Onyx Equities acquires massive New Jersey office portfolio for $160M

10-building portfolio in Morris County is the latest portion of Mack-Cali Realty Corp. to sell

TRD TRI-STATE /
Sep.September 16, 2020 12:30 PM
Onyx Equities' Jonathan B. Schultz (left) and John Saraceno, Jr. with 7 Sylvan Way (right) and 8 Campus Drive in New Jersey (Onyx Equities)

Onyx Equities’ Jonathan B. Schultz (left) and John Saraceno, Jr. with 7 Sylvan Way (right) and 8 Campus Drive in New Jersey (Onyx Equities)

Mack-Cali Realty Corp. continues to shed its suburban office buildings as it focuses on properties closer to the New Jersey waterfront.

The Jersey City-based real estate investment trust recently sold a 1.5 million-square-foot office portfolio in Morris County, New Jersey, to Onyx Equities, along with partners Taconic Capital Advisors, Axonic Capital and Machine Investment Group. According to the firm, Onyx and its partners paid $160 million for the 10-building parcel. The sale comes two years after Onyx acquired another Mack-Cali office portfolio in nearby Bergen County.

Mack-Cali has in recent years shifted its strategy to focus on the acquisition of office and multifamily properties on the Hudson County waterfront. In 2019, the firm announced that it would shed its entire suburban office portfolio in order to pay down its corporate debt. The REIT also recently tapped MaryAnne Gilmartin to temporarily serve as CEO amid a larger shake-up of its leadership team. Mack-Cali did not immediately have a comment on the transaction.

Although the Morris County assemblage went into contract before the pandemic, the unusual investing environment, and the question of whether employees will be returning to offices in the near future, impacted the transaction.

John Saraceno, Jr., managing principal for Onyx Equities, said the final purchase price was 10 percent lower than the initial offer, and some assets were left out of the transaction. Real Estate New Jersey reported in December 2019 that Onyx was in contract to buy 2.4 million square feet for $288.5 million.

“In conjunction with Mack-Cali, we worked through some revisions to pricing and staggered the closing,” said Saracenno. “We both recognized the world was different.”

The buildings included in the transaction are all located in Morris County. Nine are in Parsippany: 1, 3, 5 and 7 Sylvan Way; 4, 6 and 8 Campus Drive; 2 Dryden Way and 2 Hilton Court. The final building is 1 Giralda Farms, in Madison.

The properties are 84 percent leased, Saraceno said, and he believes they’re well-positioned to benefit both from tenants already in the suburbs who are looking for office space, as well as those looking for space outside of New York City due to Covid-19.

Saraceno acknowledged that in the office sector, the next two to three years may be “choppy,” but he said there will still be a demand for high-quality productivity space — especially if it allows some workers the flexibility to not commute into New York City.

“Our anecdotal evidence tells us that people enjoy being closer to their house,” Saraceno said. “People have recognized once and for all that they don’t need to go to New York City.”






Related Articles

arrow_forward_ios
Timothy Fazio with Central Park Tower, One Vanderbilt and Walt Disney Concert Hall (UPenn, Wikipedia)

PE firm bets on curtain wall maker behind One Vanderbilt, Central Park Tower

PE firm bets on curtain wall maker behind One Vanderbilt, Central Park Tower
(Google Maps)

Port Chester lot near Metro-North station eyed for 120-unit development

Port Chester lot near Metro-North station eyed for 120-unit development
(Google Maps, iStock)

Eastport site eyed for 86-unit retiree community

Eastport site eyed for 86-unit retiree community
(Google Maps)

Smithtown would buy then shutter topless bar to “enhance” town entrance

Smithtown would buy then shutter topless bar to “enhance” town entrance
J.C. Penney at the Westfield South Shore mall in Long Island and  J.C. Penney CEO Jill Soltau (Google Maps; Getty)

J.C. Penney to keep Bay Shore outpost open for now

J.C. Penney to keep Bay Shore outpost open for now
Groton Place (Google Maps)

Gold Coast estate from 1930s hits market for $30M

Gold Coast estate from 1930s hits market for $30M
Gov. Phil Murphy (Getty; iStock)

New Jersey “millionaires’ tax” is done deal

New Jersey “millionaires’ tax” is done deal
Metro Center in Stamford with Jeffrey H. Newman and William R. Berkley (Google Maps)

Berkley Insurance Company leases 63K sf at Stamford’s Metro Center

Berkley Insurance Company leases 63K sf at Stamford’s Metro Center
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...