Page 20 - RENJ May 2021 Issue 53

18 MAY 2021
Mark Meisner, CEO and founder of The Birch Group, said his firm has “always
been intrigued by the tremendous corporate base in northern New Jersey.” That prompted its first acquisition in the market, in 2018, when it purchased a two-building office campus in Morris County.
The company has since added more than $750 million worth of office property in the state — and Meisner seems no less bullish today, even with the uncertainty caused by the pandemic.
“Since demographics drive the real estate market, we feel that the significant shift to the suburbs will
enhance leasing momentum,” he said. He expects the trend to accelerate after the pandemic ends because “there will be less emphasis on mass transit-oriented locations.”
The Birch Group is steadfast in that belief. In mid-
April, it paid $255 million
to acquire a four-building, 843,300-square- foot portfolio in the Short Hills section
of Millburn from Mack-Cali Realty Corp. It’s now
planning a series of upgrades to the
well-known properties at 51, 101, 103 and 150 John F. Kennedy Parkway, as it banks on one of New Jersey’s acclaimed suburban submarkets.
“Those assets have always attracted the highest-end corporations
and wealth management firms,” said Meisner, whose firm has tapped Gensler to lead the design enhancements.
“We feel that making these improvements now will put us in a strong leasing position as the market picks up post-pandemic.”
The deal is among nearly a dozen acquisitions in the state by the privately held, Nanuet, New York-
based firm since spring 2018, as it has built a footprint in and around Morris County. Its first deal in spring 2018 was the purchase of 350 and 360 Mount Kemble Ave. in Morris Township, which have a combined 230,000 square feet and were 80 percent leased at acquisition.
The Birch Group increased occupancy to 99 percent and is now trying to repeat that success with its latest additions near Morristown, Meisner said, having bought 60 Columbia Drive, 100 Southgate Parkway and 1200 Mount Kemble Ave. for $77 million.
He said that rents in downtown Morristown, especially for new construction, are now $50 per
square foot and tenants need to pay for parking. The portfolio offers immediate access to the downtown, “yet we can offer tenants a significant rent savings at a very desirable setting while still avoiding congestion during rush hour.”
Both the Short Hills and Morristown portfolios were attractive because they’re located near highways and leased between 70 and 85 percent, “which provides us with a reliable income stream and the ability
to improve occupancy” through strategic investments and an aggressive leasing strategy, he said. He also noted that the Short Hills assets are within walking distance to the Mall at Short Hills and the Hilton Short Hills and offer 100 percent structured parking, which is unique in a suburban marketplace, he said.
In both the Morristown and
Short Hills submarkets, the Birch Group is pursuing new tenants including financial services, law firms, accounting firms and major corporations.
Its strategy will largely hinge on the idea that office users will in fact return to the workplace, following a year in which their employees
DOUBLING DOWN
Investor continues push into New Jersey suburbs, betting on return to high-end office buildings
By Marlaina Cockcroft
Mark Meisner
The Birch Group recently acquired 51 John F. Kennedy Parkway in Short Hills from Mack-Cali Realty Corp. as part of a four-building, 843,300-square- foot deal valued at $255 million.
Courtesy: The Birch Group