Lone Star Funds Sells New Jersey Office Asset

180 Park Ave. Image courtesy of JLL Capital Markets

The Class A office property at 180 Park Ave. in Florham Park, N.J. has come under new ownership, courtesy of a transaction orchestrated by JLL Capital Markets. Acting on behalf of Lone Star Funds, the real estate capital solutions provider arranged the sale of the 228,000-square-foot asset to a joint venture of Vision Properties and The Birch Group.

READ ALSO: Top Challenges for Office Owners, Property Managers

180 Park last changed hands in 2015, when Lone Star Funds acquired the asset for $31.5 million, according to Morris County records. Located roughly 35 miles across the Hudson River from Manhattan, the three-story building occupies a nearly 27-acre site within the 268-acre The Green at Florham Park master-planned development. The property made its debut in 2001 and has maintained its premier status through upgrades, including renovations at the hands of the previous ownership. Today, 180 Park is 75 percent leased and is home to a diverse roster of businesses, including Transwestern, which relocated to the building in 2018, and anchor tenant Maersk Inc., which inked a 70,000-square-foot lease for its headquarters in 2014.

The investment community gave 180 Park a robust reception, lured by the asset’s strong location, notable upside potential and other key factors. “The pandemic has highlighted the need for credit and term in the office market,” Jose Cruz, senior managing director with JLL Capital Markets, told Commercial Property Executive. “Predictable and stable cash flow has become even more valuable in today’s environment and both institutional and private investors are underwriting those credit tenants more aggressively.” JLL Capital Markets’ Kevin O’Hearn, Steve Simonelli and Michael Oliver joined Cruz on the team representing the seller.

Asset stabilization

New Jersey’s average office vacancy rate has hovered in the mid-20-percent range since the Great Recession and in the third quarter of 2020, it reached 24.4 percent, according to a JLL report. Vision and Birch, however, are undeterred by the less-than-optimal numbers, having orchestrated the successful stabilization of a Garden State office building in recent years. The partners acquired 350 & 360 Mount Kemble Ave., a 230,000 square-foot complex in Morristown, in April 2018 and 18 months later, with a renovation program completed, the property’s occupancy level had gone from 81 percent to 97 percent. Vision and Birch have the same plan for their newest acquisition. In a prepared statement, David Milewski, senior asset manager with Vision Properties, said the joint venture will be aggressively implementing a business plan to further differentiate the asset from its competitive set.