PARAMUS, NJ—Marcus & Millichap arranged a 1031 exchange transaction involving the sales of two Northern New Jersey shopping centers for more than $29 million, and one of the brokers says the time constraints of 1031 transactions are prompting aggressive bidding that is driving prices upward in Northern New Jersey. Indeed, one of the two centers sold at one of the highest per-square-foot prices for a New Jersey multi-tenant center.

The properties are the Sprout Brook Shopping Center, a 21,875-square-foot multi-tenant retail center in Paramus, NJ that sold for more than $680 per square foot, and Franklin Commons, a 43,327-square-foot neighborhood shopping center and medical office building that brought $14,825,000, or $342 per square foot. Sprout Brook Shopping Center is located on 2.4 acres at 556 Route 17 North in Paramus. At the time of the sale, the center was fully occupied. Built in 2007 on five acres, Franklin Commons is located at 454 Elizabeth Ave. in Franklin Township.

As reported in February, Eastern Union Funding arranged a refinancing for Sprout Brook Shopping Center's owner with five year non-recourse loan at 3.5 percent with 70 percent LTV through Flushing Savings Bank.

“For the past year, the market has been dominated by local investors and buyers from across the Hudson,” says Ben Sgambati, a vice president with Marcus & Millichap, who brokered the deal with vice president Alan Cafiero. “In particular, exchange buyers from New York City remain active in the market. Time constraints associated with 1031 transactions are prompting aggressive bidding and many of these investors are accustomed to higher-priced markets, driving Northern New Jersey prices upward.”

Cafiero and Sgambati represented both sellers, and procured the Sprout Brook Shopping Center buyer. John Abuja, vice president investments in Marcus & Millichap's Chicago Downtown office, secured the purchaser of Franklin Commons. Both assets were acquired as part of a 1031 exchange transaction. 

“The strength of New York City's job market has given stability to the Northern New Jersey retail market,” says Cafiero. “The vibrant economy, readily available low-cost financing and dropping vacancy are fueling investor demand.”