10 Sylvan Way in Parsippany — Courtesy: Griffin Capital Corp.
By Joshua Burd
A group led by Normandy Real Estate Partners has sold a Parsippany office building for $44 million, following a gut rehabilitation project that attracted a blue-chip pharmaceutical tenant.
The buyer, Griffin Capital Essential Asset REIT II, announced Thursday that it had acquired the three-story, 125,735-square-foot complex at 10 Sylvan Way. The single-tenant building is the global headquarters of Zoetis, an animal health company that spun off from Pfizer in 2013.
In a news release, the fund’s sponsor noted that 10 Sylvan was originally built in 1984. But Normandy, a Morristown-based firm, stripped the building to its steel frame and rebuilt it as a state-of-the-art, trophy property after signing a lease with Zoetis in July 2015.
Normandy sold the property in conjunction with Partners Group, the news release said. They were represented the Jose Cruz and Kevin O’Hearn of HFF.
“Griffin further expanded into Northern New Jersey and more specifically into Parsippany, where they already have a large presence,” Cruz said in a prepared statement. ” They continue to see value in this submarket.”
The deal was announced by Griffin Capital Corp., a privately held firm based in Los Angeles. The firm is the sponsor of the entity that acquired the site, a publicly registered, nontraded real estate investment trust.
“We are pleased to further expand our footprint in the growing New Jersey market and acquire this Class ‘A’ property located in the premier Mack-Cali Business Campus,” Louis Sohn, Griffin Capital’s director of acquisitions said in a prepared statement. “The addition of this property to our growing portfolio of high quality assets further positions the REIT to create shareholder value over the long term.”
Normandy completed its repositioning of the project this past fall, allowing Zoetis to relocate there from Florham Park. The pharma company’s new home is located near Interstate 80 and Interstate 287, part of a submarket that includes the likes of The Medicines Co. and Avis.
It’s also the latest acquisition in the neighborhood for Griffin Capital, which owns Wyndham Worldwide’s headquarters campus at 14 and 22 Sylvan Way. The company acquired the properties in separate transactions in 2014 and 2015, paying a combined $178 million.
On Thursday, executives with the firm touted the acquisition of its latest global headquarters building in the submarket.
“With the business essential nature of the operations on-site, investment grade tenancy, annual rental rate escalations, institutional quality asset, and long-term lease duration, this transaction captures the majority of the salient acquisition criteria that we target for the REIT,” said Michael Escalante, Griffin Capital’s chief investment officer and president of the REIT. “This acquisition also marks a significant milestone for Griffin Capital Essential Asset REIT II, Inc., elevating the REIT’s total capitalization above $1 billion.”
