Morgan Stanley Picks Up 1 MSF Portfolio

Exit 8A Industrial Portfolio, developed by Matrix Development Group over a four-year period that concluded in 1989, takes its name from its location; the assets sit in the New Jersey Turnpike Exit 8A submarket.

March 28, 2011
By Barbra Murray, Contributing Editor

Morgan Stanley’s Prime Property Fund emerged victorious in a heated bid for a 1 million-square-foot multi-property industrial portfolio in New Jersey. BlackRock Inc. was the seller.

Exit 8A Industrial Portfolio, developed by Matrix Development Group over a four-year period that concluded in 1989, takes its name from its location; the assets sit in the New Jersey Turnpike Exit 8A submarket. The properties include buildings at 3 and 6 Fitzgerald Ave., which account for a respective 151,000 and 204,000 square feet; a two-property complex consisting of the 170,000-square-foot building at 3 Middlesex Ave. and the 195,000-square-foot facility at 17 Middlesex Ave.; the 145,000-square-foot 28 Engelhard Dr.; and 32 Commerce Court, a 161,500-square-foot property.

Among Exit 8A Industrial’s coveted features is a prime location that provides easy access to such vital transportation options as the ports of New Jersey and New York, Newark Liberty International Airport and a bevy of core thoroughfares. The portfolio is 93 percent leased to a list of occupants that includes Villeroy & Boch, Dr. Jay’s, Vertis, NAL Worldwide, Santini/NYDC, Hair System, Illinois Tool Works and Sonsopete/Pack-Rat. And its occupancy level is relatively high in comparison to neighboring submarkets. The average vacancy rate in Central New Jersey is 11.5 percent, according to a fourth quarter report by Cushman & Wakefield Inc., the commercial real estate services firm that marketed the portfolio on behalf of BlackRock.

Cushman had its hands full fielding inquiries from eager investors. The firm received over 25 offers less than a month after the portfolio had been put up for grabs.

“There is still a lot more capital chasing deals than there is product available, but this sale demonstrates the ability and willingness of many investors to write big checks to buy down at 8A,” Andrew Merin, a broker with Cushman’s ‘s Metropolitan Area Capital Markets Group, East Rutherford, N.J., noted. “The market has clearly turned the corner and when we look back, people will probably say that this sale was the kick-off of a return to a more active trading market in the Exit 8A submarket.”