MIDDLETOWN, NJ-Memorial Sloan-Kettering will acquire the vacant former Lucent Technologies building here, filling a 288,000-square foot hole in a community where the office vacancy rate was 48% last year.
The building at 480 Red Hill Rd. off Garden State Parkway exit 114 was sold for $14 million by AEGON, which had originally been the lender for the development. It took back the building from Murray Construction, the builder and owner, in 2009.
CBRE Group brokered the sale deal for AEGON, while Cushman & Wakefield represented Memorial, which will retrofit the building as a cancer treatment center.
The hospital, which has another cancer center in Basking Ridge, plans to make the Middletown building suitable for ambulatory surgeries, medical and neurological oncology, chemotherapy, radiation therapy, diagnostic radiology, research trials and various medical services for cancer patients. Also, Memorial will house its main data center at the site.
CBRE’s Suzanne Macnow, who worked as a team with John Goodwin on the transaction, said that Monmouth County commercial real estate is on “a tremendous upswing.”
“The list of large-scale adaptive reuse projects continues to tick upward at a fast pace in communities such as Asbury Park, Tinton Falls, and Holmdel,” said Macnow. “This transaction will take an even bigger bite into that availability rate. Developers are seeing the potential and seizing upon opportunities to find new solutions that create valuable options for outdated properties.”
As of April 1, the county’s office vacancy rate stood at 27.3%, down 19 points from the end of last year. Still, that rate is higher than the statewide average of a little more than 20% for commercial office space.
There was net absorption of 1.77 million square feet in Monmouth County. But there is 4.32 million square feet in 27 buildings still available. The buildings have an average of 160,125 square feet each for the taking.
Macnow, who is also representing the owner of the former Asbury Park Press building in Neptune, said more such potential redevelopment sites are expected to hit the market in shore communities in the near future.
The Sloan-Kettering facility, planned to open sometime in 2016, will handle 200-500 patient daily. About 400 jobs will be created when it does, in an area that lost 1,000 jobs several years ago with the closing of Fort Monmouth.
The state Economic Development Authority approved a business incentive grant to Sloan-Kettering contingent on the jobs to be created at the data center.