Downtown Building Sells for $27M

The buyer is Washington Park Fidelco LLC, an affiliate of the Fidelco Group, a Millburn, NJ-based firm. The seller was Siete Urban Associates, a locally based group and one of the original owners. The troubled property had been in default with lender Midland Loan Services, and the bulk of the proceeds will be used to pay off the debt on the property.

The deal was co-brokered by Christian Benedetto of locally based National Redevelopment Partners and David Bernhaut of Cushman & Wakefield of NJ, East Rutherford. Other bidders for the property, according to sources, included the Gale Co. of Florham Park, NJ and Heritage Management of Ridgewood, NJ. The building had been on the market for just over a year.

Despite the low per-sf number considering the building's age and location, Benedetto says the transaction reflects "a fair price. Occupied, the building is worth $50-60 million, or $125 to $135 per sf. Considering that it's completely vacant, the price was fair."

One Washington Park, situated at the intersection of Washington and Broad streets, is vacant because Verizon moved out a year and a half ago. Verizon, which had fully occupied the building since it opened, relocated its regional headquarters to a smaller renovated building just across the street.

Fidelco plans to spend an estimated $20 million to upgrade One Washington Park for multi-tenant use. On tap, according to managing partner Marc Berson, are upgraded public areas and building systems, as well as a new conference center and a fitness center. The new owner is also expected to name a leasing/marketing agent for the property shortly.

As part of the deal, Fidelco has obtained a $42.1 million bridge loan to cover acquisition and renovation costs. The funding was arranged for the buyer by Jon Mikula, senior managing director in Holliday Fenoglio Fowler's Florham Park, NJ office, and Martin Klebanoff, SVP of Northmarq Capital, Parsippany, NJ. iStar Financial provided the five-year, adjustable rate package. "With the new ownership in place, we expect there to be significant tenant interest in the property following the renovation," Mikula says.

One Washington Park sits on 2.2 acres in a portion of Downtown Newark targeted for redevelopment. "It will anchor a critical location in the revitalization of the city," says Berson, who has been a major player locally. He's the co-owner of the Newark Bears minor league baseball franchise, which plays in a nearby stadium. He's also on the board of trustees of the New Jersey Performing Arts Center, and was a force behind its development.