5 Wood Hollow Road in Parsippany — File photo / Courtesy: Cushman & Wakefield

By Joshua Burd

Deugen Development has landed nearly $31 million in financing to acquire and raze an aging office building in Parsippany that it plans to redevelop as a 340,000-square-foot warehouse.

Axonic Capital LLC, the alternative investment management firm, provided the senior loan in connection with the project at 5 Wood Hollow Road. That allows Deugen to purchase, carry and knock down the existing 330,000-square-foot building as part of its predevelopment costs, the lender said, noting that the site will be vacant by year end.

Demolition is slated to begin in late spring 2027.

“We continue to see opportunities to finance strong, local developers in high-quality asset repositionings,” said Erik Nygaard, principal and portfolio manager at Axonic.

The lender said the $30.8 million deal, sourced directly from the borrower, also provides exposure to a gateway market with strong demand for high-end industrial space. The New York-based firm completed the transaction in close coordination with Deugen’s Kyle Mathis and Eric Gormeley.

“The acquisition of 5 Wood Hollow aligns perfectly with our investment thesis of targeting premier industrial development projects in markets with strong demand and high barriers to entry,” said Mathis, the firm’s chief investment officer. “The I-287 corridor’s direct access to major transportation infrastructure and deep concentration of sophisticated industrial users make Parsippany one of the most compelling locations in the Northeast for this asset class.”