Silverman Buys Raritan Plaza III

By Eric Peterson at GlobeSt.com

Friday, May 09, 2008 -  EDISON, NJ-In one of the few non-institutional, stabilized office investment sales in New Jersey in 2008, Raritan Plaza III, a 182,616-sf class A office building at 105 Fieldcrest Ave. at the entrance to the sprawling Raritan Center business park here, has been sold by Ivy Equities, Montvale, NJ, and equity partner Urdang Capital. The Silverman Group, Short Hills, NJ, now owns the six-story asset after a three-year stay in Ivy’s portfolio.
The deal was arranged by Cushman & Wakefield’s Metropolitan Area Capital Markets Group, specifically Gary Gabriel, Andrew Merin, David Bernhaut and Jose Cruz. The sale price was not disclosed; industry sources put the number in the $30-million range. Ivy and Urdang had acquired the building and its 13.5-acre site in early 2005 from Lincoln Property Co. and Archon for a reported $25 million. Ivy and Urdang subsequently picked up a $17.8-million first mortgage from Aetna to finish off that acquisition.

"It is a very well-located asset with a predictable return and limited leasing exposure," says Gabriel, noting that the 96%-leased building is at the confluence of the New Jersey Turnpike, Garden State Parkway, Routes 1, 9 and 440, and I-287. "The offering drew significant interest and more than a dozen offers.

"Buyer selection is critically important in this market," Gabriel says. "Silverman is an exceptionally well-capitalized private investor that had the ability and willingness to close all-cash, but ultimately agreed to assume the existing loan for a short period of time. That allowed Ivy to avoid considerable defeasance costs. Ivy and Urdang were able to realize a solid return in what has been a challenging market.

"Raritan Plaza III has enjoyed significant leasing momentum recently, which continued throughout the marketing process," Gabriel says. "This was a major appeal to potential investors."

The 27-year-old building, which recently underwent a renovation, currently has a roster of 27 tenants. Just prior to the sale, wholesale insurance broker AmWINS Group Inc. signed a lease for 13,312 sf in a regional office expansion and relocation from another building within Raritan Center. Robert Dinner of C&W’s Edison office represented Ivy, and David Zimmel of locally-based Zimmel Associates represented AmWINS.

Part of AmWINS new space on the top floor was being marketed for sublease by Computershare, and as part of the deal, Dinner orchestrated a lease termination with the sublessor and their broker, Richard Madison of Newmark Knight Frank. AmWINS’ transaction was then negotiated as a direct lease.

"Ultimately, we captured the space and were able to offer a longer lease term to AmWINS," says Dinner. "This transaction brought in another quality tenant and helped stabilize the asset on long-term basis."

Terms of the AmWINS lease were not disclosed. Current availabilities in the building amounting to about 7,500 sf are listed with an asking price of $24.50 per sf for five-year and 10-year terms