211 Mount Airy Road in Basking Ridge — Courtesy: Rubenstein Partners LP
By Joshua Burd
A joint venture has sold a 306,000-square-foot office building in Somerset County for nearly $100 million, following a sweeping renovation that modernized the 40-year-old property and attracted a global pharmaceutical company as a headquarters tenant.
Onyx Equities and Rubenstein Partners LP this week announced the sale of 211 Mount Airy Road in Basking Ridge, where it had inked a full-building, 16-year lease with Daiichi Sankyo Inc. Published reports identified the buyer as Harbor Group International LLC, a Norfolk, Virginia-based real estate investment firm.
The deal comes a little less than four years after Onyx and Rubenstein acquired 211 Mount Airy Road from the telecom maker Avaya Inc., which was looking to shed real estate at the time. The Wall Street Journal reported that the partnership paid $12.5 million for the campus and initiated an $11 million redevelopment plan.
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Among other changes, the new owners replaced the building’s concrete skin with a contemporary glass curtain wall system that let abundant natural light into tenant spaces. They also performed extensive renovations in the lobby and common areas, resulting in modern amenities such as a cafeteria, fitness facilities, a 127-seat auditorium and conference center.
“Together with Onyx, we were able to create truly unique office product that was ideal for a large tenant desiring a headquarters-quality office campus,” said Stephen Card, principal and the regional director of Mid-Atlantic for Rubenstein Partners. “At Rubenstein, we routinely look to acquire large blocks of quality vacancy in high-performing submarkets, and the 211 Mount Airy Road investment illustrates this thesis successfully playing out.”
In April 2016, the partnership signed a lease with Japanese pharmaceutical maker Daiichi Sankyo, in what was one of the largest and most high-profile leases of the year. The sale to Harbor Group comes in a submarket in which office vacancy is above 20 percent, but both tenants and investors have shown a willingness to pay up for modernized buildings in good locations.
“When Onyx and Rubenstein purchased 211 Mt Airy Road and decided to transform it into one of the best suburban office buildings in New Jersey, we were convinced that a great multinational company would identify our commitment to quality,” said DJ Venn, senior vice president of asset management for Onyx Equities. “We were proud that Daiichi Sankyo chose this outstanding asset as its headquarters.”
Onyx this week also announced the sale of another property, the landmark former Hess headquarters building in Woodbridge. The firm and a separate partner, Russo Development, acquired the 205,000-square-foot tower in 2015 and subsequently completed a full-building, 15-year lease with the New Jersey Turnpike Authority.
The iconic green Hess sign that had long been visible from the New Jersey Turnpike has since been removed and replaced by Onyx’s logo. The firm, which is based in a separate building in Woodbridge, did not disclose the sale price or the name of the buyer in this case.
The dispositions come as Onyx continues with a repositioning effort at another office building, 340 Mount Kemble Ave. in Morris Township. The firm acquired the nearly 400,000-square-foot complex last summer in partnership with PCCP LLC and has outlined plans for a large-scale renovation akin to what took place at 211 Mount Airy Road.
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“We are proud to have made an impact on these assets during our ownership and feel that we have left them better than they were found,” Venn said. “Many were not willing to take on the challenges initially posed by these properties. We specialize in finding that hidden value and team members who can bring it to fruition.”