Two years after revealing its Northeast expansion plan, Creation Equity has something to show for it in New Jersey.
The Arizona-based developer and its joint venture partner, J.P. Morgan Asset Management, landed a $64 million construction loan from PCCP for a project at 192 McClellan Street in Newark, Creation announced. The floating-rate financing has a three-year term.
The joint venture is developing a 121,000-square-foot logistics building at One McClellan, a 10-acre site adjacent to Newark Liberty International Airport. The property will have 87 trailer stalls.
The site’s freeway frontage and access to the New Jersey Turnpike and New York City attracted a tenant, Barsan Global Logistics, which signed a lease to occupy the entire property. That deal, in turn, made it easier to find financing.
Creation acquired the site in an off-market deal in 2022. The purchase price was not disclosed, though Cushman & Wakefield later announced that it helped procure $27.3 million in acquisition financing from Citizens Bank, according to NJ Biz.
Vertical construction on the site is expected to begin in the next 60 days. The transformation from long-term parking facility to Class-A industrial site is expected to be completed in February.
Creation’s portfolio spans more than 6.5 million square feet across the country, including $4.5 billion worth of ground-up developments. Bob Agahi co-founded the company in 2018 with David Sellers.
The firm’s $1 billion joint venture with J.P. Morgan Asset Management includes a handful of developments in the Northeast and a few in Arizona and Texas. In 2022, Creation revealed a plan to spend $200 million to expand to the Northeast with two warehouse projects on Long Island and one on the Newark site.
The growth of average asking rent in Northern New Jersey’s industrial market has been ebbing since the pandemic peaks, according to a first-quarter report by Savills. The figure is 4.7 percent higher than a year ago, but has barely moved in recent quarters.
A surge in space delivery last year and early this year is loosening up a historically tight market. The vacancy rate in the first quarter was 6.1 percent, up from 3.4 percent in last year’s first quarter.
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