The deal was arranged by Cushman & Wakefield's Metropolitan Area Capital Markets Group, specifically Gary Gabriel, Andrew Merin, David Bernhaut and Jose Cruz. The sale price was not disclosed; industry sources put the number in the $30-million range. Ivy and Urdang had acquired the building and its 13.5-acre site in early 2005 from Lincoln Property Co. and Archon for a reported $25 million. Ivy and Urdang subsequently picked up a $17.8-million first mortgage from Aetna to finish off that acquisition.
"It is a very well-located asset with a predictable return and limited leasing exposure," says Gabriel, noting that the 96%-leased building is at the confluence of the New Jersey Turnpike, Garden State Parkway, Routes 1, 9 and 440, and I-287. "The offering drew significant interest and more than a dozen offers.
"Buyer selection is critically important in this market," Gabriel says. "Silverman is an exceptionally well-capitalized private investor that had the ability and willingness to close all-cash, but ultimately agreed to assume the existing loan for a short period of time. That allowed Ivy to avoid considerable defeasance costs. Ivy and Urdang were able to realize a solid return in what has been a challenging market.
"Raritan Plaza III has enjoyed significant leasing momentum recently, which continued throughout the marketing process," Gabriel says. "This was a major appeal to potential investors."
The 27-year-old building, which recently underwent a renovation, currently has a roster of 27 tenants. Just prior to the sale, wholesale insurance broker AmWINS Group Inc. signed a lease for 13,312 sf in a regional office expansion and relocation from another building within Raritan Center. Robert Dinner of C&W's Edison office represented Ivy, and David Zimmel of locally-based Zimmel Associates represented AmWINS.
Part of AmWINS new space on the top floor was being marketed for sublease by Computershare, and as part of the deal, Dinner orchestrated a lease termination with the sublessor and their broker, Richard Madison of Newmark Knight Frank. AmWINS' transaction was then negotiated as a direct lease.
"Ultimately, we captured the space and were able to offer a longer lease term to AmWINS," says Dinner. "This transaction brought in another quality tenant and helped stabilize the asset on long-term basis."
Terms of the AmWINS lease were not disclosed. Current availabilities in the building amounting to about 7,500 sf are listed with an asking price of $24.50 per sf for five-year and 10-year terms.
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