A rendering of the planned upgrades at 340 Mount Kemble Ave. in Morris Township — Courtesy: Onyx Equities
By Joshua Burd
As Tim Greiner will tell you, there are two things that can’t be changed when an owner is renovating or redeveloping an office building — ceiling height and column spacing.
That’s exactly where he sees an advantage at 340 Mount Kemble Ave., a 400,000-square-foot building just outside downtown Morristown that is in line for a major physical overhaul.
“It’s got tremendous infrastructure,” Greiner said, pointing to the building’s 30-foot-by-30-foot column spacing and nearly 14-foot ceiling heights. “If we were to slap a new façade on a building that has 12-foot clear height and 20-by-20 column spacing, I wouldn’t feel so confident, no matter where it was located, because it just feels like an old, antiquated building.”
Greiner, an executive managing director with Newmark Grubb Knight Frank, is part of the team that is marketing 340 Mount Kemble on behalf of Onyx Equities and PCCP LLC. The joint venture acquired the vacant former AT&T property last summer — reportedly for less than $8 million — and is now moving ahead with a series of major upgrades, including a new glass façade, a four-story atrium lobby, new amenity spaces and modern finishes.
When the project is complete, they expect to deliver a trophy-quality asset to a market that has shown an appetite for such properties. In the past two years, newly built or modernized office buildings in Morris County have attracted large, high-profile tenants such as Allergan, MetLife Investments and Zoetis, along with Daiichi Sankyo in nearby Somerset County.
Besides its column spacing and ceiling heights, Greiner said the floorplan at 340 Mount Kemble is another selling point. Brokers “hear from tenants all the time (that they) want to be on one floor,” he said, so the leasing team hopes to capture that demand by offering about 135,000 square feet of contiguous space on two of the building’s four floors.
That’s not to mention the location. The building is six minutes from downtown Morristown, where it would be difficult to get the land assemblage or the entitlements needed to build a 400,000-square-foot office building.
“It’s really hard to get the height that you would want or need to get the building that big, so it’s as close as you can get to a place like downtown Summit, downtown Morristown,” Greiner said, adding that the building will offer shuttle service to The Green and the Morristown train station. “We really want to feel like we’re connected to downtown Morristown.”
AT&T, which occupied the Morris Township building for more than three decades, vacated the space about four years ago. The most recent owner, LNR Partners LLC, had acquired it in a foreclosure sale about a year earlier before selling it to Onyx and PCCP.
Onyx is pursuing the project on a speculative basis and has already started interior demolition, Greiner said. He added that the joint venture “bought it at such a good basis that the handcuffs are off” when it comes to improving the property and offering attractive rents.
An Onyx executive said as much last month when the firm unveiled its plans.
“We’re excited by the new vision for 340 Mount Kemble and believe large corporate users will appreciate what will essentially be a new building in a major transit area with direct access to Manhattan and major roadways,” said D.J. Venn, Onyx’s senior vice president of asset management. “We acquired a headquarters asset at land cost, which enables us to offer prospective tenants the highest quality product and a Morristown address at very competitive rental rates.”
Onyx and NGKF are hoping to replicate the success it found at 211 Mount Airy Road in Basking Ridge, where it carried out a similar repositioning plan last year before attracting Daiichi Sankyo to a full-building, 305,000-square-foot lease. Greiner said that deal and several others in the area “point to a fairly robust demand for suburban space right now.”
A prospective tenant could start its improvements at 340 Mount Kemble by summer 2018 and take occupancy as early as the fourth quarter of that year, he said. With its bifurcated design, the building is easily divisible.
Any firm that does commit to the space will also have the benefit of four parking spaces per 1,000 square feet. Greiner also said that two electrical substations come together at the site, offering the type of redundancy that “a lot of buildings don’t have and can’t afford to install.”
“It’s been important since Hurricane Sandy,” Greiner said. “Part of every tenant requirement these days is ‘Where is my backup generator?’ so this is another level of security and redundancy on top of any backup generation that gets installed at the building.”
