Vision Properties has closed a circa $76m, 10-year loan with GE Capital Real Estate to finance its $108.7m acquisition of the Metropolitan Center at One Meadowlands Plaza in East Rutherford, New Jersey.
The firm purchased the 15-storey LEED Gold office tower, with an unnamed capital partner, from a real state investment trust run by KBS Capital Markets Group, which had a fast-approaching 30 June deadline to sell the property.
The time crunch made GE an easy choice for the financing, said Fred Arena, founder and CEO of Vision Properties, who has worked with the lender on multiple deals this year.
“We knew we had a line with a group that could do it quickly and that was vital to this deal,” he said. “We had a short due diligence and a short close in order to get this deal done so we had to expedite everything and really hit on all cylinders.”
Arena said the 70% loan-to-value ratio is typical of Vision’s core purchases today, driven by a strong market with low interest rates.
The building is located near the Meadowlands Sports Complex, which includes the MetLife Stadium, home to the National Football League’s New York Giants and New York Jets; and the American Dream Meadowlands, a 1.7 million-square-foot retail complex with an additional million square feet of slated amusement park space.
“We thought this was the best building in the Meadowlands,” said Arena, noting that his firm targets “core-plus quality” assets of the sort to complement value-add opportunities in the same markets.
The building is fully leased, with tenants including insurance firm AEGIS, with 93,000 sq ft; Hudson News with 61,448 sq ft; and retailer Michael Kors, with 43,336 sq ft. The average lease has about seven years remaining, according to CBRE, which brokered the sale of the building on behalf of the seller.
With average rents in the submarket still fetching in the low $30s per square foot and continued market growth expected, Arena anticipates significant upside in rents. “We’re not buying at the high end of the market so we feel good about that,” he said.
Brian Nowakowski of GE facilitated the loan, in addition to five others previously arranged for Arena and his companies, including a $75m loan for a Class A tower in Atlanta, Georgia and two $30m loans in New Jersey. Arena co-founded Vision Equities about eight years ago, splitting off about 14 months ago to form Vision Properties and Arena Capital Group.