One Newark Center in Newark — Courtesy: JLL
By Joshua Burd
A joint venture has sold the 423,000-square-foot One Newark Center tower, the latest office building to change hands in downtown Newark amid heightened investor interest.
Brokers with JLL said Tuesday that an affiliate of The Praedium Group LLC and Mack-Cali Realty Corp. sold the property to Beijing Ideal Group, a Chinese investment and development firm. The sale includes the sixth through 22nd floors of the building, which is located on Raymond Boulevard between McCarter Highway and Mulberry Street.
Terms were not disclosed.
Representing all three firms, the JLL capital markets team involved in the deal included Joseph Garibaldi and Thomas Walsh, managing directors; Stephen Feinberg, vice president; and Katelyn Borovsky and Heather Lombardi, associates. The brokers worked closely with Brian Lindenberg, vice president of asset management at Praedium.
“Spurred by Newark’s progressively transforming landscape, One Newark Center was one of New Jersey’s most sought-after investments in 2017,” Walsh said. “Prospective buyer profiles ran the gamut, and included institutional investors, regional operators and even foreign funds.”
The floors acquired by Beijing Ideal Group total 423,028 square feet, JLL said, while the offering also includes a 10-story, 945-space parking structure that is physically connected to the office tower. The first five floors are owned and occupied by Seton Hall Law School.
Among other benefits, the brokerage team touted the building’s location just one block from Newark Penn Station.
“The purchase of One Newark Center demonstrates Beijing Ideal Group’s confidence in the future of Newark and the surrounding region,” Garibaldi said. “The Chinese investment and development company saw great potential in the office tower.
“The building is well positioned to take advantage of Newark’s tremendous momentum as the city is attracting major corporations such as Broadridge Financial and Mars.”
The deal come a year after KFH Capital Investment Co., a Kuwait-based investment fund, paid $165 million to acquire the 337,500-square-foot Panasonic of North America building from SJP Properties and Matrix Development Group. Two months earlier, Columbia Property Trust sold the 26-story Public Service Enterprise Group tower for nearly $175 million.
Like those buildings, One Newark Center boasts proximity to the train station and access to NJ Transit, PATH and Amtrak service to New York and points along the Northeast Corridor, as well as access to the Newark light rail system.
“The fact that another international buyer has invested in a Newark office building speaks volumes about the evolution of the market,” Lindenberg said. “The perception of the city continues to improve in the eyes of international investors, attracted by Newark’s connectivity to New York and the rest of the tristate region.”
JLL also noted that some 7,500 residential units have either been built or are under construction within 1,500 yards of One Newark Center, which is creating a vibrant street life. The firm also pointed to several commercial developments such as the new Prudential Financial tower on Broad Street and the development of green spaces such as the revitalization of Military Park and the recently announced, 22-acre Mulberry Commons project.
Amenities at One Newark Center include a full-service café, featuring an outdoor patio. The building was constructed in 1992, JLL said, adding that it offers easily divisible floor plates ranging from 22,000 square feet to 26,000 square feet, some with outdoor balconies.
Cushman & Wakefield arranged $66.58 million of financing for the acquisition on behalf of Beijing Ideal Property Development. Morgan Stanley Bank N.A. provided the 10-year, fixed rate transaction, which included loan proceeds, an interest only period and carve-outs limited to the borrowing entity.
The Cushman & Wakefield Equity, Debt and Structured Finance team of John Alascio, Sridhar Vankayala and Noble Carpenter represented the sponsor in the transaction.