PLAINSBORO, NJ—Korean investment firm Hana Asset Management Company is buying Novo Nordisk’s 762,000-square-foot North American headquarters in Plainsboro for $305 million, the largest single-asset sale in New Jersey to date in 2016.
Cushman & Wakefield brokered the sale and secured financing for the transaction.
Members of Cushman & Wakefield’s Metropolitan Area Capital Markets Group, including Andrew Merin, David Bernhaut, Gary Gabriel and Brian Whitmer, represented the seller, a partnership of Ivy Equities, LCOR, and Intercontinental Real Estate Corp. Ken Lorman with Lee & Associates – New Jersey, advised the purchaser, part of the Hana Financial Group, a bank holding company that owns about 30 properties worth $3 billion in markets across Asia, North America, and Europe, according to Real Capital Analytics, a proprietary research company.
On the finance side, the Cushman & Wakefield Equity, Debt & Structured Finance team of John Alascio, Alexander Hernandez and Alex Lapidus arranged acquisition financing and future funding tied to the planned expansion of the tenant.
The class A property, which sits in the heart of the Princeton market, includes nine interconnected buildings on 58 acres, with Novo Nordisk currently leasing 563,000 square feet on a net lease basis with expansion rights through April 2031, no termination rights and one 10-year renewal option.
“The superior investment-grade tenant and durable in-place cash flow with contractual rent steps at 800 Scudders Mill enabled us to source this noteworthy partnership as the purchasing entity,” Merin says. “The result – a major offshore investment in New Jersey – is a big win for the state. The transaction came with a number of challenges, including the complexity of multiple partners on both sides of the sale.”
Cushman & Wakefield’s ability to also arrange financing for the acquisition and future funding was key in moving the sale to its conclusion. “This was indeed a complex transaction involving a foreign entity trying to understand structural considerations for financing in the US,” Alascio says. “Future funding components are always complex in terms of logistics and obtaining lender approval. It can often be easier with single-tenant financing, which this is, but in this instance, given the nature of future funding and the earn-out of space to the tenant, it was particularly challenging. Overall, we delivered the best deal in the marketplace, working around the structural concerns of both the buyer and seller.”
Ivy Equities’ Anthony DiTommaso, co-chief executive officer, credits Cushman & Wakefield’s involvement for the successful outcome. “The capital markets and finance teams both exercised great tenacity and professionalism in finding and executing the best possible solution,” he says. “The property is well positioned to accommodate Novo Nordisk’s needs for years to come.”
Situated in the amenity-rich Princeton Forrestal Center Office and Research Park, 800 Scudders Mill Road was originally constructed for and occupied by Merrill Lynch in 1985 and subsequently occupied by BlackRock. Novo Nordisk entered into a lease agreement in 2011 to take occupancy upon completion of a full redevelopment of the property, which was completed in April 2013. Novo Nordisk had originally entered the Princeton office market in 1999 and has continued to expand ever since.