Two North Jersey commercial properties sales were announced in the past week, each for millions of dollars — an office building in Montvale and a warehouse in Florham Park — despite the reduced demand for office space with a still higher-than-normal percentage of people who work from home after the COVID pandemic, and despite a glut of warehouse space in the region.
The first property, with 29,898 square feet of office space at 20 Craig Road in Montvale, sold for $5.75 million and is occupied by Jura, a company that sells Swiss automatic coffeemakers, said commercial real estate services firm Cushman & Wakefield, which arranged the deal.
Mountain Development Corp. had owned the property since 2012 and sold it to Fortune Touch, according to property records and the Cushman & Wakefield announcement.
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The sale of the Montvale office building “demonstrates the continued investor appetite for well-located, single-tenant office assets with strong credit tenants,” said Cushman & Wakefield executive Jordan Sobal, based in Morristown.
“From a buyer’s perspective, single-tenant buildings are attractive because there are fewer operating costs for the owner,” with tenants paying all the expenses, said Mateusz Wnek, associate director of market analytics for the CoStar Group, where he covers the North Jersey market.
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In addition, “there’s just one lease agreement to administer, and there’s income predictability, since they are usually 10- to 20-year long-term commitments,” he said. “There are also drawbacks, of course, but if it’s a strong credit tenant with term remaining on the lease, then it makes for a less risky play.”
“The Montvale asset was marketed as a stabilized investment opportunity given there’s still five years left on the current tenant’s term,” Wnek said. “That offers the buyer stability.”
A second property that recently sold is a warehouse at 5 Vreeland Road in Florham Park, for $9.25 million, to real estate management firm Faropoint, said an announcement by commercial real estate services firm CBRE, which arranged the deal.
CBRE is currently tasked with marketing the warehouse — which had been occupied by the previous owners, Tropar Manufacturing — to a new tenant, the real estate firm said.
The property presents a “unique opportunity” for a warehouse user or investor, said Saddle Brook-based Tom Mallaney, first vice president at CBRE.