By Joshua Burd
A beleaguered private equity firm has sold 30 acres in the heart of Newark’s port district, where its plans once called for some 250,000 square feet of cold storage space.
GPB Capital Holdings LLC, which faces federal fraud charges, announced this week that its GPB Cold Storage LP fund had completed its disposition of the parcel, which it assembled over several years starting in 2016. It did not list the address, but public records show that the site includes a series of properties stretching from 105 to 161 Hyatt Lane, directly west of the New Jersey Turnpike and less than three miles from Port Newark-Elizabeth.
The New York-based investment manager did not disclose the buyer or sale price, although The Wall Street Journal reported that the company most recently valued the land at about $78.3 million, citing a person familiar with the matter. The fund had planned to build a 250,000-square-foot temperature-controlled warehouse on the site, the story noted, but scrapped the project amid concerns including the high cost of remediation.
This week’s announcement comes amid a civil fraud case by the U.S. Securities and Exchange Commission, which filed charges against the firm early last year. Meantime, the company and three former top executives or individuals connected to GPB face criminal fraud charges as part of a state investigation, to which they’ve pleaded not guilty, in connection with an alleged Ponzi-like scheme that involved using money from new investors to pay dividends to existing ones.
The case involves some $1.8 billion in funds from thousands of investors. GPB has been operating under a court-appointed monitor over the past year and, as the Journal noted, has moved to sell assets under the cold storage fund and its other investment vehicles.
“The investment thesis to acquire and expand this piece of underdeveloped land will return significant value to our investors,” Rob Chmiel, CEO of GPB Capital, said this week as the firm announced the sale of the Newark parcel. “We are focused on working with our independent monitor on a plan to distribute available proceeds from this transaction to the partnership’s investors.”
Highline Management Inc., which manages the day-to-day operations of GPB Capital’s sponsored partnerships, negotiated the sale, according to a news release. Inglesino, Webster, Wyciskala & Taylor LLC served as GPB Capital’s legal adviser, while The Blau & Berg Co. served as broker in connection with the transaction.
GPB noted on Monday that its cold storage fund acquired 22 acres at the site in 2016. Four years later, it purchased an adjacent eight-acre property to create what it said was one of the largest contiguous pieces of underdeveloped land in Newark.