51 John F. Kennedy Pkwy. in Short Hills — Courtesy: HFF
By Joshua Burd
RXR Realty has completed the $368 million sale of six office buildings in Short Hills and Madison to Mack-Cali Realty Corp., according to HFF, in a high-profile trade involving one of the state’s most high-end suburban submarkets.
HFF announced Thursday that it represented RXR in its sale of the 1.1 million-square-foot portfolio and procured the real estate investment trust as a buyer. The office portfolio, which HFF says is one of the largest ever to trade in New Jersey, includes 51, 101 and 103 John F. Kennedy Pkwy. in Short Hills and 1, 3 and 7 Giralda Farms in Madison.
The portfolio is 91 percent leased.
“These are the best suburban office assets in the New Jersey market and they had not traded in well over a decade,” said Jose Cruz, a senior managing director with HFF. “In particular, 51 JFK Parkway, is widely regarded as such, with significant upside in the rents.”
Cruz led the brokerage team from HFF’s Florham Park office with Managing Director Kevin O’Hearn, directors Michael Oliver and Stephen Simonelli, Associate Director Marc Duval, Executive Managing Director Michael Tepedino, with support from Senior Managing Director Andrew Scandalios.
Tenants within the portfolio include KPMG, Wells Fargo, Merrill Lynch, UBS, Dun & Bradstreet, Investors Bank, Citibank, Franklin Mutual Advisors, Pfizer and Prudential, HFF said in a news release. For Mack-Cali, which has been actively selling properties in fringe suburban submarkets, the deal cements its place in a corridor whose rents are among the highest in the state.
“This acquisition signifies Mack-Cali’s substantially expanded presence in the affluent Short Hills submarket — positioning us as the owner of nearly all of the Class A office space, as well as some of the most premier assets in the Madison submarket,” said Michael J. DeMarco, Mack-Cali’s president. “This transaction exemplifies our strategy of owning only the best assets in strong markets that offer tenants state-of-the-art office spaces with a suite of first-class amenities.”
All of the properties are located in the Route 24 corridor, which is close to the affluent residential communities of Millburn, Summit, Livingston, Chatham and Florham Park. In recent years, both investors and tenants have shown an appetite for high-end office buildings in this section of New Jersey.
RXR Realty, the influential New York-based developer, also recently sold a 230,000-square-foot office building in Morristown for $21.5 million. HFF also brokered the sale.
“Short Hills, Madison, and Whippany lead the suburban New Jersey markets in investor demand,” Cruz said. “The buyer performed extremely well and they will benefit from significant growth in that submarket.”