In huge life science transaction, Onyx Equities acquires 108-acre Merck site in Kenilworth

Firm, which teamed with New York-based Machine Investment Group, intends to maintain site as life science hub for state

The Merck campus in Kenilworth. ­— Onyx Equities

In one of the largest life science property transactions in state history, Onyx Equities announced Thursday that it has teamed with New York-based Machine Investment Group to acquire the massive 108-acre Merck campus in Kenilworth.

Merck, which moved its headquarters to Rahway in 2022, will remain as a tenant on the site, but will begin a process of vacating the property in phases — with an expectation that it will depart by the end of 2026. Terms of the deal were not disclosed.

The campus features nearly 2 million square feet of biologics, research & development buildings — all of which is state-of-the-art.

Onyx Equities co-founder and Managing Partner John Saraceno told ROI-NJ that the quality of the site is what made the deal unique — and what makes the Merck site different from other life science centers in the state.

“The difference here is that what we have was built by Merck,” he said. “There’s nothing that competes — or is even close to what we have from the standpoint of infrastructure. What’s here is state of the art. It’s Grade A.”

While Merck begins its exit, Onyx will begin developing some parcels on the site and redeveloping some existing buildings, Saraceno said.

Onyx Equities and Machine Investment will then market the site’s state-of-the-art laboratories and support facilities to biotechnology, pharmaceutical and technology companies that value a highly educated life sciences labor pool and proximity to regional infrastructure and thoroughfares, they said.

There is plenty to market.

In addition to more than 1.4 million square feet of laboratories, the campus features 500,000 square feet of Class A professional office space, 30 acres of developable land, a 25-megawatt cogeneration plant, three full-service cafeterias, a fitness center, auditoriums and conference centers, outdoor amenity areas and more than 3,200 surface and structured parking spaces.

The property sits at a direct interchange off the Garden State Parkway at Exit 138. In addition to direct access to Parkway, the property enjoys proximity to Interstate 78, the Route 22 retail corridor, the New Jersey Turnpike, Newark Liberty International Airport and the Port Newark Elizabeth Marine Terminal.

Gov. Phil Murphy said the transaction is a win-win for the state.

“New Jersey receives two forms of good news today, as one of the pillars of our business community chooses to commit its long-term future to New Jersey and one of our leading developers prepares to build a high-tech life sciences hub, consistent with our vision for New Jersey’s economic future,” he said.

“I congratulate both Merck and Onyx and eagerly await the advancements they will make in our state, which will solidify our status as a national leader in the life sciences sector.”

Saraceno said the space will show the state still is a leader in the life sciences sector.

“The life sciences industry is surging, and its rapidly developing technology requires new specialty facilities,” he said. “The Merck campus represents an opportunity to host blue-chip companies that will benefit from proximity to New Jersey and New York’s highly educated workforce.

“We’re excited to apply Onyx’s unique asset repositioning platform to attract the next generation of life science and technology leaders.”

Shefali Shah, the global real estate lead for Merck, said the transaction has enormous potential.

“This collaboration is an incredible opportunity to help reimagine the hub of life sciences while also continuing Merck’s strong history and legacy of serving patients and communities,” she said. “We believe Onyx Equities LLC will foster long-term value, economic growth and sustainability within the community.

“We look forward to collaborating with Onyx Equities LLC and their team members on a smooth transition.”

Saraceno thanked Merck and JLL for helping Onyx get to the finish line of such a challenging deal.

“It’s probably the toughest deal I’ve ever done because of the economic climate we’re in,” he said. “It wasn’t as much the deal, as it was the economy that we’re in.

“I think it’s a testament to a good seller. They worked with us and they were patient because they understood how hard it was. And we were a determined buyer.”

Merck was represented in the transaction by Dan Loughlin, Jose Cruz, and Kevin O’Hearn of JLL’s New Jersey office. Onyx’s development team handled the transaction internally.

Cole Schotz counseled Onyx in connection with the joint venture aspects of the deal and upper-tier corporate structuring, as well as a portion of the finance component. The Cole Schotz team included members Jordan Metzger and Samantha Epstein, as well as paralegal Kim Calkin.