Verizon has sold and leased back its New Jersey operations center in a $650 million deal that shatters the sector record.
Cushman & Wakefield announced the deal this morning, noting that Mesirow Realty Sale-Leaseback, Inc., a division of Mesirow Financial, a financial services firm headquartered in Chicago, bought the 1.4 million square foot Basking Ridge, NJ, facility for $605.3 million.
As part of the transaction, Verizon will lease back the entire facility from Mesirow for a 20-year term. The campus houses 3,900 full-time employees and a full range of businesses within Verizon Communications and the company’s wireless unit.
The deal represents the largest sale-leaseback ever completed in suburban New Jersey and one of the highest sales prices per square foot of any suburban sale-leaseback in the United States.
“We delivered an execution that optimized financing terms for the purchaser through a carefully crafted, credit tenant lease,” said Cushman & Wakefield executive vice president Michael Rotchford, head of corporate finance and investment banking for the firm. “This structure successfully delivers current and long-term value for both Verizon and Mesirow.”
“This real estate deal provides our company with immediate financial benefits and allows us to extract significant value from this asset while continuing to occupy the entirety of its office space,” said John M. Vazquez, senior vice president and head of global real estate for Verizon. “Cushman & Wakefield achieved our strategic objectives by maximizing value and flexibility through the best possible deal structure.”
The Cushman & Wakefield team was led by its real estate investment banking group in combination with the company’s New York brokerage and New Jersey investment sales teams.
“Cushman & Wakefield works closely with the outstanding team of professionals at Verizon to help the company meet its real estate-related goals,” said executive vice chairman Josh Kuriloff of Cushman & Wakefield’s New York brokerage unit. “Thanks to our ability to partner with Verizon, we efficiently execute transactions that serve the company’s strategic priorities.”
Led by Rotchford, the Cushman & Wakefield investment banking team included David Wenk, Robert Elms and Mark Todrys. They worked in conjunction with both Mr. Kuriloff and with David Bernhaut, vice chairman of the Cushman & Wakefield capital markets group in New Jersey. Cushman & Wakefield maintains its relationship with Verizon through its Corporate Occupier and Investor Services (CIS) group.
The Verizon team was led by Vazquez and included James Tousignant and Robert Haines, as well as internal Verizon counsel Steven Cohen. DLA Piper served as counsel for Verizon under the leadership of Marc Hurel.
Mesirow Realty Sale-Leaseback, Inc. was led by Garry Cohen and Douglas Barker with legal representation by Goldberg Kohn.
After acquiring the headquarters in 2005, Verizon made a significant investment undertaking an extensive upgrade to create a world-class headquarters.