Jones Lang LaSalle
BASF finds buyer for Mt. Olive complex
Real-estate investment firm planning a redesign to lure corporate tenants
BY TIM O'REILEY
DAILY RECORD
MOUNT OLIVE -- BASF has sold its former North American headquarters, the largest office building in Morris County, to a real estate investment firm that will try to fill it with several corporate tenants.
The purchase by BPG Properties Ltd., an affiliate of Philadelphia-based conglomerate Berwind Corp., comes more than two years after German chemical giant BASF put it up for sale and later moved out as part of a cost-cutting drive. The price was not disclosed, although Robert Donnelly Jr., part of the team at the brokerage Cushman & Wakefield that handled the deal, said it was less than the $195 million initial asking price.
Township council president Robert Greenbaum said he did not know the exact price but thought it might be less than the assessed valuation of $74.5 million. The site has five connected buildings covering 950,000 square feet, although it has also been listed as 970,000 square feet, parking garages for nearly 2,500 cars and 97 acres of land. According to Donnelly, BASF will retain another 57 adjacent acres that now are vacant and the permits to build about 800,000 square feet more office space there.
BPG has retained an architect to begin mapping out renovations that the campus will require going from one to multiple tenants, including some changes to the lobby and restrooms, addition of a fitness center for employees and a way to separate the four principal office buildings, said Donnelly, an associate director of Cushman & Wakefield's capital markets group at its East Rutherford office. "Overall, the building is in very good condition,"he said, with the first phase completed in 1994 and an addition four years later.
BPG executives could not be reached for comment. The sale was closed Friday and made public Monday.
Perhaps the largest hurdle the project faces is luring major companies to sign leases at a site considered remotes from the major office corridors, notably along Routes 287 and 24 in Morris County. The early marketing of the building was aimed at companies that might want to buy the entire complex for their own use, as Verizon Communications did with AT&T's former headquarters in Basking Ridge, but later shifted to property investors such as BPG.
"One of the problems we have had attracting a business interested in the property is that it is probably 30 miles from the established markets," Greenbaum said.
To counter that, BPG and Cushman & Wakefield will sell the campus as a reverse commute, avoiding the eastbound congestion on Route 80 in the mornings and westbound at night.
Further, said Donnelly, the rental rates will run substantially less than midtown Manhattan, a point that will be pushed at major companies looking to lower their costs by moving large numbers of employees west of the Hudson, but he did not disclose any proposed price. Although Morris County's vacancy percentage rate runs in the low 20s, according the surveys conducted by several major brokerages, blocks of 100,000 square feet or more in top-of-the-scale buildings, known as Class A, has shrunken to a short list.
Completely full, the BASF complex could hold about 3,000 people.
'Very positive'
"Overall, this is a very, very positive event for Mount Olive," Greenbaum said. "Putting tenants back in the building is going to help everyone economically. I am very eager to meet with the new property owner to see what we could do that would benefit both them and the town."
Nearby businesses, such as the Wyndham Garden Hotel across the street, saw their sales suffer as BASF shrank, then departed.
For a decade, BASF has been the town's largest taxpayer, paying $3.5 million last year, according to Morris County Tax Board records. However, reflecting the deterioration of the area's office market in recent years, the assessment was appealed and has been reduced from $160 million in 2002 to $74.5 million now. If the sale price topped that, it would become the new assessed value.
BASF planned and began building the complex in the early 1990s to bring under one roof the people spread across several buildings in Parsippany.
But as the chemical market slowed about five years ago and BASF reined in its aggressive expansion, cost cutting became a major focus to restore profits.
The staff at Mount Olive shrank by more than half from the 2,600 people reported there in 2000, leaving more than half the complex in mothballs. The company decided in March 2004 to put it up for sale, moving about 700 managers to a much smaller office in Florham Park at midyear and then the technology staff to Rockaway.
**********************************************************************************
BPG Properties Ltd. has bought the former North American headquarters of BASF in Mount Olive. At 970,000 square feet, the complex is the largest office building in Morris. Profile: BPG Properties
Background: Part of Philadelphia-based Berwind Corp., which started in coal mining in 1886. As the use of coal began to wane after World War II, the company began to diversify, leasing the operation of mines to others in 1962. Has since diversified into a wide range of industries, including chemical coatings that release medicines over time, Elmer's glue, promotional pens and automotive cleaning chemicals.
Portfolio: Starting in 1980, BPG has amassed ownership in office buildings, warehouses, 90 apartment complexes with 22,000 units, four upscale hotels and shopping centers mainly east of the Mississippi River but stretching as far as California. In New Jersey, investments have been located from Princeton on south, including 1.9 million square feet of offices and warehouses, the Shopping Centers at East Gate in Mt. Laurel and four apartment complexes with 769 units.Ownership: Company is in the hands of the fifth generation of the Berwind family. Since 1993, BPG has raised $1.5 billion from outsiders. BASF building was purchased using some of the funds in a fund with commitments of $550 million.
The property: The BASF complex, renamed Willsbrook at Mt. Olive, covers a total of 970,000 square feet, almost all of it in four connected buildings. The campus covers 97 acres, with parking for nearly 2,500 cars. BASF retains ownership of an adjacent 57 acres.
BASF finds buyer for Mt. Olive complex
Real-estate investment firm planning a redesign to lure corporate tenants
BY TIM O'REILEY
DAILY RECORD
MOUNT OLIVE -- BASF has sold its former North American headquarters, the largest office building in Morris County, to a real estate investment firm that will try to fill it with several corporate tenants.
The purchase by BPG Properties Ltd., an affiliate of Philadelphia-based conglomerate Berwind Corp., comes more than two years after German chemical giant BASF put it up for sale and later moved out as part of a cost-cutting drive. The price was not disclosed, although Robert Donnelly Jr., part of the team at the brokerage Cushman & Wakefield that handled the deal, said it was less than the $195 million initial asking price.
Township council president Robert Greenbaum said he did not know the exact price but thought it might be less than the assessed valuation of $74.5 million. The site has five connected buildings covering 950,000 square feet, although it has also been listed as 970,000 square feet, parking garages for nearly 2,500 cars and 97 acres of land. According to Donnelly, BASF will retain another 57 adjacent acres that now are vacant and the permits to build about 800,000 square feet more office space there.
BPG has retained an architect to begin mapping out renovations that the campus will require going from one to multiple tenants, including some changes to the lobby and restrooms, addition of a fitness center for employees and a way to separate the four principal office buildings, said Donnelly, an associate director of Cushman & Wakefield's capital markets group at its East Rutherford office. "Overall, the building is in very good condition,"he said, with the first phase completed in 1994 and an addition four years later.
BPG executives could not be reached for comment. The sale was closed Friday and made public Monday.
Perhaps the largest hurdle the project faces is luring major companies to sign leases at a site considered remotes from the major office corridors, notably along Routes 287 and 24 in Morris County. The early marketing of the building was aimed at companies that might want to buy the entire complex for their own use, as Verizon Communications did with AT&T's former headquarters in Basking Ridge, but later shifted to property investors such as BPG.
"One of the problems we have had attracting a business interested in the property is that it is probably 30 miles from the established markets," Greenbaum said.
To counter that, BPG and Cushman & Wakefield will sell the campus as a reverse commute, avoiding the eastbound congestion on Route 80 in the mornings and westbound at night.
Further, said Donnelly, the rental rates will run substantially less than midtown Manhattan, a point that will be pushed at major companies looking to lower their costs by moving large numbers of employees west of the Hudson, but he did not disclose any proposed price. Although Morris County's vacancy percentage rate runs in the low 20s, according the surveys conducted by several major brokerages, blocks of 100,000 square feet or more in top-of-the-scale buildings, known as Class A, has shrunken to a short list.
Completely full, the BASF complex could hold about 3,000 people.
'Very positive'
"Overall, this is a very, very positive event for Mount Olive," Greenbaum said. "Putting tenants back in the building is going to help everyone economically. I am very eager to meet with the new property owner to see what we could do that would benefit both them and the town."
Nearby businesses, such as the Wyndham Garden Hotel across the street, saw their sales suffer as BASF shrank, then departed.
For a decade, BASF has been the town's largest taxpayer, paying $3.5 million last year, according to Morris County Tax Board records. However, reflecting the deterioration of the area's office market in recent years, the assessment was appealed and has been reduced from $160 million in 2002 to $74.5 million now. If the sale price topped that, it would become the new assessed value.
BASF planned and began building the complex in the early 1990s to bring under one roof the people spread across several buildings in Parsippany.
But as the chemical market slowed about five years ago and BASF reined in its aggressive expansion, cost cutting became a major focus to restore profits.
The staff at Mount Olive shrank by more than half from the 2,600 people reported there in 2000, leaving more than half the complex in mothballs. The company decided in March 2004 to put it up for sale, moving about 700 managers to a much smaller office in Florham Park at midyear and then the technology staff to Rockaway.
**********************************************************************************
BPG Properties Ltd. has bought the former North American headquarters of BASF in Mount Olive. At 970,000 square feet, the complex is the largest office building in Morris. Profile: BPG Properties
Background: Part of Philadelphia-based Berwind Corp., which started in coal mining in 1886. As the use of coal began to wane after World War II, the company began to diversify, leasing the operation of mines to others in 1962. Has since diversified into a wide range of industries, including chemical coatings that release medicines over time, Elmer's glue, promotional pens and automotive cleaning chemicals.
Portfolio: Starting in 1980, BPG has amassed ownership in office buildings, warehouses, 90 apartment complexes with 22,000 units, four upscale hotels and shopping centers mainly east of the Mississippi River but stretching as far as California. In New Jersey, investments have been located from Princeton on south, including 1.9 million square feet of offices and warehouses, the Shopping Centers at East Gate in Mt. Laurel and four apartment complexes with 769 units.Ownership: Company is in the hands of the fifth generation of the Berwind family. Since 1993, BPG has raised $1.5 billion from outsiders. BASF building was purchased using some of the funds in a fund with commitments of $550 million.
The property: The BASF complex, renamed Willsbrook at Mt. Olive, covers a total of 970,000 square feet, almost all of it in four connected buildings. The campus covers 97 acres, with parking for nearly 2,500 cars. BASF retains ownership of an adjacent 57 acres.
posted by Jones Lang LaSalle NJ News Blog at 9:50 AM
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