NEW PROVIDENCE, NJ– Bergman Real Estate Group and its affiliated company, Garden State Office Properties, have acquired a 112,000-square-foot office building located at 121 Chanlon Road in New Providence, NJ, with a vehicle managed by Rialto Capital Management, a wholly owned subsidiary of Lennar Corporation. Steven Schultz of Newmark Grubb Knight Frank represented the seller, Reed Elsevier, in the transaction, while Michael Difede, director of acquisitions and Michael Brody, principal of Garden State Office Properties, represented Bergman.

“We are very excited about this new acquisition,” says Michael Bergman, president of Bergman Real Estate Group. “This is a well-constructed, quality building that is brand new to the Summit/New Providence office market, within walking distance to the Murray Hill Train Station and nearby retail and fitness facilities.  We believe this provides an attractive opportunity to companies seeking a suburban, transit-oriented location with amenities for their employees.”

121 Chanlon Road is part of a two-building office complex known as the New Providence Business Campus, which has been owned and occupied by Reed Elsevier and served as a corporate headquarters for Reed Elsevier's LexisNexis and Martindale-Hubbell divisions. As part of a sale-leaseback transaction, Reed Elsevier consolidated into the two-story building, located at 630 Central Avenue, while at 121 Chanlon Road, Martindale will continue to occupy a full floor of 35,000 square feet. Additionally, Bergman has announced a new full-floor lease with Phoenix Marketing Group.

The building provides tenants with direct access to New York City via NJ Transit, and offers close highway access to I-78 (Exit 43), Route 24 and the Garden State Parkway. Adjacent to the property is the newly renovated Shoppes at New Providence, with restaurants, a U.S. Post Office, the Central Farmers Market and the Fitness Factory Health Club. Other amenities in the area include the Murray Hill Health & Racquet Club and the Berkeley Heights Aquatic Center located across the street, the Best Western Murray Hill Inn & Suites one quarter of a mile from the property, and Summit Medical Group medical campus within two miles.

Built in 1990, 121 Chanlon is a four-story, class A office building featuring a red brick façade and a full-height center atrium with an arched glass ceiling.  The building has a full-service cafeteria, and executive covered parking under the building.  The building occupies 6.5 acres in a scenic, park-like setting with a walking trail and outdoor patio seating area.

This purchase marks the second transaction in three months between Bergman and Rialto Capital. In August, the companies jointly acquired 100 Eagle Rock Avenue in East Hanover, NJ—a 90,000-square-foot office building.  Both transactions were financed with acquisition loans provided by M&T Bank, represented by regional manager Richard Steele and vice president Mark Zurlini.

“Both of these acquisitions are consistent with our newly formed Garden State Office Properties' business model, which is to buy well located, under-performing office buildings at an attractive basis with upside potential for value appreciation through the lease-up of the property,” says Bergman. “Our newly formed relationship with Rialto has been a perfect fit for this program.”

Bergman is repositioning 121 Chanlon Road as a multi-tenant building. Currently, the building's entire second floor, totaling 35,000 square feet, is available for lease and is divisible to 10,000 square feet. There are also smaller units of 2,000 square feet and 3,200 square feet available on the ground floor.  

Bergman is planning significant capital improvements to the property, including a more prominent entrance, lobby upgrades with new lighting and furniture, and numerous other common area enhancements.  Bergman has engaged Studio 1200 to design these planned improvements.