340 Mount Kemble Ave. in Morris Township — Courtesy: Cushman & Wakefield
By Joshua Burd
Onyx Equities and PCCP have sold a 439,000-square-foot office building outside Morristown — reportedly for $118.5 million — following nearly a decade of ownership and an ambitious plan to rejuvenate the property.
According to Cushman & Wakefield, which arranged the sale, First Mile Capital paid an undisclosed price for the complex at 340 Mount Kemble Ave. in Morris Township. The building traded with an occupancy rate of 94.5 percent, the brokers said, thanks in large part to a $50 million renovation that transformed the once-vacant, former AT&T regional headquarters into a multitenant asset with a new glass façade, upgraded HVAC systems and a complete makeover of the full-height atrium lobby, common areas and restrooms.
Cushman’s David Bernhaut, Gary Gabriel, Andy Merin, Frank DiTommaso and Bill Baunach represented Onyx and PCCP, which acquired the 439,059-square-foot building in 2016. Brad Domenico of C&W’s equity, debt and structured finance group sourced acquisition financing on behalf of the buyer, an affiliate of Crown Acquisitions.
The firms did not disclose the sale price, but a report by CoStar News listed it as $118.5 million.
“340 Mount Kemble represents a monumental sale in today’s office environment and will likely remain as one of the largest suburban office transactions in the U.S. in recent times,” Bernhaut said. “Onyx and PCCP did an exceptional job repositioning this former corporate facility, essentially rebuilding it from the inside out.”
Societe Generale provided the acquisition loan.
“Choosing the best lending partner who could execute on an office asset was key to this transaction and Societe Generale proved to be the correct choice,” Domenico said.
Located two miles from the Morristown Green, 340 Mount Kemble has a full-service cafeteria, a modern coffee lounge and bar, a fitness center and a conference facility, among other amenities. Tenants have easy access to major roadways such as Route 202 and Interstate 287 and are minutes from the Morristown train station, while the building benefits from the area’s affluent population, high-quality amenities and a strong corporate presence.
That has helped Onyx attract companies such as Morgan Stanley, Zelis Inc., Marcum LLP and Sompo International, among others.
“The caliber of tenancy that 340 Mount Kemble has attracted is a testament to sponsorship,” DiTommaso said. “First Mile Capital will benefit from long-term, investment-grade cash flow while planting a flag in one of the region’s top-performing submarkets.”