By Joshua Burd
Onyx Equities has completed a deal to bring NJ Transit to Newark’s Gateway complex, where the agency has committed to more than 400,000 square feet under a high-profile office lease.
The transaction, which was listed in multiple market reports, has been in the works for months and was easily the largest lease of the second quarter in the state’s uneven office market. NJ Transit is taking some 407,000 square feet at Gateway Two — one of three buildings in the complex that Onyx and its partners acquired in 2019 — as the agency plans to relocate from its longtime headquarters in the city at 1 and 2 Penn Plaza.
Representatives of Onyx and NJ Transit could not immediately be reached Monday.
Notably, the deal drove a spike in leasing activity in Q2, according to CBRE. It accounted for nearly half of all volume in northern New Jersey during that time and caused Newark to lead all submarkets with a total that was 526 percent above its five-year quarterly average.
Overall, northern and central New Jersey registered 1.5 million square feet of leasing activity in Q2, 16 percent above the five-year quarterly average and up 43 percent quarter over quarter, CBRE found. The total also marked the best quarterly leasing tally since the second quarter of 2022, with large deals of 50,000 square feet or greater accounting for 58 percent of all activity.
NJ Transit will occupy more than half of Gateway Two, at 283-299 Market St., under a plan that has drawn media scrutiny in recent months. Critics have contended the cash-strapped agency should stay in its current buildings, which it owns after acquiring them last year from Hartz Mountain Industries, but the operator said it could cost some $100 million to overhaul heat, air conditioning and ventilation systems, according to published reports.
Its new lease at Gateway follows Onyx and its partners’ purchase of Gateway One, Two and Four and a commitment to spend $50 million to renovate the iconic property. The investment group is in the midst of a massive overhaul of the complex’s signature concourse, creating a reimagined, 100,000-square-foot dining and retail hub that is now coming online.
Onyx also accounted for the second-quarter’s largest office lease in central New Jersey, having secured a 290,000-square-foot deal with Kenvue, Johnson & Johnson’s consumer health spinoff. Still, the northern and central New Jersey office market recorded negative net absorption, or a decline in overall occupied space, of 391,000 square feet during Q2, according to CBRE, as direct and sublease space mounted across the region.
The firm found that availability rose to 24.8 percent at midyear, while average asking rent ticked upward to $31.58 per square foot.
