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GLEN ROCK, NJ-An affiliate of Mountain Development Corp. recently closed on the purchase of 208 Harristown Rd. here. The four-story, 103,000-square-foot landmark class A office building in Bergen County fronts on Route 208 and is net leased to Bank of America Corp. Dan De Palma of Jones Lang LaSalle represented the unnamed seller.

“The building is on a major highway, in a terrific town and is leased to an extremely desirable tenant,” says MDC director of acquisitions Bill Martini, who could not provide the purchase price. “It is a logical addition to our New Jersey portfolio,” he adds. First mortgage financing was provided by M&T Bank.

According to Marcus & Millichap Real Estate Investment Services, office deals continue to be recorded throughout New Jersey. While sales velocity has declined steeply in the northern part of the state, the region still accounts for more than 60% of all deals closed in the last 12 months due to its high concentrations of businesses, residents and office properties. Sales prices in the north are falling in step with revenues, but an increased number of distressed property sales is skewing price trends.

More specifically, Northern New Jersey sales velocity has eased 32% during the past year, after falling 6% in the preceding 12 months, notes Marcus & Millichap. The median price has decreased 5% to $162 per square foot, compared to a 3% increase in the prior year.

According to Michael Fasano, vice president of Marcus & Millichap and regional manager of the Elmwood Park office, “The evolving lending and investment markets are causing prospective buyers to re-evaluate risk assessments. As a result, investors are increasingly considering cash-on-cash returns, DSCs, lease lengths and tenant mix when approaching prospective deals.”

Also of note, adds William Hughes, senior vice president, Marcus & Millichap Capital Corp., “Local and regional banks are the primary sources of financing today, though life insurance companies are expected to start re-emerging early next year. Overall, lenders are focusing on smaller deals, with transactions over $15 million difficult to finance.”

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