Here is a roundup of the latest leases, sales and other transactions in the Northeast middle markets.
This week by the numbers
Strengthening employment trends helped Suburban Philadelphia’s office market post its strongest quarter of demand since 2005 in Q3 2017, according to CBRE. Some 4.9 million square feet of office space has been cumulatively absorbed by tenants over the past five years.
The vacancy rate in suburban offices dropped by 250 basis points over the past year—one of the sharpest declines on record – to 15.1 percent, only 20 basis points above the low achieved in 2008 of 14.9 percent.
The average asking rent for office space, however, declined last quarter, continuing a softening trend in rent growth over the last 18 months.
The answer, CBRE says, lies in the changing composition of available space with asking rents. More specifically, there is a diminishing amount of quality office space available for lease in the suburbs.
The highest rent submarkets, comprising the “Premier Suburbs” (Main Line, Bala, Conshohocken), were the first to experience the “flight to quality” trend in the suburbs, and are now operating with as little vacant space as they’ve had since the peak of the 2001 cycle.
With the lack of space available in the Premier Submarkets – and less of an influence on average asking lease rates – tenants have gravitated to adjacent options, mainly the Western Suburbs (Delaware County, Exton/West Chester, Upper Main Line) and King of Prussia/Valley Forge. But vacancy in the Western suburbs is dwindling and demand is soaring in King of Prussia/Valley Forge.
Deal Tracker Daily
DELRAN AND MOUNT LAUREL, NJ—Holliday Fenoglio Fowler arranged acquisition financing of $9.537 million for three industrial facilities totaling 254,496 square feet in southern New Jersey near Philadelphia, PA. HFF worked on behalf of Foxfield Industrial, a joint venture between Novaya Real Estate Ventures and Foxfield Ventures, to place separate floating-rate loans on each property with Webster Bank. The properties included were 600 and 601 Delran Parkway in Delran and 116 Gaither Drive in Mount Laurel (pictured). They are near Interstate 295 and the New Jersey Turnpike (Interstate 95), which provides easy access to Philadelphia, New York City, northern New Jersey, Baltimore and Washington, D.C. 600 and 601 Delran Parkway are 91,392 and 57,104 square feet, respectively, and feature 22 to 29-foot clear heights, a total of 26 loading docks and 40 by 40 column spacing. 116 Gaither Drive is a 106,000-square-foot class B+ warehouse and distribution facility fully leased to Food Sciences Corporation. The building features a 24-foot clear height and 13 loading doors. Both properties are expandable.
NEWARK, NJ—Two Gateway owner C&K Properties, Newark CEDC president Aisha Glover, =SPACE Founder Medina, and chief information officer Seth Wainer gathered earlier this week to launch the second annual Newark Tech Summit, a celebration of the entrepreneurs, non-profits, and influencers contributing to Newark’s blossoming technology scene. As part of the celebration, the collective unveiled a new 10 gigabit fixed wireless internet connection, the region’s fastest available internet, offered through the Newark Fiber program. Two Gateway, C&K Properties’ class A office building in the heart of downtown Newark, will be the first building in the city to utilize the 10 gigabit fixed wireless technology, which is offered through Newark Fiber and its network operator, GigXero. Last year, 2 Gateway became the charter member of Newark Fiber, which taps into Newark’s world-class fiber optic infrastructure to offer ultra-fast internet speeds at a fraction of the cost of similar commercially available fiber connections. Pictured are: Seth Wainer, Newark CIO; Sean Hairston, cofounder of =SPACE; Aisha Glover, CEO of Newark CEDC; Medina, co-founder of =SPACE; Ben Korman, President of C&K Properties; Kevin Collins, Managing Director of C&K Properties.
BOSTON, MA—Mayor Martin J. Walsh, members of the Downtown Crossing Business Improvement District (BID), and neighborhood residents joined Midwood Investment & Development to mark the groundbreaking of the the One Milk Street restoration project. Prominently located on the corner of Washington and Milk Streets in Boston, One Milk Street located in the historic “Newspaper Row”, consists of two buildings: The Franklin Building and The Transcript Building. The project is a 36,531-square-foot mixed-use renovation which will involve complete restoration of the Transcript and Franklin Buildings, which were previously connected via an infill building.
WESTPORT, CT—One of Connecticut’s most distinctive office properties – One Gorham Island in downtown Westport – has come onto the market for sale by Colliers International Group. The landmark, 41,000-square-foot building sits on a seven-acre private island on the Saugatuck River. The three-story building offers 360-degree, unobstructed river views with outdoor patios, and a wrap-around roof deck and garden. High-end renovations completed in 2016 and 2017 included updates to the lobby, roof terrace and common areas. Colliers’ Michael Gordon is marketing the property with Enzennio Mallozzi; the team is based in the global commercial real estate services firm’s Stamford, CT, office.
TOMS RIVER, NJ—Commercial real estate services firm Levin Management Corporation has been named exclusive leasing and managing agent for Commons at Hooper, a 120,350-square-foot community shopping center in Toms River. Strategically located at 1350 Hooper Ave., Commons at Hooper is anchored by Michaels and DSW Designer Shoe Warehouse, and complemented by a strong mix of retail, restaurant and service tenants including Dollar Tree, Mattress Firm, Hand & Stone Massage and Facial Spa, Dress Barn and Jersey Mike’s, among others.
HACKETTSTOWN, NJ—Cushman & Wakefield’s Metropolitan Area Capital Markets Group has arranged the trade of Hackettstown Commerce Park, a 197,438-square-foot flex/industrial campus with nearly eight acres of developable land in Warren County. Devli Group purchased the asset from Hampshire Management Company. Consisting of three buildings and two land parcels on Bilby Road and Willow Grove Street in Hackettstown, Hackettstown Commerce Park is currently 88 percent leased to 11 tenants. Investor interest in the Park was due to its long history of tenant retention (7.7 years weighted average remaining lease term), and its value-add opportunity to lease up the remaining vacancy and ability to create additional inventory on approximately eight acres of excess developable land (2.75-acre plot already approved for a 25,000-square-foot building).
HOWELL TOWNSHIP, NJ—Eastern Union Funding says Aryeh Miller has joined the firm as director of business development for the launch of its new Affiliate Broker Division. A native of Manchester, England, Miller comes to Eastern Union Funding from Superior Healthcare Group on Long Island, a nursing home group that owns and operates a portfolio of 17 nursing homes.
PHILADELPHIA, PA—CBRE says Matthew Gorman, Michael Shover, Marc Mandel and Stephen Schrenk of CBRE’s Mid-Atlantic Net Lease Property Group successfully closed 29 transactions in the third quarter, totaling $92.4 million. These most recent transactions spanned across eleven states and were a mix of restaurants (16, totaling more than $48 million), medical offices, automotive shops, drug stores, dollar stores and bank branches. One of the most notable transactions delivered in the third quarter included the sale of a Bassett Furniture store in King of Prussia, Pennsylvania for $11.750 million.
BRIDGEWATER, NJ – The Somerset County Business Partnership (SCBP) will recognize four organizations for their leadership in enhancing the economic competitiveness of Somerset County, including Advance Realty, which is receiving a 2017 Economic Vitality Award for creating the New Jersey Center for Excellence on Route 202/206 in Bridgewater. The Center of Excellence is attracting companies from throughout the world to Somerset County and will include recreational, residential, and restaurant amenities to compete its transition. Also receiving an award is Edgewood Properties, for its contribution to the rebirth of downtown Somerville with the construction of The Edge at Main, an upscale residential complex with exciting retail and restaurants on the street level a short walk to the Somerville train station.