New Jersey-based investment firm, Hampshire Companies, has purchased the nearly one-million square feet Prologis Fairfalls Industrial Portfolio in the Garden State.
While no price was announced, experts previously estimated the 28-building package that is scattered throughout the region’s top submarkets in the region of $100 million.
“The portfolio’s high occupancy and tenant retention record speaks to its functionality and desirability within the local market,” said Gary Gabriel, a member of the Cushman & Wakefield Capital Markets Group (CMG) team that handled the deal.
“There was a high level of interest in the portfolio, given its location, size and rent roll diversification. More than 150 investors executed and returned signed confidentiality agreements.”
Gabriel, along with Andrew Merin, David Bernhaut, Brian Whitmer and Kyle Schmidt represented Prologis and procured the buyer.
The team said there was a high level of interest in the portfolio, “given its location, size and rent roll diversification. More than 150 investors executed and returned signed confidentiality agreements.”
According to Kyle Schmidt, “Located in one of the top submarkets in Northern New Jersey, the portfolio consistently outperformed the market with average occupancy rates exceeding 90 percent, even during the depths of the most recent recession.”
Of the 28 buildings in the portfolio, 26 are located in the town of Fairfield and two are situated on adjacent parcels in the town of Little Falls. The portfolio was leased to 57 tenants and has a history of strong tenant retention.
Rob Schmitt, a principal at The Hampshire Companies, said in a statement, “Easy accessibility to the Port of Newark-Elizabeth, Manhattan and Eastern Pennsylvania, coupled with the densely populated and affluent housing available in the northern New Jersey suburbs and time-tested high occupancy, make this a highly sought location which we expect will result in growing rents and value for our investors.
“With substantial local knowledge, our strong asset management team will be able to optimize the financial return and value of these assets.”
At acquisition, the industrial portfolio was 96 percent leased to 57 local and international industrial tenants with long-term leases. Spanning 64 acres in the suburban Essex industrial sub-market, the portfolio offers access to major area highways.
The Northern New Jersey market is characterized by high barriers to entry, a lack of developable land, a product-constrained market and relatively few sales each year.
The market has even fewer portfolio sales, and assemblage is further complicated by aggressive competition for offerings, along with a significant amount of private/family ownership, according to Cushman & Wakefield.
Jones Lang LaSalle was the leasing agent during the transaction. Hampshire has retained the Jones Lang LaSalle leasing team of David Knee, Blake Chroman, Chad Hillyer and Jenna Imperatore as its exclusive leasing agents for the portfolio.
Prologis inherited the Fairfalls properties as part of its merger with AMB Property Corp. in 2011. The REIT is reported to be selling as part of a strategy to focus on larger properties that serve national and international tenants.