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MADISON, NJ-Atlantic Mutual Insurance sold its 141,000-sf building at 3 Giralda Farms here to Reckson Associates Realty Corp. The Melville, NY-based buyer, which has its New Jersey offices in Short Hills, is paying $22.7 million for the four-story asset, a number that factors out to $161 per sf.

And the deal is turning into a value-added buy for Reckson. The New York City-based Atlantic Mutual, which has been cutting back in the wake of market difficulties, has been using the entire building as its national administrative center and as a regional marketing center, but that will change within the next five months.

In early January, according to Atlantic Mutual officials, the company will pare its presence in the building to just one floor, or approximately 32,500 sf. That move will effectively turn the deal into a sale/partial leaseback, and provide Reckson with the task of filling the other three-quarters of its new asset.

That may not be so difficult, even in the current market. Various market reports put the class A vacancy rate anywhere from 12% to 20%, which is relatively tight by overall standards in Northern and Central New Jersey. And, in any case, class A properties in the immediate Madison/Chatham/Short Hills region–a prime market–are commanding a hefty $35 per sf asking rate.

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