New Jersey Cheat Sheet: Toys ‘R’ Us unloads former Wayne HQ, Gov. Murphy touts Opportunity Zone awards… & more

TRD TRI-STATE /
Mar.March 19, 2019 02:00 PM
 

Clockwise from the left: City of Newark to pay $27M to occupy a site it owned until selling it for $1 in 2017, PAG Investments secures $25.5M in Woodbridge retail center financing, New Jersey Gov. Phil Murphy touts federal Opportunity Zone potential and Gateway Program funding is omitted from the federal government’s 2020 budget due to a ‘medium-low’ FTA rating.

Former Toys ‘R’ Us HQ in Wayne sold to mystery buyer
CBRE Group closed Monday on the sale of a 621,000-square-foot former Toys “R” Us corporate headquarters in Wayne. CBRE’s Jeff Babikian, Robert L’Abbate, Allyson L’Abbate, Nor Ramos and Brian Godau advised the company on the sale, although the brokerage firm’s statement did not disclose the purchase price for the 191-acre campus, which was sold to an unnamed buyer. The two-building property, known as 1 Geoffrey Way after the giraffe made famous by the now bankrupt toy retailer, will now see its new owner enhance the site for multiple uses, according to NorthJersey.com. The outlet noted that the property first belonged to chemical conglomerate American Cyanamid, which built the complex overlooking Point View Reservoir in 1962. It was renovated in 2003 when Toys “R” Us acquired the building. Following the announcement in March 2018 that Toys “R” Us would vacate the premises after filing for bankruptcy several months prior, credit rating agency Moody’s assigned an Aaa rating to Wayne’s $17.2 million in Series 2018 obligation bonds. Toys “R” Us is currently in the process of selling off certain stores, a process for which it has hired JLL. The storied toy seller hopes to revive at least some of its business. As noted by The Real Deal on Monday, Target has agreed to replace a 90,000-square-foot Toys “R” Us store at Caesar’s Bay Shopping Center in Brooklyn. [NorthJersey.com]

Governor unveils grants to generate Opportunity Zone interest
New Jersey Gov. Phil Murphy and Anthony Foxx, a former U.S. secretary of transportation, discussed the prospects and expectations of the much-hyped federal Opportunity Zone program at the Choose New Jersey Opportunity Zone Summit last week in New Brunswick, as noted by ROI-NJ. According to InsiderNJ, Murphy spoke about the Garden State’s Economic Development Authority, the state’s Division of Community Affairs and plans by the state’s Redevelopment Authority to develop initiatives to facilitate Opportunity Zone investment. Altogether, New Jersey has identified 75 municipalities with a combined 169 sites eligible for Opportunity Zone incentives, at least half of which are located in the northern part of the state, as noted by The Real Deal in its recent Tri-State issue. Murphy said his administration will hand out five $100,000 grants to the municipalities that best create and showcase a successful strategy for Opportunity Zone investments. The Real Deal reported earlier this month on U.S. Housing and Urban Development Secretary Ben Carson stating his preference that certain grants be given to developments that include affordable housing. On March 19, Ron Beit, founding partner and CEO of Newark-based developer RBH Group, said that he would launch an investment fund that will partner with Opportunity Zone funds to build housing for teachers and undertake “other social impact-related projects” in cities across the country. Beit has been a supporter of the Opportunity Zone program, which was passed as part of the late 2017 federal tax overhaul. [ROI-NJ]

Newark has greatest US home value appreciation in February
While U.S. housing prices have continued to slide, dropping to their lowest level last month since March 2012, according to a recent Redfin report, things are looking up in Newark. Redfin found that the city had a 12.2 percent year-over-year growth in its home prices in February, whereas overall home sale prices throughout the country increased by just 0.6 percent nationally last month. Newark’s median price growth increased to $330,000 in February, according to the brokerage, which noted that the national median was $287,400 that month. Buffalo, Cincinnati and Grand Rapids, Michigan, were the other cities to top Redfin’s list, as noted by Mansion Global, at 11.7, 11.3 and 9.6 percent home price growth, respectively. The brokerage’s study also found that San Francisco saw a dip in home values of 7.9 percent in February, while Bridgeport, Connecticut, experienced a 15.2 percent decline in home prices, with those in San Jose, California, dropping by 11.3 percent. Redfin said that completed home sales increased nationally in February for the first time in seven months and only the third time in the last year. A separate report released this month from GoBankingRates.com found that Newark homes listed for sale remained on the market for an average of 45 days, one of the lowest rates in the country. [Redfin]

Newark scrutinized over $27M parking lot lease-back deal
Newark’s 5-4 city council vote to pay $27 million over 30 years to occupy land it previously sold for $1 to the Newark Parking Authority angered local residents and administrators earlier this month. According to NJ.com, the city council voted to enter into a 30-year agreement with the parking authority at a site it is developing at 43-67 Green Street – three blocks from Newark Penn Station and immediately adjacent to the Prudential Center and Newark Municipal Court. As noted by The Real Deal, Newark will pay $27 per-square-foot with a 5 percent increase every three years for the land, where it will relocate its finance department, lease 26,000 square feet of space for its municipal court and occupy 258 parking spaces for use during business hours. The parking authority, an autonomous public agency, is currently developing a $34 million mixed-use property and an adjacent parking structure at the site, which property records show has been assessed at more than $10 million. The city administration became entangled with the development of 43-67 Green Street in 2013 when, under a revenue sharing arrangement with the National Hockey League’s New Jersey Devils and their home arena (the roughly 18,000-seat Prudential Center), it agreed to build a parking structure. NJ.com reported that Newark sold the land to the parking authority for $1 in 2017. [TRD]

C&W to manage Turnbridge’s new 22-acre campus in Newark
Turnbridge Equities’ recently purchased Ballantine & Sons brewery site in Newark is set to be managed by Cushman & Wakefield’s Michael Nevins, Sam Collison, Mike Baldino, Eladio Bracero and Kevin Smith, the real estate firm announced last week. The 22-acre campus, was originally owned and operated by P. Ballantine & Sons Brewery until it closed in 1972. Turnbridge, which has been on an acquisition spree in recent months, bought the property in February with plans to re-position it into a 1.1 million-square-foot mixed-use project with the potential for additional development. Nevins said the site will see significant investment by Turnbridge and its joint-venture partner JPMorgan Asset Management. The Real Deal reported last month that Turnbridge paid $61 million for the campus, which is located within a designated Opportunity Zone in Newark. The site at 424 East Ferry Street in Newark, whose sale was brokered by JLL, currently contains five light-industrial facilities. [Real Estate NJ]

Buyer secures financing for $25.5M Woodbridge Crossing trade
New York-based PAG Investments closed last week on its purchase of the Woodbridge Crossing retail center in Middlesex County, according to GlobeSt, which noted that the deal received $25.5 million in acquisition financing arranged by Dallas-based brokerage HFF. PAG, a privately held real estate investor, secured a five-year loan for the deal through HFF and Citizens Bank. Woodbridge Crossing was built in 2001 and renovated last year by its now former owner Onyx Equities, which bought the complex in 2012. The 285,210 square-foot center is 80 percent leased and has over 136,000 nearby residents earning an average household income of more than $93,000 living within a three-mile radius, according to HFF. Big Lots, Burlington Stores, Modell’s, Party City and Planet Fitness are some of the tenants at Woodbridge Crossing. The 19-acre campus was purchased by PAG five months after the firm paid $7.2 million to buy a 15-acre, 155,079-square-foot office complex in Suffolk County from Soundview Realty Group. HFF’s Michael Klein and Rob Hinckley represented PAG in the Woodbridge Crossing transaction. On March 19, Chicago-based JLL announced that it would acquire HFF in a $2 billion deal. [GlobeSt]

FTA rating leaves Gateway project ineligible for federal funding
The Gateway Development Corporation, currently overseeing the estimated $12.7 billion construction of additional tunnels, maintenance and ridership expansion between Newark Penn Station and its Penn Station counterpart in Manhattan, had a significant setback last week when it was omitted from the 2020 federal budget, reported NJBiz and other local outlets. According to an analysis by Bloomberg, the proposed tunnels and other upgrades, collectively known as the Gateway Program, received a “medium-low” priority rating from the Federal Transit Administration leading to its omission from the budget. Former President Barack Obama promised matching funds towards the repairs and upgrades proposed by the development corporation after Superstorm Sandy in 2012. In 2017, the Gateway Program made significant strides when former New Jersey Gov. Chris Christie and current New York Gov. Andrew Cuomo agreed to commit a combined $5.55 billion toward the construction of a portal bridge in Kearny and a new tunnel, the latter a key cog in the Amtrak-owned Northeast Corridor. But bureaucratic infighting and President Donald Trump’s skepticism about the commuter project have kept it in a holding pattern. Cuomo’s office released a statement on March 19 criticizing the Trump administration’s lack of support for the Gateway Program. In a press conference, Cuomo called the decision “political retaliation” by Trump against regions that did not support his bid for the presidency. [NJBiz]


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