McMorgan Pension Fund Buys 190,000-SF Office

The seller was the Offices at Bedminster LLC, a local group. Until last year, the complex was in the hands of the Gale Co., now known as Gale Real Estate Services, but was shed as part of that company's acquisition by Mack-Cali Realty Corp. The parties involved in the latest sale declined to divulge the sale price, but industry sources estimate that the complex likely traded for roughly $40 million.

"The offering drew significant interest from the investment community," says Andrew Merin, who heads Cushman & Wakefield's Metropolitan area capital market group. Merin orchestrated the deal with C&W colleagues David Bernhaut, Gary Gabriel and Jose Cruz. The East Rutherford-based brokers represented the seller and procured the buyer in the competitive offering.

Built in 1989, the complex consists of two separate, identically designed buildings on 14 acres fronting Route 206. It sits directly across from the Village at Bedminster, a 111,000-sf shopping center under separate ownership, and at the entrance to the Hills, a 5,200-residence master-planned community. Corporate neighbors include AT&T, Sanofi-aventis, Pfizer, Dendrite and Verizon Wireless.

The Offices at Bedminster was 86% leased to nine tenants at the time of sale. Nearly 70% of its total rentable area is currently occupied by such blue-chip companies as Abbott Laboratories, AGL Resources, Celanese, EDS and Sprint.

"It has out-performed its competition by maintaining a 90% average occupancy rate over the past four years," Merin says. "The current dip below that rate presents McMorgan with an opportunity to drive value by leasing the balance of the space."