435 South St. in Morristown — Courtesy: HFF
By Joshua Burd
A three-building, 538,000-square-foot medical office complex in Morristown has changed hands, in what HFF says is the state’s largest medical office sale this year.
The brokerage firm on Wednesday said it represented National Business Parks Inc. in the sale of the buildings — located at 435, 465 and 475 South St. — to Harrison Street Real Estate Capital LLC. The complex is 93 percent leased to Atlantic Health System, one of the state’s dominant health care systems, and is a mile south of the network’s flagship Morristown Medical Center.
Terms were not disclosed, but the complex reportedly traded for nearly $140 million.
The HFF team representing the seller included Senior Director Ben Appel, Senior Managing Director Jose Cruz, Managing Director Evan Kovac and associates Matthew DiCesare and J.B. Bruno. They also procured the buyer.
“Atlantic Health System provides care to more than 1,100 patients daily at this complex,” Appel said. “The additional land at the complex, although not yet spoken for, is earmarked for an 80,000-square-foot expansion. The hospital has expanded multiple times on this campus in recent years.”
National Business Parks is an owner, manager and developer of medical office, office and laboratory space in New Jersey, HFF said. Meantime, Harrison Street Real Estate Capital LLC is a real estate investment manager focused on the education, health care and storage sectors.
HFF said the Morristown complex houses some of Atlantic’s critical offices and unique services.
“Demand from the investment community for well located, good credit, medical office buildings is very strong in northern and central New Jersey,” Cruz said. “These assets are highly sought after especially given lack of opportunities to acquire these types of deals in the market.”
