINGFIELD, NJ—An exclusive collection of newly-renovated rental residences tucked away inside a private wooded community is now available at Summit Hill in Springfield, NJ. Developer KRE Group purchased the community earlier this year and invested in a wholesale modernization program. Renovated units feature reimagined open floorplans, brand new stainless-steel appliances and refinished oak hardwood flooring, among other interior enhancements. In addition to the unit renovations, the developers also plan to complete numerous capital improvements throughout the property, including a brand-new resident clubhouse and fitness center that will break ground this fall.
MOUNT LAUREL, NJ—Colliers International’s Southern New Jersey office arranged the sale of a fully leased, three-story, 33,000-square-foot office building in Hammonton, NJ for $6.175 million. The 10-acre property is situated at the signalized intersection of Routes 30 (White Horse Pike), 54 and 206. It is fully occupied by South Jersey Family Medical Center and South Jersey Energy Solutions, a subsidiary of South Jersey Industries. The seller, Hammonton 1, was represented by Evan Zweben of Colliers International. Dan Silvestri coordinated the sale on behalf of the Buyer, Interstate Commercial.
CHERRY HILL, NJ—A 110,000-square-foot industrial property in Cherry Hill traded this week in a $7.6 million sale arranged by Cushman & Wakefield. GTJ REIT purchased the fully leased asset at 1938 Olney Ave. Following a long-term lease and local relocation of its primary distribution facility in 2016, the property’s sole occupant, Avalon Flooring, invested in various improvements to the building including motion-sensor LED lighting, a racking system including heavy-load racks, a new HVAC system, an upgraded building facade and an office build-out. The property’s tenancy, recent improvements and location drew significant investor interest, according to Cushman & Wakefield’s Kyle Schmidt, who headed the sale assignment with Andrew Merin, David Bernhaut, Gary Gabriel and Brian Whitmer, Ryan Larkin and Andrew Schwartz – all members of the firm’s East Rutherford, NJ-based Metropolitan Area Capital Markets Group. The team worked with Philadelphia-based capital markets specialists Robert Yoshimura, Joseph Hill, Eric Mattson, and Joe Hill Jr. in representing the seller and procuring the buyer.
PHILADELPHIA, PA—Rittenhouse Capital Advisors has successfully arranged the financing for the acquisition of the 356,000 square-foot class-A office building known as the Great Valley Commerce Center. Located in Malvern, PA, the property is fully leased to credit tenants. The property was acquired for $73 million, and Rittenhouse Capital placed the first mortgage financing with a national bank in the amount of $54.25 million, or 74 percent leverage. The loan was structured as a CMBS execution and carries a 10-year term with the interest rate fixed at 4.48 percent. It amortizes over thirty years.
WALTHAM AND BOSTON, MA—NAI Hunneman recently completed a 7,997 square-foot office lease transaction with the University of Southern California’s Information Science Institute at 890 Winter Street in Waltham MA. The space marks the first Massachusetts location for the affiliate of USC’s Viterbi School of Engineering. The company also has locations in Arlington, VA and Marina Del Rey, CA. NAI Hunneman Executive Vice President Steve James and Associate Patrick Grady represented The University of Southern California in the transaction, while landlord Clarion Partners was represented by Perry Beal of Transwestern. Separately, NAI Hunneman completed a 6,400 square-foot lease transaction with Worcester Polytechnic Institute at the company’s headquarters building at 303 Congress Street in Boston’s Seaport District. The university is opening an innovation hub which will be used for industry centric meetings, classes, projects and events with many of the emerging technology tenants based in the area. NAI Hunneman Urban Advisory Group member Peter Evans represented the landlord, 303 Waterside Place, and procured WPI for the space that will be located on the first floor of 303 Congress Street.
FLUSHING, NY—Case Real Estate Capital has funded a $16 million first mortgage loan secured by a 20,803-square-foot redevelopment site in Flushing, New York to Regent Medical Properties. Loan proceeds will be utilized to facilitate the acquisition of land and initiate pre-development work on the site, which is slated for a twelve-story medical office building, an Ambulatory Surgery Center and street-level commercial space. The property is located in downtown Flushing, Queens, which over the last two decades has been one of the New York City’s fastest growing neighborhoods and continues to experience a development boom. The site sits adjacent to a high-profile redevelopment project that will transform a landmark theatre. In addition, it benefits from easy access to roadway and public transportation. The experienced borrower has developed or redeveloped eight other medical office buildings in the metro New York area during the last 15 years.
SOUTH BRUNSWICK, NJ—Holliday Fenoglio Fowler secured $14.9 million in financing for a 368,537-square-foot, rail-served warehouse distribution building and adjacent 16-acre development site located at 83 Stults Road in South Brunswick, NJ. HFF worked on behalf of the borrower, a partnership between EverWest Real Estate Partners, and Accordia Realty Ventures, to place the three-year, floating-rate loan through Malvern Federal Savings Bank. Loan proceeds will be used to cover acquisition and closing costs associated with the purchase, pay for planned capital improvements to the property and used for soft costs associated with securing approvals for the development site. The property is subject to a short-term sale-leaseback with Hermann Services Inc.
PHILADELPHIA, PA—Avison Young says Nick Aileo has joined the Philadelphia firm as Research Coordinator. Before Avison Young, Aileo completed three internships, including The Public Financial Management Group and Vanguard, where he concentrated in the areas of quantitative finance and risk management.