Cherry Hill Commerce Center (left) at 1951 Old Cuthbert Road in Cherry Hill and Village of Pine Run at 1001 Lower Landing Road in Blackwood — Courtesy: DH Property Holdings LLC
(Editor’s note: This story was updated Thursday, July 18, with additional information from NAI Mertz.)
By Joshua Burd
DH Property Holdings LLC has acquired two South Jersey industrial parks for nearly $49 million, adding some 365,000 square feet of shallow-bay space to its portfolio in the region.
According to a news release, the off-market deal includes a six-building, 235,000-square-foot property in the Blackwood section of Gloucester Township. Known as Village of Pine Run, the park at 1001 Lower Landing Road is just off Route 42 and minutes from Interstate 295.
The second property, Cherry Hill Commerce Center, is a 130,000-square-foot industrial park with four buildings at 1951 Old Cuthbert Road in Cherry Hill and minutes from the New Jersey Turnpike, I-295 and other thoroughfares.
“The shallow-bay supply/demand fundamentals in southern New Jersey are stronger than ever,” says Dov Hertz, founder and principal of DH Property Holdings. “On the demand side, the tenancy is very sticky, with stellar renewal rates and continuously rising rents, in spite of negative tailwinds on some of the larger blocks of availability.
“On the supply side, the stock of 100,000-square-foot assets in southern New Jersey is extremely limited, and new developments in that size range are cost-prohibitive to build. It is virtually impossible to develop shallow-bay properties in the current interest rate environment and even more so, the cost to demise spaces into 4,000- to 20,000-square-foot units.”
The NAI Mertz team of John Adderly, Roy Karden, Scott Mertz and Fred Meyer represented both parties in the $48.55 million deal, with Mertz slated to lead the leasing program for DH Property Holdings. Walker & Dunlop’s Aaron Appel, Jonathan Schwartz and Michael Ianno arranged $40 million of financing for the transaction.
The property owner added that the portfolio, which is more than 90 percent leased to more than 40 tenants, has ceiling heights ranging from 18 to 20 feet, ample parking and a loading ratio of one position per 3,600 square feet. Users have an average tenure of more than 15 years and span industries such as clean energy, IT services, printing, welding, construction and many others.
The buildings, meantime, are 25 miles from Center City Philadelphia and 28 miles from Philadelphia International Airport, Packer Avenue Marine Terminal and a CSX rail yard.
In a separate news release, NAI Mertz said it secured the listing to lease the parks nearly 40 years ago and successfully represented the owner from that point forward. Meyer, the firm’s executive vice president for corporate services, was the initial leasing agent prior to transitioning the lead position to Kardon, who spearheaded all leasing activity in the portfolio for nearly three decades.
“This was a unique transaction that was in process for several years through rate hikes as well as the unfortunate passing of a key executive, neither of which were easy to navigate, but were ultimately overcome,” Adderly said.
Hertz, meantime, said DH Property Holdings is planning a multimillion-dollar upgrade of the portfolio “to further institutionalize the parks.”
“We look forward to working with Scott Mertz and his team at NAI Mertz on the lease-up, which includes many units that have not been available to the market for 10 to 20-plus years,” Hertz said.
