Two Office Deals Add Up to $47M

The newly acquired property is 25 A&B Vreeland Rd. in Florham Park, a two-building, 225,500-sf class A complex on 14 acres bought by Bergman for affiliate Vreeland SPVEF Venture LLC. The sale price of just less than $33.7 million factors out to $149 per sf. The seller was TR Koll Florham Park Corp., an entity controlled by KBS Realty Advisors.

"This transaction was done in an exceptionally short time frame, 30 days from start to finish," says Jeffrey Dunne, who teamed with colleagues Kevin Welsh and Jeffrey Oram of CB Richard Ellis' New York Tri-State Region Institutional Group to rep the seller. "Bergman was totally focused on closing this deal. The investment provides Bergman with the opportunity to create value through leasing current vacant space and extending the leases of existing tenants with near-term expirations."

The two three-story buildings were 82% leased at the time of sale to a roster of 19 companies. Major tenants on-site are the Hobart West Group, Novartis, Managed Healthcare Associates, Willis of New Jersey and Veritext.

"The key for us was having a strong financial partner, Strategic Capital Partners, to close all-cash and place the debt subsequently," says Bergman president Michael Bergman, who notes that his firm's Laurie Smith and Michael DiFede were the in-house dealmakers. "They pulled together all the deal terms and the rest of our team completed due diligence in record time."

While buying 25A&B Vreeland, Bergman, along with partner Bank of America, has simultaneously shed 55 Lane Rd. in Fairfield, a 108,500-sf class A office building. The sale price of $13.3 million factors out to about $123 per sf. The buyer was RiverOak Investment Corp., a Stamford, CT-based private real estate investment fund sponsor, which teamed with Cofinance Inc. to buy the asset on behalf of RiverOak Fund IV, a $25-million value-added fund just formed in June. Brokers from CBRE arranged this transaction as well.

For RiverOak Fund IV, the pick-up or 55 Lane Rd. was its first. "The property was acquired at a significant discount to replacement cost," says a RiverOak spokesman. "The excellent condition of this building insures that the vast majority of the planned $2.2 million in additional investment can be dedicated to an aggressive leasing campaign."

Built circa 1990, 55 Lane Rd. is currently 73% leased, with Aetna Life Insurance as the prime tenant. "Average in-place rents are $3 to $4 below the comparable market," the spokesman says. "That presents considerable upside to investment."