Huge deal in Newark: Investment group to buy One, Two and Four Gateway Center

Joint venture that includes Garrison Investment Group, Axonic Capital, Taconic Capital Advisors, Onyx Equities and Prudential Financial promises significant upgrade to retail concourse

By Tom Bergeron
Newark | Jan 10, 2019 at 7:30 am
Breaking News

Three of the four Gateway Center buildings in Newark are getting new owners — and the concourse is getting a major facelift, ROI-NJ has learned.

A joint venture between Garrison Investment Group, Axonic Capital LLC, Taconic Capital Advisors and Onyx Equities LLC has acquired One, Two and Four Gateway Center in Newark. Prudential Financial will participate as a co-investment partner.

An announcement will be made Thursday.

Terms of the deal were not disclosed. The size of the transaction, 1.6 million square feet, makes it one of the biggest office deals in the state in recent years. Gateway Center is the state’s largest transit hub office complex.

Onyx Equities will serve as the operating arm, overseeing asset and property management, tenant relations, leasing and construction.

John Saraceno, co-founder and managing principal of Onyx Equities, said increased residential investment in Newark and Harrison, coupled with an uptick in corporate relocations to Newark sparked the joint venture’s interest in the Gateway Center opportunity.

“To me, Newark is forever changed, and we just want to build on that,” he told ROI-NJ. “And we think we have the single most important asset in the cadre of assets to make Newark special. We can close the loop on what’s been done to the west of us with PSEG and Prudential and Ironside and the Prudential Center and all the things that had been done in the last 15 to 20 years. The key to it all, in my opinion, has always been, can anybody fix Gateway? And I think we finally figured out how to do it.”

The ownership group said it intends to execute a multimillion-dollar modernization plan, predicated on a significant repositioning of the Gateway Retail Concourse to create a more vibrant retail marketplace.

Approximately 60,000 people go through the 1,400-linear-foot Concourse each week, including PATH, New Jersey Transit and Amtrak commuters, Gateway employees, neighboring employees, visiting clientele, Prudential Center spectators, as well as students from New Jersey Institute of Technology, Rutgers University-Newark and Seton Hall University.

Saraceno said the new ownership group believes the improvement plan will reinvent the concourse as a destination, and spur significant demand from retailers and corporate office users who prioritize access to transit and a talented, diverse workforce.

Eric Rosenthal, managing director of Garrison Investment Group, said the potential is great.

“We echo Onyx’s excitement regarding the Gateway Center acquisition,” Rosenthal said. “We look forward to contributing to Newark’s positive momentum while repositioning the iconic campus.”

Adam Karafiol and Matthew Flath of Onyx will lead office and retail leasing efforts. The JLL team of Tim Greiner, Blake Goodman and Colleen Maguire has been assigned as agent for Gateway One and Two. The RKF team of Glenn Beyer, Jerry Rockoff, and Rob Mackowski has been assigned as the retail agent.

Gensler was selected as project architect, led by Dana Nalbantian. Rebranding and marketing assistance will be provided by Real Estate Arts, led by Michael Goodgold.

Goodman, an executive vice president at JLL, said his team is ready to go.

“We are excited to be part of this incredible team whose focus is to create a unique and inviting experience for tenants and visitors at the Gateway Center and bring the Gateway Center back to prominence in Newark,” he said.

JLL’s capital markets group, led by Thomas Walsh and Joseph Garibaldi, managing directors, served as investment sale broker in the transaction.

“Well-capitalized and united ownership will provide the key ingredients in the Gateway Complex reclaiming its reputation as one of the best transit-oriented office portfolios in the Northeast.” Walsh said.

About the players:

  • Onyx Equities LLC, headquartered in Woodbridge, is a leading, full-service real estate firm specializing in investment, asset repositioning and ground-up development.
  • Garrison Investment Group is a New York-based firm that has acquired more than $3.3 billion of real estate across property types since it was founded in 2007.
  • Taconic Capital Advisors L.P. is a New York-based global institutional investment firm founded in 1999 by former Goldman Sachs partners Frank Brosens and Ken Brody.
  • Axonic Capital is a New York-based investment adviser founded by Clayton DeGiacinto in 2010. Axonic’s primary business manages client capital in commercial real estate, structured credit and systematic fixed income.
  • Prudential Financial Inc. is a Newark-based global financial services leader that has been a pioneer in impact investing and is building a $1 billion portfolio of investments that combines both social and financial return.
  • JLL is a leading professional services firm that specializes in real estate and investment management.

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