- What An apartment building and a medical-office building are up for sale in Northern New Jersey
- Why The properties are being marketed separately, but the owners would consider portfolio bids
- What next Bids for the multifamily property are expected to come in around US$105 million
A Brookfield partnership is shopping a newer apartment building in Northern New Jersey and an adjacent medical-office building.
On the block is a 200-unit rental property known as Two South Willow, and a 41,000-sf office building that is fully leased to a health system. Both are in a redeveloped section of tony Montclair’s central business district that includes a well-known theater.
Bids for the rentals, which are more than 95% occupied, are expected to come in around US$105m ($145m), or US$525,000/unit. At that price, a buyer’s initial annual yield would be roughly 5%. The office space is thought to be worth about US$25 million, or US$610/sf.
The properties were developed by Brookfield and Ironstate, a builder based in Hoboken, N.J. While they are being marketed separately, the owners would consider portfolio bids. CBRE has the sales assignments.
2 Willow Street
The six-story apartment building, at 2 South Willow Street, was developed in 2021 and includes 38,000 sf of street-level retail space that is 94% occupied. Apartments range from studios to two bedrooms, with rents on an available studio listed at $2,225.
Interiors have open floor plans and stainless-steel appliances. Amenities include a roof deck with firepits, grills and a shuffleboard court, a fitness center and a study with a fireplace.
The sales pitch is touting stability and upside at the property, which has seen 7.4% increases on leases that have traded out since January. In addition, the building has maintained an average occupancy of 96% since stabilizing the year it opened.
Some market pros are watching the apartment listing closely, as it comes on the heels of one of the state’s biggest multifamily trades in years. Hines in June paid US$221.5 million for 408 units in two Jersey City rental towers. The 255-unit Lenox and the 153-unit Quinn were sold by JPMorgan Asset Management. Both are more than 95% occupied and are a few blocks from the Hudson River waterfront.
CBRE also brokered that deal, in which Hines will realize a roughly 5.3% capitalization rate in the first year. The value breakdown between the two buildings is unclear, but the purchase is the largest multifamily transaction in Northern New Jersey since December 2020, when the 1,224-unit Overlook at Flanders sold for $235 million, according to Green Street’s Sales Comps Database.
For the Montclair apartments, bidders also are being told that there are 26-plus years left on a payment-in-lieu-of-taxes agreement with the local government.
1 Seymour Street
That agreement also applies to the medical-office building, which is next door at 1 Seymour Street. Its sole tenant is Summit Health, whose lease runs through September 2037. The space is on two floors, and contains 63 exam rooms and a pediatric suite with separate sick-visit and newborn waiting rooms.
The property also includes a five-story parking garage with 236 metered spaces. The health system has invested US$4 million in the building, along with US$2.5 million the owners set aside for tenant improvements, according to marketing materials.
The apartments and medical space are part of what’s known locally as the Seymour Street Redevelopment, which includes the 2,500-seat Wellmont Theater and a large redesigned public plaza for local events. The properties are near two NJ Transit train stations connecting to Midtown Manhattan, 13 miles east.
Montclair is one of New Jersey’s richest towns, with top-rated schools and an average annual household income of more than US$222,000.
