"The sale illustrates the power of private investors in the New Jersey office market today," says Jose Cruz, a senior director with Cushman & Wakefield's Metropolitan Area Capital Markets Group, East Rutherford. Cruz orchestrated the sale along with C&W executive director James L. Frank.
According to Cruz, the sale went through a three-round bidding process involving 15 initial bidders before ABC Properties/Belvidere Capital opted to sell to Direct Invest. "The offering of 150 Morristown Rd. was met with heated competition from potential buyers."
"Most of the top bidders were private players," Frank says. "This can be attributed in part to the building's size, which is smaller than many institutions will consider. At the same time, the aggressive nature of the bid process dictates that private players are among today's most notable investment groups. We've seen increased competition from this group in light of the debt market's current abundance of available capital."
The building is currently 90% leased to a mix of tenants, including Gravity Systems, a regional office of Pulte Homes, Sterling Care Group and several professional offices. "This is a great in-town location and an outstanding repositioning opportunity for Direct Invest," Cruz says. "Zoning in Bedminster will not allow additional office inventory, which ensures this property's future competitive position. Right now, rents are in the mid- to upper-$20s range, but the buyer is planning a repositioning that will bring it to class A status. I feel that this will justify increasing rents to the $30-per-sf range in the very near future."
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