Middle Market Digest – The Northeast

Here is a roundup of the latest leases, sales and other transactions in the Northeast middle markets.

This week by the numbers

Projected rents are more than adequate in many markets to justify additional development of warehouses and distribution centers, according to a new report from CBRE.

CBRE analyzed the gap between pro forma rents in various markets – the rental rates that developers can reasonably expect to obtain on newly built warehouses – and breakeven rents, which are the rents they’d need to cover overall development costs. In the 10 major markets that CBRE examined, the former exceeded the latter by 20 to 40 percent.

These spreads also confirm that the current market for Industrial & Logistics real estate has growth remaining. Typically, a sign of waning momentum for a market comes when spreads between pro forma and breakeven rents narrow or vanish.

CBRE’s analysis found the largest rent spreads in cities such as Chicago (43 percent), Atlanta (38 percent), Phoenix (35 percent), Pennsylvania’s I-78/I-81 corridor (30 percent) and in Central New Jersey (21 percent).

“Central New Jersey’s 21 percent spread between pro forma and breakeven rents is indicative that warehouse development remains extremely profitable,” says Mindy Lissner, executive vice president, CBRE. “The market’s strong demand for quality industrial space has continued unabated over the past few years and predictions show it will remain a major trend moving forward. Given both market dynamics, development of new product makes perfect sense for investors, developers and space users.”

Deal Tracker Daily

MOUNT LAUREL, NJ—Colliers International concluded the sale of a 44,800-square-foot industrial building in Camden County for $2.5 million. The property, located at 100 Freeway Drive in Blackwood, NJ, is situated on 3.7 acres, has 18-foot clear ceilings, and approximately 5,000 square feet of office space. Colliers’ Marc Isdaner represented the buyer, FLCR in the transaction, which was financed by Bank of Hope. The seller, Colfin Cobalt I-II was represented by Flynn Company’s David Ricci and Tony Rod.

ENGLEWOOD AND PARAMUS, NJ—Cushman & Wakefield has been named leasing agent for two prime retail locations in Bergen County. David Townes, a retail leasing specialist based in the commercial real estate services firm’s East Rutherford, N.J., office, is heading the assignments to market 154 Route 4 East in Paramus and Palisades Shoppes in Englewood (pictured) on behalf of Glenmore Management, the properties’ owner. The Paramus opportunity features a 15,100-square-foot, free-standing retail asset with 95 feet of frontage on Route 4 – Bergen County’s premier retail corridor. The 1.7-acre site offers ample parking with a rear entrance and exit onto Paramus Road and close proximity to the Garden State Parkway with access from routes 4 and 17, which boast daily traffic counts of more than 129,000 and 146,000 vehicles, respectively. The property sits adjacent to the popular Garden State Plaza mall.

PISCATAWAY, NJ—Bussel Realty arranged the purchase of 1776 South Second Street, a 127,000-square-foot industrial building  in Piscataway, NJ, for $9.8 million. James Hodgkins, vice president of BRC worked with Progressive Realty to represent the buyer, Real Pro Piscataway. The seller, Gold American, was represented by Preferred Industrial. Occupying 14 acres, 1776 South Second Street is a 127,000-square-foot industrial property, near Routes 28 and 22, and I-287 with access to Exit 10 of the New Jersey Turnpike. The property features 2,000 square feet of offices, eight loading docks, two drive-in doors, 20-foot ceiling heights, free surface parking and 200 amps of power.

PITTSBURGH, PA—The NRP Group announced the launch of leasing at Phase I of Riverfront Landing, a privately financed luxury residential development in the Strip District in Pittsburgh. Known as Edge1909, the community was developed by The NRP Group in partnership with The Buncher Company, a leader in service-oriented businesses and real estate development. Featuring a mix of studio, one and two-bedroom floor plans, including ground-floor street accessible units and penthouse lofts, Edge1909 offers panoramic views of the downtown Pittsburgh skyline, the Allegheny River, and the iconic Strip District. Located at 1909 Waterfront Place along the Heritage Trail on the Allegheny River, in close proximity to the City’s Cultural District, multiple sports venues, and the area’s vibrant restaurant and nightlife scene, the community is part of a 51-acre master-planned development called Riverfront Landing that will bring over 800 luxury residential rental units, 46 high-end for-sale townhome residences, over 1,000,000  square feet of office space, along with hotels and retail space to Pittsburgh’s Strip District.

GLEN COVE, NY—Marcus & Millichap brokered the sale of 40 Herb Hill Road, a 10,000 square foot apartment building located in Glen Cove, Nassau County. The fully occupied building is on a half-acre of land walking distance to Glen Cove’s Downtown.

ENGLEWOOD, NJ—Downtown Englewood, known for its burgeoning cultural, shopping and entertainment offerings and prime access to New York City, is getting a major residential upgrade with the launch of One William, a new luxury rental community in the heart of the walkable town center. Located at 1 William Street, just off W. Palisade Avenue, One William delivers 185 rental residences to the Englewood market. Monthly rents currently start at $2,350. 

WALL TOWNSHIP, NJ —Holliday Fenoglio Fowler arranged the $41.5 million sale of Wall Towne Center, a 99,070-square-foot, fully leased, grocery-anchored retail center in the central New Jersey community of Wall Township. The HFF team marketed the property on behalf of the seller, AEW Capital Management, L.P. on behalf of one of its separate account clients.  DWS purchased the property free and clear of any mortgage financing. Wall Towne Center is anchored by ShopRite, the dominant grocery chain in New Jersey, and home to 12 other diverse tenants, including Great Clips, AT&T, GNC, Allstate Insurance, Cherry Blow Dry Bar, OceanFirst Bank, Lubrano’s Trattoria and PetValu.  Completed in 1997, the center most recently underwent renovations in 2017 when ShopRite expanded its space.  Situated on 11.81 acres at 2433-2445 Route 34, Wall Towne Center is the only grocery-anchored retail option on Route 34.  The center’s location is accessible to the neighboring municipalities of Manasquan, Point Pleasant, Bric and Brielle via the Route 35/70/34 intersection, which is less than one half mile southeast of the property. The HFF investment advisory team representing the seller included senior managing director Jose Cruz, managing directors Kevin O’Hearn and Chris Munley and senior directors Michael Oliver and Stephen Simonelli.

Executive Moves

DALLAS, TX—Crow Holdings Industrial, the industrial development division of Dallas‐based Crow Holdings, named Clark Machemer, formerly of the Rockefeller Group, as a senior managing director to lead CHI’s New Jersey office, completing CHI’s national platform build-out. Machemer joins CHI with 20 years of real estate development experience. He has been responsible for the leasing and development of more than 10 million square feet of industrial product, 1 million square feet of office product, and 250 residential units.  At Crow Holdings Industrial, Machemer will be responsible for establishing and growing CHI’s presence in the Northeast industrial market, primarily sourcing and executing on new ground-up development opportunities.

NORTH PLAINFIELD, NJ—Edward Chandler of Bound Brook, NJ, has been promoted to senior property manager at Levin Management Corporation. Chandler joined LMC in 2007 as assistant property manager and was promoted to property manager in 2009. He oversees the operation of a portfolio of shopping centers. In addition to supervising day-to-day operations, this includes establishing and maintaining positive relationships with tenants.