700 Blair Rd., Carteret, NJ

CARTERET, NJ—Hampshire Companies of Morristown, NJ has sold a portfolio of 33 industrial buildings and development sites in the Garden State to Dallas-based Colony Industrial, which announced last week that it has put its multi-billion-dollar industrial portfolio on the market for sale.

The deal was announced by CBRE, which brokered the deal that includes 30 industrial buildings totaling more than 1.3 million square feet. Colony Industrial acquired the portfolio, which is situated on nearly 83-acres of land, for an undisclosed sale price. Also included in the transaction were three development sites located in Carteret and West Caldwell, NJ totaling 46-acres.

Colony Industrial is the industrial platform of Los Angeles-based Colony Capital. No financial details of the transaction were disclosed.

Brian Fiumara, Michael Hines, Brad Ruppel and Lauren Dawicki of CBRE Capital Markets’ Institutional Properties team, in partnership with CBRE Vice Chairman Thomas Monahan, negotiated the multi-faceted transaction on behalf of Hampshire Real Estate Companies.

The acquired assets by Colony Industrial are located within the Northern New Jersey industrial market and are currently 99% occupied by a diverse tenant roster. CBRE states that the portfolio provides a continuous cash flow with value enhancement through contractual lease escalations and rollover of existing tenants to continually increasing market rental rates.

“This portfolio offered Colony Industrial the very rare opportunity to acquire a critical mass of high-quality industrial assets and a future development pipeline in a joint venture structure with Hampshire Real Estate Companies, one of the most respected developers in New Jersey,” says CBRE EVP Fiumara. “This deal was a win-win for both parties and we are proud of the outstanding results our team was able to deliver.”

Among the properties in the portfolio are 41 Slater Drive, Elmwood Park, 700 Blair Road, Carteret and 231-232 Main Street, Little Falls, NJ.

Colony Capital announced on Aug. 9th as part of its second quarter financial report that it has engaged advisors to market the company’s multi-billion-dollar industrial portfolio for sale, which may include the related management platform.

“There has been significant appreciation in the value of our industrial portfolio driven by favorable operating fundamentals and strong investor demand for light industrial assets. As a result, a sale of the industrial portfolio may yield a price higher than the value that may be ascribed by the market to the industrial portfolio as part of the company’s overall valuation,” the company states.

Colony Capital is seeking to complete a sale by the end of 2019.

As of June 30, 2019, the consolidated light industrial portfolio consisted of 446 light industrial buildings totaling 55.7 million rentable square feet across 26 major U.S. markets and was 92% leased. The company’s equity interest in the consolidated light industrial portfolio was approximately 34% as of June 30, 2019 and March 31, 2019. Total third-party capital commitments in the light industrial portfolio were approximately $1.7 billion compared to cumulative balance sheet contributions of $749 million as of June 30, 2019. The light industrial portfolio is composed of and primarily invests in light industrial properties in infill locations in major U.S. metropolitan markets generally targeting multi-tenanted warehouses less than 250,000 square feet.

As of June 30, 2019, the consolidated bulk industrial portfolio consisted of six bulk industrial buildings totaling 4.2 million rentable square feet across five major U.S. markets and was 67% leased. The company’s equity interest in the consolidated bulk industrial portfolio was approximately 51%, or $72 million, with the other 49% owned by third-party capital, which is managed by the company’s industrial operating platform.

Back in March of this year, Colony Industrial acquired a class A building in Mahwah, NJ, with 271,176 square feet, and two class A light industrial buildings in Las Vegas totaling 423,786 square feet.

In February, Colony Industrial closed on the sale of a light industrial portfolio to Nuveen Real Estate, a division of TIAA, for $136 million. The warehouse portfolio totals 2.3 million square feet and is situated in four markets including 18 buildings in Atlanta, five buildings in Dallas, five buildings in Houston and six buildings in PA/NJ.