25 Deforest Ave. in Summit
By Joshua Burd
A well-known joint venture has sold three high-end office buildings in Summit for a combined $109 million, reaping the benefits of a plan to invest in the city that goes back to 2011.
The team of Normandy Real Estate Partners and MRY Associates LLC recently sold the buildings at 466 Springfield Ave. and 25 Deforest Ave., while it is under contract to sell One Deforest Ave. The properties total about 214,000 square feet, representing a large portion of the Class A office market in the city’s central business district.
Normandy and MRY have amassed the portfolio through a series of acquisitions, followed by redevelopment projects or major renovations at the properties.
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A source with knowledge of the deals identified Rockwood Capital as the buyer for 25 Deforest and One Deforest, which are about 128,000 square feet and 55,000 square feet, respectively. The deals commanded prices of $59.7 million and $30.3 million.
The joint venture made its first investment in the city in 2011 when it acquired the former Summit Medical Group building at One Deforest Ave. Normandy and MRY set out to reposition the property and leased it prior to the completion of those upgrades, with McKinsey & Co. serving as the anchor.
They acquired 466 Springfield about two years later and went on to renovate the 31,000-square-foot property, which is now just about fully leased to Boston Consulting Group. The firms recently sold the property for $19 million.
At 25 Deforest, which Normandy and MRY acquired in 2015, they renovated the three-story property for several million dollars and ultimately attracted tenants such as JP Morgan Chase.
The joint venture has found success in Summit by tapping into the demand for high-end office space in and around the city’s vibrant downtown, commanding rents near $50 per square foot. The affluent municipality, which is served by NJ Transit’s Morris & Essex line, offers rail service to Hoboken and Manhattan.
Cushman & Wakefield represented Normandy and MRY in the sale of the buildings. The brokerage team comprised Chairman Douglas Harmon, Chairman Adam Spies and Executive Managing Director Kevin Donner, who worked in conjunction with the firm’s New Jersey-based capital markets team, including Executive Managing Director Gary Gabriel and Vice Chairman David Bernhaut.
“The owner of these buildings saw what investors were looking for and created a market that met their needs,” Donner said. “These transactions will not only have an uplifting impact on the surrounding Summit and Short Hills neighborhoods, but they also challenge suburban markets in other locations across the tristate to create similar Class A office markets in the near future to progress suburban office leasing capabilities.”
