Madison in $71.15M Financing For NJ Office and Industrials

2 Gatehall Drive, Parsippany, NJ

PARSIPPANY AND GARFIELD, NJ— Madison Realty Capital provided first mortgage loans totaling $71.15 million for two commercial properties in Northern New Jersey. Madison arranged a $45 million loan to finance the acquisition of 2 Gatehall Drive in Parsippany, a 404,515 square-foot office property, and a $26.15 million loan to recapitalize 141 Lanza Avenue in Garfield, a 33-acre, 1.16 million square foot industrial property including warehouse and self-storage uses. As previously reported by GlobeSt.com , Piedmont Office Realty Trust sold the Gatehall Drive property to an undisclosed buyer as part of a $110 million, two-building portfolio, earlier this week. “MRC specializes in funding for transitional properties, and 2 Gatehall Drive is a great example of how we serve the needs of middle-market borrowers with plans for redevelopment,” says Josh Zegen, co-founder and managing principal of MRC.  “This is a well-located suburban property with great prospects for leaseup of the current availability.” MRC funded $33 million at closing to facilitate the borrower’s “time-of-the-essence” acquisition of 2 Gatehall Drive within 17 days of sourcing the transaction, and reserved a future funding component of $12 million for “good-news” leasing. Piedmont purchased the building for roughly $110 million in 2002.  The property is a three-story office building with abundant parking on a 19-acre site in a popular suburban New Jersey office submarket.  The borrower, a regional real estate investment firm that MRC also declined to name, plans to re-tenant a portion of the property, modernize the property’s common areas, and enhance the building amenity package.

141 Lanza Avenue, Garfield, NJ

At 141 Lanza Avenue , the borrower approached MRC to recapitalize the property, which had been in special servicing and under control of a receiver since late 2014, in part due to an underlying tax dispute with the municipality.  After cleaning up the capital structure with funds from MRC , the borrower plans to continue leasing and asset management efforts to fully stabilize the property. “ MRC is experienced with the restructuring process, including special servicing in the CMBS context, and we frequently find solutions to help borrowers navigate those challenges and unlock value,” Zegen says.  “We’re glad to assist in making a better future for this asset.  The property should be well-positioned to continue as industrial, or could also support residential development in the future, given the amount of new apartments in the immediate area.”