Gateway Tower Sells for $110M

Now, American Landmark Properties, based in Bensenville, IL is moving the building into its own portfolio for an estimated $110 million. According to observers, the increase in the building's market value of approximately 190% in just six years is an indication that Newark's downtown market has "arrived," in the words of one. The buyer and seller would not comment on the sale, which is expected to close shortly.

And in a related transaction, New York-based Carlton Advisory Services has closed on an $80 million loan for American Landmark Properties to facilitate the pending sale transaction. "The Gateway mortgage financing consisted of a senior loan with a pre-arranged B-piece lender closing simultaneously with a senior lender," according to a Carlton spokesman. "This simultaneous closing allowed the senior lender to issue a substantially unconditional commitment, and to close the transaction without any substantive changes in the deal."

The loan's interest rate was described by the Carlton spokesman are carrying "an extremely attractive interest rate." The money was provided by a major commercial bank and investment bank, which were not identified.

Two Gateway Center was built back in the early 1970's as part of the four-building Gateway Center. The complex sits right next to Newark's Penn Station, a major commuter and interstate rail hub, to which it's connected by covered walkways. Although once owned entirely by Prudential, the complex is now in the hands of multiple owners. A joint venture of Florham Park, NJ-based Gale & Wentworth and New York-based Tishman Speyer Properties owns towers One and Four, while New York-based Tahl-Propp Equities owns number Three.

Two Gateway is currently 95% leased, with Prudential Insurance occupying about half of it under a long-term lease. The Port Authority of NY/NJ is the second largest tenant, occupying the 100,000 sf it took shortly after its headquarters at the World Trade Center was destroyed in the September 11 attacks. The Gateway complex also features a 253-key Hilton Hotel and a retail component.