Mack-Cali Snaps Up $368M Office Portfolio
- Mar 20, 2017
Madison, N.J.—HFF recently played a role in making history in the New Jersey commercial real estate market, arranging the disposition of a 1.1 million-square-foot office portfolio. Acting on behalf of RXR Realty, the commercial real estate and capital markets services provider sold the group of six assets to Mack-Cali Realty Corp. for $368 million, marking one of the largest office portfolio trades ever in the Garden State.
The collection of Northern New Jersey office properties, all sited in the Route 25 Corridor, includes 51, 101 and 103 JFK Parkway, which account for an aggregate 564,000 square feet of space in Short Hills. The three buildings were constructed between 1980 and 1985. The remaining three properties, 1, 3 and 7 Giralda Farms, are located in Madison. Built between 1983 and 2000, they encompass a total of 504,200 square feet.
“These are the best suburban office assets in the New Jersey market and they had not traded in well over a decade,” Jose Cruz, senior managing director with HFF, said in a prepared statement. In addition to boasting a certain prominence, the portfolio is also 91 percent leased, counting among its tenants the likes of KPMG, Merrill Lynch, Dun & Bradstreet, and Pfizer.
The remaining square footage provides more than spare elbowroom; it offers upside potential through increased rents. Per a fourth quarter 2016 report by commercial real estate services firm Newmark Grubb Knight Frank, at $33.61 per square-foot, the average asking rent for Class A space in the Route 24 Corridor exceeded the average in Northern New Jersey.
This year is likely to be a lively one on the office sales front in Northern New Jersey. Investor optimism, according to a 2016 forecast by Marcus & Millichap Real Estate Investment Services, is on the rise. “Robust space demand and subdued construction present an encouraging landscape for investors this year,” per the report.
Image courtesy of Yardi Matrix