Middle Market Digest for the Northeast

Here is a roundup of Middle Market activity in the Northeast for Friday, December 30, 2016.

Commentary

A quiet holiday week wrapped up the year in the Northeast, with a few owners and developers taking advantage of continued low interest rates to reposition financing packages on several properties. Eastman Companies refinanced its Eisenhower Corporate Campus in Livingston, NJ for the second time in less than 10 years; and the Brooklyn Navy Yard Development Corporation refinanced outstanding EB-5 debt with two conventional loans totaling $62 million. As the new administration prepares to take office in less than a month, most observers are betting on continued low interest rates and tax relief.

Thanks to a brisk holiday season for retailers, both online and in bricks-and-mortar stores, capital continues to chase industrial properties in the New York-New Jersey metroplex as fast as ground can be broken, and many legacy multifamily properties are getting record sale prices as second and third-generation owners transition those assets to developers anxious to add amenities and attract a new cohort of millennial tenants.

By the Numbers

ELIZABETH, NJ—New Jersey’s economic growth hinges on the successful implementation of transportation and logistics initiatives designed to meet the demands of a rapidly changing world, according to speakers at NAIOP New Jersey’s Annual Transportation and Logistics Update, held at the NYSA Training Center in Elizabeth.  “New Jersey’s transportation system is the driver of our economy, and our port, roads, and bridges need to be developed and maintained to the highest standards possible,” said David Lambert, assistant commissioner of capital program management at the NJ Department of Transportation. According to Lambert, the state’s Transportation Trust Fund will generate $16 billion over the next eight years, an increase of $400 million per year. In 2017, the NJDOT and NJ Transit will share a total of $3.7 billion in state and federal funding. Lambert noted that NJ Transit plans to budget $1.7 billion for its positive train control system, which it projects will be completed by the end of 2018. In addition, more than $200 million will be earmarked for new buses, rail cars and light rail vehicles.

Building Blocks

CHERRY HILL, NJ—NFI Interactive Logistics is leasing 21,000 square feet at 220 Laurel Road, Voorhees, NJ from PREIT-Rubin, in a transaction brokered by Markheim Chalmers president Fred Berlinsky. The building housed the former offices of the Star Group, a defunct marketing, public relations, and advertising firm, within the Voorhees Town Center development.

NORTH BRUNSWICK, NJ—Middlesex County has retained DMR Architects to redesign its County Archive and Record Storage Building, County Highways and Bridges Complex Administration Building on Apple Orchard Rd., and the County Medical Examiner’s Office and Morgue on Livingston Ave., all in North Brunswick. With much of its tax and property deeds being kept and now issued online, one-third of The Archive and Record Storage building’s nearly 8,000 square feet will be reconfigured into satellite office space for the County Prosecutor and warehouse space for its large item storage.  Plans also include a new parking area, a new driveway off the main road, and a loading area for the warehouse space. The County Highways and Bridges building plans call for gutting the interior to make office space for its current, reduced staff and that of the Middlesex County Area Transit.  Plans also include a new roof, HVAC system and new windows. The current County Medical Examiner’s Office will be enlarging its cold storage capabilities from less than 400 square feet to close to 1,000 square feet in total by expanding it into an underutilized adjacent garage.  The existing office space will be reconfigured to accommodate medical doctors’ offices, medical investigators and clinical technicians.

DealTracker & Notables

MORRISTOWN, NJ—Avison Young’s Capital Markets Group arranged a $20 million term loan to refinance a new multi-family building in Hudson County. The five-year term loan refinanced the existing construction loan and provided cash-out equity. The Avison Young New Jersey Capital Markets Group team of George Gnad, Principal, Jonathan Kristofich, Vice President, and Michael Winters, Senior Associate, brokered the loan for the sponsor.

BROOKLYN, NY–Marcus & Millichap brokered the sale of 157 Smith Street, a 2,500-square foot development opportunity located in Brooklyn, NY, for $3.75 million, or $500 per buildable square foot. Jakub H. Nowak, Matthew Rosenzweig and Jesse Kay from Marcus & Millichap’s Brooklyn office, had the exclusive listing to market the property on behalf of the seller, a private investor. The buyer, a developer, was also secured and represented by the team.

MIDDLETOWN, PA—Madison Hawk Partners will conduct a sealed bid auction for a 167-acre development site in the Woodland Hills planned residential community in Middletown Borough, Dauphin County, PA. The offering includes a 12.5-acre site fully approved for the construction of 150 rental units in five separate buildings.  The remaining acreage has preliminary approval for the development of 290 for-sale, single-family homes.  Bids can be placed on the entire development or either parcel individually. The sealed bid deadline is Thursday, January 19, 2017.

ENGLEWOOD CLIFFS, NJ—Kennedy Funding Financial closed on a $1.705 million loan to EW Acquisition for working capital and to fund infrastructure improvements at The Seasons at East Windsor, a proposed 121-unit/148-bed assisted living facility located at 359 Princeton Road in East Windsor, NJ. The property was purchased in July 2005 for $625,000. The 89,038 square foot improvements are scheduled for completion in 2017 and situated on a 3.97-acre site. The development will contain a mix of assisted and memory care units.

PHILADELPHIA, PA—Jones Lang LaSalle named Brett Grifo a senior vice president in the Philadelphia office. Grifo will focus on investment sales of office product. He most recently spent seven years at a public real estate investment trust where he led acquisition, disposition and joint venture transactions totalling $2.2 billion.

HACKENSACK, NJ—William Hanson, SIOR, president of NAI James E. Hanson received the Pillar Award at the New Jersey chapter of the National Association for Industrial and Office Parks’ (NAIOP) Presidents Awards and Hall of Fame Dinner. The Pillar Award honors those whose involvement in leadership roles, advocacy and sponsorship has lifted the profile and influence of NAIOP.

FORT MONMOUTH, NJ—The Fort Monmouth Economic Revitalization Authority has issued requests for offers to purchase two tracts at the retired military base in Monmouth County. One is a 14-acre parcel of waterfront land and five buildings totaling 88,129 square feet, and includes a historic building, Allison Hall. The other parcel of 15 acres includes eight buildings totaling 184,207 square feet, of which two are regarded as historic. Allowable uses on the decommissioned base are medium density residential, institutional/civic, and/or office/research & development.