1, 2 and 4 Center in Newark — Courtesy: Onyx Equities LLC
By Joshua Burd
A joint venture has acquired 1, 2 and 4 Gateway Center in Newark, bringing 1.6 million square feet of office space under a common ownership and paving the way for a sweeping, multimillion-dollar plan to modernize the complex’s concourse and streetscape.
The buyers, which announced the deal on Thursday, include Garrison Investment Group, Axonic Capital LLC, Taconic Capital Advisors and Onyx Equities LLC, with Prudential Financial participating as a co-investment partner. Onyx will serve as the operating arm, while overseeing what could be between $30 million and $50 million of construction in the coming years.
Terms of the deal, which closed in late December, were not disclosed. But the new ownership touted the transaction as New Jersey’s largest office sale of 2018, one that has aggregated the first majority interest in Gateway Center’s recent history.
“We are honored and thrilled to be part of Newark’s renaissance in such a significant way. Gateway Center is now positioned to become Newark’s greatest amenity, and arguably New Jersey’s most important center of commerce, talent and connectivity,” said John Saraceno, managing principal and co-founder of Onyx Equities.
The JLL capital markets group led by managing directors Thomas Walsh and Joseph Garibaldi brokered the transaction.
The deal comes after an announcement last May that Onyx would take over management, leasing and construction oversight of One Gateway on behalf of Axonic Capital and Taconic Capital. At the time, the role called for Onyx to spearhead the repositioning of the 523,000-square-foot property along McCarter Highway.
With a larger plan now in place and Onyx in place as an owner, the joint venture plans to carry out a multimillion-dollar modernization centered on creating a more vibrant retail concourse. Some 60,000 people traverse the 1,400-linear-foot network of walkways each week, including PATH, NJ Transit and Amtrak commuters, Gateway employees and others, providing a chance for the new ownership to create a destination at the complex.
Saraceno said plans also call for transforming at least part of the ground-floor real estate around the three buildings in order to create vibrant new restaurant and retail space.
Onyx, which is based in Woodbridge, will oversee asset and property management, tenant relations, leasing and construction.
“We echo Onyx’s excitement regarding the Gateway Center acquisition,” said Eric Rosenthal, managing director of Garrison Investment Group. “We look forward to contributing to Newark’s positive momentum while repositioning the iconic campus.”
Adam Karafiol and Matthew P. Flath of Onyx will lead office and retail leasing efforts. The JLL team of Tim Greiner, Blake Goodman and Colleen Maguire will serve as the agent for Gateway 1 and 2, while the RKF team of Glenn Beyer, Jerry Rockoff and Rob Mackowski will serve as the retail agent.
“We are excited to be part of this incredible team whose focus is to create a unique and inviting experience for tenants and visitors at the Gateway Center and bring the Gateway Center back to prominence in Newark,” said Goodman, an executive vice president at JLL.
The joint venture has selected Gensler, led by Dana Nalbantian, as project architect. Rebranding and marketing assistance will be provided by Real Estate Arts, led by Michael Goodgold.
As part of the appeal, the joint venture and others involved in the deal cited increased residential investment in Newark and Harrison, coupled with an uptick in corporate relocations to Newark.
“Well-capitalized and united ownership will provide the key ingredients in the Gateway Complex reclaiming its reputation as one of the best transit-oriented office portfolios in the Northeast,” Walsh said.