Here is a roundup of the latest leases, sales and other transactions in the Northeast middle markets.
This week by the numbers
As industrial development is booming nationally thanks to the rise of e-commerce, Yardi Matrix looked at the top 50 cities which have substantially contributed to the addition of much-needed industrial space across the U.S. in the past decade. Among the highlights for New Jersey over the past decade:
- New Jersey is the top East Coast market for industrial development and 5th market nationwide, with a total of 54.9 million square feet delivered in 137 buildings since 2007;
- South Brunswick boasts 3.9 million square feet delivered in 9 buildings, the 2013-built 101 Middlesex Center Blvd having been the largest project completion in the last 10 years; two new developments are expected to hit the market this year in South Brunswick, Bridge Development Partners’ Bridge Point Turnpike 8A Broadway Road and Clarion Partners’ Park 130 – Building 3; Robbinsville and Easton also made the cut with a total of 5.7 million square feet delivered, the 2013-built Matrix Business Park at 7A – 50 New Canton Way (1M sq. ft.) and the 33 Logistics Park 1610 (1.1M sq. ft.) completed in 2016 were the biggest projects to come online in the area since 2007;
- In the Lehigh Valley, Bethlehem added the largest amount of industrial space, 7.9 million square feet in 16 buildings, ranking 17th on the Yardi list; the LEED-proposed Majestic Bethlehem Center – Building 3 is expected to add another million to Bethlehem’s inventory.
The continued lack of availability of adequate industrial space, and increasing demand drives landlord optimism to achieve higher standard market rents, according to Douglas Ressler of Yardi.com. Aggressive pricing strategies forced average asking rates to $7.09 per square foot, an increase of 11.6 percent year over year. However, in some submarkets, the rental rate growth is even more acute. For example, in the Meadowlands where class A and B asking rates have reached low-to-mid double-digit figures, asking rental rates increased 16.6 percent year-over-year. As a result of the tight market, renewal activity is on the rise. Q2 2017 witnessed a 55.8% increase in renewals quarter-over-quarter. Tenants are staying in place because there is nowhere else to go, and landlords are reaping the benefits of these market dynamics.
Deal Tracker Daily
NEW YORK, NY—Equity Office signed a new lease with GameChanger Media, Inc. at 44 Wall Street, in its 355,000-square-foot FiDi tower. GameChanger, which produces the leading digital scorekeeping app for amateur sports teams, will occupy approximately 17,000 square feet across the entire 11th floor of the tower. The subsidiary of DICK’S Sporting Goods will relocate from 86 Chambers Street in October 2017. Equity Office is in the midst of a modernization program at the historic building, which includes a reimagined lobby and the construction of prebuilt office space, including the prebuilt floor that GameChanger will occupy. Outfitted with high-end finishes, the floor was designed with a creative and contemporary vibe. It features an open layout, 12’ ceilings, polished concrete flooring, exposed brick, abundant natural light, and open pantry.
NUTLEY, NJ—Tulfra Real Estate acquired 10 Kingsland Street, a 6.5-acre property located behind the Route 3 Eastbound corridor in Clifton and Nutley, New Jersey. The property had been vacant for more than a decade. Tulfra was represented by Jason Sobel of Sills Cummis & Gross, Newark, NJ. Chis Richter of Avison Young successfully obtained the land use for the ownership. The property was acquired from a out-of-state corporation. 10 Kingsland Street is located a half-mile from the Passaic River and 1,000 feet from the Route 3 corridor which runs through Clifton, N.J. Development on 10 Kingsland Road would be located in a prime, easily accessible area, joining retail powerhouses such as AMC Clifton Commons 16 movie theatre, Kohl’s and Barnes & Noble.
PHILADELPHIA, PA—City Line Capital has completed its eleventh self-storage property acquisition in the past six months. The company’s portfolio now totals over 700,000 rentable square feet across eight different states including Colorado, Michigan, Florida, Texas, Pennsylvania, Louisiana, North Carolina and South Carolina. The properties have been rebranded and are being managed by industry-leading third-party management firms. City Line Capital continues to aggressively seek self-storage properties nationwide, and currently has six additional properties under agreement, totaling approximately 350,000 rentable square feet.
FAIRFIELD, NJ—Accordia Realty Ventures has recently signed 57,000 square feet of lease renewals and expansions at Greenbrook Executive Center, Northern New Jersey’s premier office destination. Renewals include: Dentistry Today, Synergy, Financial Northeastern, and Strategic Family Wealth. Expansions are Halen Brands and Macaluso.
PHILADELPHIA, PA—PernaFrederick Commercial Real Estate has arranged two lease agreements for approximately 7,946 square feet of office space at 123 South Broad and 1608 Walnut Streets here that have a combined aggregate rental exceeding $1.1 million. Joe Viturello, a vice president at PernaFrederick, brokered both of the agreements. The law firm of Rosen, Schafer & Dimeo will relocate from the North American Building, 121 South Broad, to approximately 4,208 square feet on the 21st floor of 123 South Broad. Viturello represented the law firm in finalizing the lease, while Steve Promislo, a broker with SSH Real Estate, represented 123 South Broad Partners, the private investment partnership that owns the 30-story, 892,000 square foot building. At 1608 Walnut Street, Viturello represented 1608 Walnut Street Associates, the building owner, in the lease of approximately 3,738 square feet on the 8th floor of the 19-story 232,000 square foot building to Dryden Group, procurement consultants. Doug Himmelreich of Stockton Real Estate Advisers cooperated with PernaFrederick and represented the tenant in finalizing the terms of the lease that has an aggregate value exceeding $526,000.
BOSTON, MA—Mosaic on the Riverway, a mixed-income 145-unit residential building, has been awarded the Urban Land Institute (ULI) Terwilliger Center for Housing’s 2017 Jack Kemp Excellence in Affordable and Workforce Housing Award. The annual award, which honors developments that ensure housing affordability for people in a broad range of incomes, is provided to developments in which all or a portion of the units are affordable to households earning up to 120 percent of the area median income (AMI). Mosaic on the Riverway is located at 80 Fenwood Road, on the corner of Brookline Avenue and the Riverway. Mosaic on the Riverway includes 145 new units of housing, with 60 of the units affordable to those earning less than 60 percent of Area Median Income, and 43 new home ownership condominiums for residents earning 60 to 120 percent of AMI. The new building also addresses a childcare shortage in the Mission Hill area by creating a 9,000-square foot early childhood education center located on the ground floor that serves 90 children and is operated by the YMCA of Boston.
PISCATAWAY, NJ—Rockefeller Group has broken ground at its 228-acre site in Piscataway, NJ for the 2.2-million-square-foot Rockefeller Group Logistics Center. Rockefeller Group’s plans are propelled by the vigorous demand in New Jersey for modern, advanced-functionality distribution space with direct access to the region’s major transportation routes and robust labor pool. The Cushman & Wakefield team of Jules Nissim, Stan Danzig and Marc Petrella serves as the exclusive marketing and leasing agent for the development, which will comprise six buildings – available for requirements beginning in early 2018 – and represents a combination of speculative and build-to-suit opportunities. Rockefeller Group Logistics Center features properties ranging in size from 200,000 to more than 800,000 square feet, accommodating users with a wide variety of size and infrastructure requirements. Flexible transaction options will allow for users to lease or own space. Additional notable features and amenities include excess trailer parking for each individual building, on-site rail service, two means of ingress and egress to the site, and an in-place 30-year PILOT agreement.
PHILADELPHIA, PA—CBRE has successfully negotiated a long-term lease for the First Judicial District of Pennsylvania’s Probation and Pretrial Departments at 714 Market Street in Philadelphia, PA. FJD is currently located at 1401 Arch Street, but that building was recently sold by AFIAA to Philadelphia-based Alterra Property Group, which plans to convert the property into an apartment building upon FJD vacating the building. FJD had a lease through Q2 of 2020 at 1401 Arch Street, but, with CBRE’s help, was able to negotiate a lease termination agreement to vacate the property early. FJD will move into its new 120,000 square foot office space at 714 Market Street by the end of 2018. CBRE senior vice president, Michael Kane, negotiated on behalf of FJD.
HARTFORD, CT—RBH Group, the developer of Newark’s Teachers Village, completed financing and began construction on Hartford’s Teachers Corner, a mixed use apartment complex in downtown Hartford. Teachers Corner is located at 370 Asylum Street, at the intersection of Asylum and High Street. It is housed in a re-purposed, renovated commercial building in the heart of the downtown near Union Station and XL Center. The $20 million-dollar project, which includes land costs, will begin construction shortly and the project is scheduled to be completed by Fall 2018, ready for the new school year. The project will be pre-marketed to local teachers, offering housing to education professionals and other individuals who wish to work and reside in a rapidly revitalizing urban center. Of the 60 total units, 30% will be affordable, while 70% will be market rate, at rents affordable to teachers. Two thirds of the affordable units will be at 50% Area Median Income, including two units with a preference for veterans earning at or below 25% AMI. The other third of the affordable units will be affordable at 100% AMI. They will include studios, one- and two-bedroom units. A legal team from Hunton & Williams, which advised RBH Group’s legal team, was led by New York real estate partner Laurie A. Grasso and associate Douglas Hoffmann.
ALLENTOWN, PA—CBRE has been hired as the exclusive leasing agent for The Plaza at 835 Hamilton—a 244,545 square foot office building located at 835 W. Hamilton Street in downtown Allentown, PA. The eight-story Class A office building is owned by Harlyn Consulting. CBRE executive vice president, William Wolf, and vice president, Jody King, have been tapped to manage all of the leasing for the property, which also includes up to 5,000 square feet of retail availability on the first floor. Notable tenants at the building include PPL Gold Credit Union and BB&T Bank.
BROOKLYN, NY—Law firm Cole Schotz advised 60 Guilders in a $47 million joint venture with ASB Real Estate Investments to purchase a 185,000-square foot industrial building at 5110-5112 2nd Avenue, Brooklyn, New York. The Cole Schotz real estate team was comprised of members Leo Leyva and Jordan Metzger, and associates Matthew Schneid and Jonathan Goodelman.
PHILADELPHIA, PA—Industrial real estate professionals from Cushman & Wakefield’s Scranton, Harrisburg, Conshohocken, Philadelphia and Allentown offices partnered with volunteers at the Central Pennsylvania Food Bank to package 600 bags of apples – more than 3,000 pounds – for distribution to community members in need in central Pennsylvania. In addition, volunteers packaged boxes of general pantry items such as soup, pasta and cereal to distribute to armed forces personnel and families of veterans.