Newmark recently announced that its Capital Markets Team successfully sold a northern New Jersey core industrial portfolio to an institutional investor for an undisclosed amount.
Comprising five newly constructed buildings that are 100% leased, the portfolio in Carteret and West Caldwell totals 405,000 square feet, with a weighted average lease term of six years.
The acquisition provides the investor with an immediate presence in locations that offer the ideal labor and population density combination, each just minutes from Exit 12 of the New Jersey Turnpike and the Interstate 80 and Route 46/23 Corridor.
Newmark’s Capital Markets Executive Managing Director Kevin Welsh and Managing Director Brian Schulz collaborated with President of Global Industrial and Logistics Jack Fraker and Vice Chairman Dustin Volz to advise on the sale. Managing Director Chris Koeck served as the team’s leasing market adviser.
“This portfolio exemplifies best-in-class logistics design in high-barrier markets with durable income streams in irreplaceable locations. The investor recognized the rare opportunity to deploy core capital in scale in the Northern New Jersey Industrial market,” Welsh said. “This transaction will be highly accretive, as rents are marked to market and the portfolio’s value grows over a long-term hold.”
The portfolio represents a critical mass of modern generation, Class A single-tenant industrial properties ranging in size from 50,802 square feet to 134,453 square feet. The buildings’ features include a 32- to 36-foot clear height, one building with a 7,500-square-foot loading capacity, and an average 1.1 spaces per 1,000 square feet for car parking. The average building size of 80,000 square feet offers a distinct differentiation from other modern inventory, yielding a market rent premium for smaller standalone spaces.
The five properties in the portfolio include:
- 120 Raskulinecz Road: 84,628 square feet on 4.6 acres;
- 250 Federal Blvd.: 54,062 square feet on 2.9 acres;
- 200 Federal Blvd.: 50,802 square feet on 2.9 acres.
- 1 Dedrick Place: 134,453 square feet on 10.6 acres;
- 5 Dedrick Place: 80,768 square feet on 7.4 acres.
These properties were built to serve various future tenant uses, minimizing downtime across the portfolio. The portfolio also benefits from a strong and diverse tenant base from an established mix of credit and growth companies, providing a long-term, durable income stream.
According to Newmark Research, leasing absorption for industrial in the third quarter of 2023 totaled 1.8 million square feet, bringing the year-to-date total to 4 million square feet. The construction pipeline remains robust and asking rents have reached a historic high of $15.60 per square foot during Q3 2023.