Rubenstein and Vision in $136M Deal to Redevelop Warren Corporate Center

Warren Corporate Center, Warren, NJ

WARREN, NJ— Rubenstein Partners and Vision Real Estate Partners, building on t he successful transformation of the Morris County-based Alcatel-Lucent campus into a multiple use complex for Bayer and MetLife , have acquired Warren Corporate Center in Warren, NJ, for $136 million and expect to transform it into a similar multiple-tenant, destination-style office and outdoor activity site, Vision’s founder and managing partner, Sam Morreale , tells GlobeSt.com exclusively . “This was once a closed campus, and we now see this as an open, vibrant destination location, in addition to three cafeterias, three fitness centers, and outdoor recreation including volleyball, basketball and walking trails,” Morreale says. “We expect to create some dynamic workspaces, including outdoor working space, including such amenities as shared bicycles, outdoor wifi and collaborative areas.” Rubenstein and Vision bought the complex in a transaction arranged by CBRE .  Warren Corporate Center is considered a best-in-class quality office development containing approximately 820,000 square feet across five, four-story buildings situated on a 176-acre site off of a full interchange on I-78. The property was originally developed in 1996 as the headquarters of Lucent Technologies. In 2004, Citibank leased the property and substantially improved its infrastructure with fully redundant power systems and supplemental cooling, and also enhanced the property’s amenities. “These buildings are well in excess of 150 percent of the HVAC capacity in a normal  office building,” Morreale says. “With 100 percent power backup on a building by building basis, this is really unique in the marketplace. We think this provides a unique nexus of quality and value available to tenants.” The area surrounding Warren Corporate Center offers a highly educated workforce and desirable residential communities, as well as large public recreational areas and top private and public schools. “We focus on value-added investments in the office sector, and we believe that, together with our partner Vision Real Estate Partners , we can significantly improve the appeal of Warren Corporate Center while increasing and diversifying its occupancy,” says Stephen Card , principal and the regional director of Mid-Atlantic for Rubenstein Partners. The property is currently 81 percent leased to Citibank . One of the five buildings is currently available for lease, providing the opportunity to transition from a single tenant headquarters environment towards a multi-tenant office park. “We think that suburban office campuses need to have a whole new paradigm of activity, not the sterile corporate campuses of the past,” says Morreale.  “We’re very focused on that on the other properties that we’ve done.” Morreale says a successful corporate campus model today takes many of its features from university and college campuses. “The workforce of today, they want to earn the way they used to learn,” he says. “If you think about peer universities and how they use the whole area, not only the classroom but the external areas as recreation, collaboration, education, workspace as well, we’re trying to bring that to the office environment in the suburbs. We think this project is well-equipped to do that, given the high quality of it, given the bucolic architecture, it presents itself as if it was a university environment.” Warren Corporate Center also has a day care center, and 4/1,000 square-foot parking – 90 percent of which is provided in adjacent structured parking – within a natural campus setting.  Located directly off I-78 (Exit 36) with proximity to I-287, Routes 202/206, and Route 22, the property has excellent accessibility within a strong Northern New Jersey submarket that has recently seen leasing success.   Jeffrey Dunne , Kevin Welsh , and Brian Schulz of CBRE Institutional Properties in collaboration with Jeremy Neuer of CBRE’s East Brunswick office represented Northwestern Mutual Real Estate in the transaction.  The same team procured the Rubenstein/Vision joint venture as the buyer.  Jim Gunning and Donna Falzarano of CBRE’s Debt & Structured Finance Group also arranged a $123 million term loan, a portion of which is available for future capital and tenant improvements and leasing commissions, led by Bank of America as administrative agent. “It’s one of the top two or three pieces of real estate in New Jersey,” Dunne tells GlobeSt.com exclusively. “You’re going to see Vision and Rubenstein reposition this to a more modern asset that will appear to what I would call the tenant of 2016.” One challenge the deal faced was debt financing, Dunne says. While Citibank will continue to lease space in two of the buildings, its lease comes up for renewal in three years. “We were able to help execute the debt side of the deal, and that might have been the hardest part, since lenders like cash flow, they like term, they like diversity as opposed to one tenant, and we had none of those things,” he says. “It happened to be a consortium of banks that did it. Most lenders want to spread the risk.”