REBusinessOnline

Birch Group Acquires Four-Building Office Portfolio in Northern New Jersey for $255M

The portfolio spans 843,300 square feet and is 80 percent leased. Pictured is the building at 51 JFK Parkway.

SHORT HILLS, N.J. — The Birch Group has acquired a four-building office portfolio in the Short Hills submarket of Northern New Jersey for $255 million. The 843,300-square-foot portfolio comprises four Class A buildings located at 51, 101, 103 and 150 JFK Parkway.

The properties are currently 80 percent leased to 22 tenants, including Citibank, Investors Bank, KPMG, Bank of America, UBS, Dun & Bradstreet, Morgan Stanley and Wells Fargo.

“During the pandemic, there has been a demographic shift to the suburbs, and the migration of this talent pool represents an extraordinary opportunity to meet the demand for high-quality office assets in prime New Jersey markets,” says Mark Meisner, CEO and founder of Birch.

“Short Hills is among one of the most prestigious suburban locales and it has consistently achieved above-average rents in New Jersey, while maintaining the highest occupancy rates within the market.”

David Bernhaut led a Cushman & Wakefield team that represented the seller, Mack-Cali Realty Corp. (NYSE: CLI). The buyer has also retained Cushman & Wakefield as the leasing agent for the properties.

Birch says it views the acquisition as a repositioning opportunity and plans to employ a value-add strategy. Birch will complement $15.2 million of recently completed renovations at the buildings by previous ownership, in addition to a newly constructed parking deck at 150 JFK Parkway. Gensler will lead the design enhancements.

The transaction releases approximately $100 million of net proceeds for Mack-Cali, after retirement of financing and transaction costs. The seller plans to use the capital to pay down its unsecured corporate debt during the second quarter.

“This transaction represents yet another significant step toward simplifying our company through the disposition of suburban office properties while generating liquidity to pay down corporate debt and strengthen our balance sheet,” says Mahbod Nia, CEO of Mack-Cali.

A real estate investment trust based in Jersey City, Mack-Cali owns, manages and develops office and multifamily properties in select waterfront and transit-oriented markets throughout New Jersey. The company’s stock price opened at $16.31 per share Wednesday, April 21, up from $14.52 per share one year ago.

Nanuet, N.Y.-based Birch is a privately held commercial real estate investor, owner and operator. Since 2014, the company has expanded its portfolio to more than 3.8 million square feet of value-add office assets.

— Kristin Hiller

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