7 Sylvan Way in Parsippany — Courtesy: Onyx Equities
By Joshua Burd
A joint venture led by Onyx Equities has closed on its $158 million purchase of a 10-building, 1.5 million-square-foot office portfolio in Parsippany and Madison from Mack-Cali Realty Corp.
Onyx and its partners — Taconic Capital Advisors LP, Axonic Capital LLC and Machine Investment Group — announced the deal Wednesday while pledging to revitalize the properties through a series of improvements. John Saraceno Jr., an Onyx managing principal, estimated the upgrades could total $25 million to $30 million in value as it follows its blueprint for repositioning office buildings, including a portfolio in Bergen County that it acquired from Mack-Cali starting in 2017.
The JLL team of Jose Cruz and Michael Oliver brokered the Morris County portfolio sale, which includes:
- 1, 3, 5 and 7 Sylvan Way in Parsippany
- 4, 6 and 8 Campus Drive in Parsippany
- 2 Dryden Way in Parsippany
- 2 Hilton Court in Parsippany
- 1 Giralda Farms in Madison
The transaction comes as part of a previously announced move by Mack-Cali, the Jersey City-based real estate investment trust, to sell its remaining suburban office buildings. The company announced late last year that it would sell more than 2 million square feet in Parsippany and Madison to an Onyx-led investment group, in a deal that is now closing in two phases.
“Historically, Onyx has completed some of our most complicated transactions in difficult economic climates and closing during COVID-19 certainly provided some unique challenges,” Saraceno said. “Special thanks to the effort of the Onyx and Mack-Cali teams for never giving up and finding a path to get this transaction closed.”
In a news release, the investment group said the new and improved portfolio will be primed to capture tenants already in the suburbs as well as firms that are relocating or expanding from New York City due to COVID-19 concerns. Saraceno said the 10 buildings collectively are roughly 84 percent leased, providing an opportunity for occupancy and rent growth that comes with “dealing with some deferred maintenance, elevating the physical condition of the assets, putting Onyx’s stamp on how we deal with things and how we manage our tenant base and elevating that level of service that we do everywhere.”
The blueprint has worked in Bergen County, where Onyx and its partners have amassed roughly 1.4 million square feet of former Mack-Cali office buildings, starting with a four-building, 850,000-square-foot acquisition in 2017. Occupancy in the firm’s Bergen County portfolio is now around 92 percent, Saraceno said, up from the low 70s when it began the acquisitions.
“Onyx is excited to close its second large portfolio with Mack-Cali and we look forward to implementing our typical value-add capital improvement business plan in order to upgrade assets that we already feel are some of the best in Morris County,” said Stephen Sullivan, chief investment officer at Onyx. “Our goal is to continue to attract tenants already in the suburbs and also potential relocations out of New York City who desire both a superior product and the best locations.”