Page 9 - RENJ June 2021

REALESTATENJTM 7
MERCK LISTS 2 MILLION SQ. FT. OFFICE, R&D CAMPUS FOR SALE
A year after announcing plans to vacate its Kenilworth headquarters, Merck & Co. has officially placed the nearly 2 million-square-foot office and research campus on the market for sale.
The pharmaceutical giant has tapped JLL to seek a buyer for the site at 2000 Galloping Hill Road, with plans to lease back the property through at least 2023. In conjunction with the offering, the company joined borough officials in late April to express its commitment to exploring potential redevelopment and expansion plans by a new owner.
Merck is leaving the 108-acre campus as part of a plan to consolidate its New Jersey facilities and bring its employees under one roof at its iconic complex in Rahway.
“The borough looks forward to engaging with prospective buyers at the appropriate time to assess site redevelopment opportunities and
to identify ways in which the town can support creation of even greater long-term site value for the owner and the community,” Kenilworth Mayor Linda Karlovitch said recently, according to a statement posted
on TAPinto.net. “Such cooperative efforts will be undertaken with
a view towards continuation of
the (science-, technology- and manufacturing-based) professional employment opportunities that have been a part of the campus DNA throughout its history. However, we seek the highest and best use for
the property. This will provide our community with stability into the future.”
Located just off the Garden State Parkway in Union County, the campus includes office and life sciences facilities across five buildings, according to JLL. The largest among them is a roughly 1.14 million-square-foot structure with state-of-the-art labs, a renovated cafeteria, a fitness center, an auditorium, office space and structured parking.
JLL noted that Merck has invested heavily in improvements over
the past five years, including
the replacement of two power substations, upgrades to the chiller
Merck’s headquarters and research campus at 2000 Galloping Hill Road in Kenilworth spans more than 1.9 million square feet.
plant, renovation of office space and upgrades to the fitness center and health center.
The brokerage team also pointed
to 25 acres of vacant land on
the campus, which provides “an opportunity to expand the current use or to reposition for alternative uses.” What’s more, Merck will retain the option to the extend the lease for a 232,000-square-foot office building on the site for another one or two years beyond 2023, as it will for all or a portion of the flagship 1.14 million- square-foot complex.
Members of JLL’s life sciences and Morristown-based investment sales teams — including Dan Loughlin, Jose Cruz, Kevin O’Hearn, Michael Oliver, Steve Simonelli and Grace Braverman, along with Jon Mikula of the firm’s debt and equity group — are leading the assignment.
“The campus is a rare large-scale investment opportunity, combining significant in-place net lease income and development potential,” JLL wrote in its offering materials.
“The secured campus is located
just off of Exit 138 of the Garden State Parkway, minutes from
major distribution highways, an international airport and one of
the nation’s leading port terminals, providing ideal opportunity for pharmaceutical or life sciences manufacturing, production, research and office use.”
Merck, which has shifted its headquarters several times in recent decades, absorbed the Kenilworth property as part of its 2009 acquisition of Schering-Plough Corp. The company moved its front office there around six years ago
after vacating its iconic complex in Readington, which came as part of an effort to cut costs and reduce its real estate footprint.
It’s now set to return to Rahway, a site that previously housed its headquarters until 1992.
“Merck is committed to working with the Kenilworth community and its public officials in an effort to sell the
campus to an owner who will seek to redevelop and enhance the campus for future successful deployment,” said Shefali Shah, Merck’s global lead for real estate, according to TAPinto.net. The company has said it expects no changes to the day-to-day operations at the site or the timeline of the consolidation process as a result of the recent listing.
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Courtesy: JLL