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

In Jones Lang LaSalle’s second quarter report on the Philadelphia office market, Market West emerged from the second quarter with net positive absorption, a welcome change from recent history, but largely the result of long-planned relocations of existing tenants. 1735 Market continued to backfill its large blocks: Montgomery McCracken settled in on three floors, opening up the high-rise at 123 South Broad, and Brandywine Global has begun its transition back across the Schuylkill, creating a large block at Cira Centre. Departures and downsizings continue to offset gains, with Four Penn Center now marketing five full floors in the wake of CHUBB’s departure and Equus decamping for Newtown Square’s Ellis Preserve.

In Market East, the Public Ledger Building is poised to reposition as the western portion of the building changes hands and the departure of Health and Human Services to 801 Market creates opportunities to attract a new tenant mix. It is likely that the eastern-facing portion of the building will be redeveloped into residential or hotel. A proposal from the Philadelphia Bar Association and other non-profit partners would bring a new 173,000 square foot office building to 8th and Vine to house the Equal Justice Center, offsetting any inventory reductions at Public Ledger and bringing new ground-up construction product to this part of the city for the first time in decades.

Deal Tracker Daily

RAMSEY, NJ—The Office Court of Ramsey traded for $10.8 million to BHN Associates in a June sale orchestrated by Cushman & Wakefield. The 78,000-square-foot niche office park at 500 Lake Street sits immediately off Route 17 in one of the most densely populated and affluent areas of New Jersey. Cushman & Wakefield’s East Rutherford-based investment sales team brought the Bergen County property to market on behalf of the seller, a private ownership entity. The team, headed by Andrew Merin, included Andrew Schwartz and Ryan Larkin. The Office Court of Ramsey includes 11 buildings with tenant suites ranging from 200 to 5,000 square feet; it serves as home to over 100 tenants and is 95 percent occupied.

MANCHESTER, CT—Winstanley Enterprises of Concord, MA, has acquired the J.C. Penney distribution warehouse facility located at 1339 Tolland Turnpike in Manchester, CT for $70 million. The two-million square-foot facility boasts high visibility and convenient interstate highway access, connecting future tenants to the largest metropolitan hubs in the Northeast. Winstanley plans to make significant investments in the property including a new roof, building exterior enhancements, site and signage improvements, LED lighting, updated mechanical systems and a new EFSR sprinkler system. The improvements are estimated to cost approximately $40 million.

NUTLEY, NJ—Two retail leases were inked at 231-237 Franklin Ave. in Nutley, according to Cushman & Wakefield’s David Townes. The new tenants—Good Vibes Yoga & Kombucha Bar and Mathnasium—committed to 2,200 and 1,200 square feet, respectively. Townes orchestrated both leases on behalf of the landlord, a private ownership entity.

HOLMDEL, NJ—Somerset Development says Bar Method will be the newest retail tenant at Bell Works, the two-million-square-foot ‘metroburb’ in Holmdel, NJ. The boutique fitness studio will add a fitness venue to the building’s burgeoning pedestrian street, which includes a variety of shops, restaurants, healthcare and community services across the building’s famed quarter-mile atrium. Bar Method will occupy 2,100 square-feet of ground-floor retail space and is set to open in Q4 of 2018.

PHILADELPHIA, PA—PernaFrederick Commercial Real Estate has arranged three office lease agreements for approximately 11,045 square feet of downtown space with a combined aggregate rental exceeding $1.4 million. Joe Viturello, a vice president at PernaFrederick, arranged the agreements that will relocate two companies to 1608 Walnut Street and a third firm to 1218 Chestnut Street. At 1608 Walnut, the Trust for Public Land has leased approximately 3,600 square feet on the third floor of the 19-story building in a relocation from 1501 Cherry Street. In the second lease at 1608 Walnut, SP Plus Corporation is moving from 1835 Market Street to 1,845 square feet on the eighth floor. At 1218 Chestnut Street, Viturello represented Blackfynn Apex Holdings in an expansion of its offices to 5,600 square feet on the eight floor, from smaller offices at 121 South Broad Street. Blackfynn is a privately-owned life sciences company. SP Plus Corporation is a diverse provider of professional parking, ground transportation, facility maintenance, security, and event logistics services to real estate owners and managers in a wide array of markets.

NEW YORK (July 3, 2018)—RKF has arranged a lease for Los Tacos No. 1, its third New York City restaurant, at 136 Church Street in Tribeca. RKF managing director Neal Ohm and Eddie Mamiye represented Los Tacos No. 1 in the transaction. The RKF team of vice chairman Ariel Schuster, vice president Ross Berkowitz and managing director Andrew Stern represented building ownership, HUBB NYC. Los Tacos No. 1 will occupy 1,900 square feet—1,350 square feet on the ground floor and 550 square feet in the lower level.

Money Moves

ROCHESTER, NY—KeyBank Community Development Lending & Investment has provided $15.5 million in total financing to Home Leasing for the construction of Charlotte Square on the Loop in Rochester, NY. Key provided a $6.6 million construction loan, plus $8.9 million in Low-Income Housing Tax Credit equity. Upon completion, there will be 50 multifamily units ranging from studio, one- and two-bedroom apartments and townhomes targeting mixed-income households, with eight units set aside for individuals earning 30% area median income, 26 units for individuals earning 60% AMI and 16 units for individuals earning 80% AMI.

Executive Moves

EAST ORANGE, NJ—Emanuel Klein, co-founder of The Fountain Group based in Teaneck, has been appointed vice president of the Board of Directors of the East Orange Property Owners Association, an industry-unique commercial real estate membership organization committed to advancing the City of East Orange’s renaissance. The Fountain Group has developed and managed more than 700 units in the Northern New Jersey region and continues to grow its portfolio through residential, mixed-use and development projects throughout Northern New Jersey.

NEW YORK, NY—Further enhancing and expanding its focus on the industrial, logistics and retail leasing and sales in the outer boroughs of New York City, CBRE has hired Brad Cohen (pictured), Jacob Tzfanya and Jon Kamali, all formerly of Eastern Consolidated. Veteran local leasing experts, Cohen and Tzfanya join CBRE as senior vice presidents, along with Kamali, a technology expert who will serve as a senior associate.