Cushman & Wakefield, Inc. reports increase in activity. (New Jersey).

Against the backdrop of a difficult office leasing market, the metropolitan area financial services group Cushman & Wakefield, Inc. announced the completion of two of the largest office sales in the state. The Morris County transactions in Florham Park and Parsippany totaled approximately $150 million and, in both cases, were funded by overseas equity capital.

"In spite of the challenges in the leasing market, we were able to generate significant interest in both properties," noted Andrew Merin, executive vice president and head of FSG.

"In a trend that we see evolving for the highest quality real estate, both properties were acquired by foreign investors."

In Florham Park, Cushman & Wakefield's FSG arranged the sale of three buildings within the 150-acre Rockefeller Group Corporate Park on Park Ave. Investcorp purchased the properties, which total 610,000 SF of office space. FSG represented the seller and procured the buyer in the transaction.

Two of the buildings, totaling 385,000 SF, are fully leased to AT&T on a long-term basis. The third, a newly constructed structure, is 75% occupied on a long-term basis by Novartis.

In Parsippany, an overseas client, advised by Lend Lease Real Estate Investments and HypoVereinsbank, purchased 200 Kimble Drive from JPMorgan Special Situation Property Fund, a commingled pension trust fund managed by JPMorgan Fleming Asset Management. Cushman & Wakefield's FSG represented the seller and procured the buyer in the transaction.

The Gale Company developed 200 Kimble Drive for JPMorgan Fleming, finishing construction in early 2002. The 175,000 SF, granite-clad building sits at the intersection of Interstates 80 and 287. The property is 85% leased to Novartis on a long-term basis; a law firm occupies the majority of the remaining space.

"200 Kimble Drive is among one of the best class 'A' office properties in New Jersey," noted Gary Gabriel, a senior director with FSG. "The offering attracted a great deal of interest and multiple bidders, due to the property's appeal and its status within the market."

The strength of the investor market belies leasing trends in the northern New Jersey market, according to Merin. At the end of the third quarter of 2002, Morris county's overall vacancy rate was 21.3% -- the highest in northern New Jersey -- and year-to-date absorption was negative 425,017 SF, according to Cushman & Wakefield research services.

"Although today's commercial real estate market fundamentals are weak, a high level of investor demand continues for well-located, stabilized properties like Rockefeller Group Corporate Park and 200 Kimble Drive," Merin said.

"There has been a surge of capital into the real estate market from institutional owners and developers, reflecting the continuing shift from the stock market to tangible investments."