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Teterboro Amazon Distribution Center Sells for $147.1 Million

Deal Ranks Among New Jersey's Biggest Industrial Sales So Far in 2018
August 20, 2018
Pictured: 698 Route 46, Teterboro, New Jersey.


In what appears to be the biggest industrial deal so far this year in New Jersey, a large Amazon distribution center in the Meadowlands region has sold for $147.1 million, a more than 80 percent increase from its $81 million price tag just five years ago.

The sale of the 616,992-square-foot facility at 698 Route 46, Teterboro, New Jersey, demonstrates the strength of the Garden State’s industrial market, which experts say is fueled in good part by demand from e-commerce firms like Amazon. The overall industrial vacancy rate in Northern New Jersey was 4.4 percent in the second quarter of this year, the lowest rate of the past decade, according to CoStar data.

The property located on 27 acres was sold by Teachers Insurance & Annuity Association, a pension fund known as TIAA, to Goodman North America, based in Irvine, California. The net sale price of the transaction that closed on July 27 was $147.1 million, TIAA reported earlier this month in its 10-Q filing with the U.S. Securities and Exchange Commission. That translates to roughly $242 per square foot.

Goodman North America is part of the Goodman Group in Australia, a global logistics and warehouse developer and owner.

TIAA bought the building, long known as the Mohawk Distribution Center, in June 2013 for $81 million, or about $131 a square foot, from RREEF Management LLC, according to CoStar data. Under TIAA’s ownership, Amazon became a tenant after signing a lease for the entire building in July 2016, with 600 employees at the site, according to CoStar. That lease expires in January 2027.

Amazon has established a solid real estate portfolio in New Jersey, with distribution centers in both the Meadowlands and South Jersey.

Based on CoStar data, the $147.1 million trade is the largest sale of a single industrial building in New Jersey this year to date. In the largest industrial sale of last year, Bridge Development Partners sold the Federal and High Street portfolio in Carteret, New Jersey, to Duke Realty Corp. for $256.4 million. Also last year, Clarion Partners bought Cranbury Station Park from Alfieri LLC for $168.5 million, according to CoStar.

Andrew Somple is a broker with the real estate firm NAI James E. Hanson, which just relocated from Hackensack, New Jersey, to a building in Teterboro not far from the Amazon distribution center that just sold for the record price.

"The value of the property has been enhanced obviously by the tenancy," Somple said. "You’re buying the tenant."

The warehouse is also one of a few of its size in the region, and is just 10 minutes from the George Washington Bridge and Manhattan, adding to its value, according to Somple. He also noted that price of the property, which has traded four times since 2002, has soared from the $31.7 million to $147.1 million.

"To increase five times: Wow," Somple said.

The property on Route 46 for years has served as a distribution center for the flooring company Mohawk Industries Inc., whose lease expired in 2015. Before Mohawk, the site served as a parts distribution center for automaker Ford Motor Co.

Broker Cushman & Wakefield, whose New Jersey operations are based in East Rutherford, was the listing broker for TIAA. In a press release Friday it didn’t disclose the sale price of the property or say that Amazon was its tenant. The release just said "the property is fully net-leased to an investment grade tenant," and quoted Cushman & Wakefield Vice Chairman Gary Gabriel.

"This was an outstanding match for an institutional investor seeking a core industrial investment," Gabriel said in a statement, describing the property as "a bullet-proof location for final-mile solutions ... and fundamentals have surged in the Meadowlands."

The Meadowlands has many "small, 50-plus-year-old industrial buildings," the Class A property 698 Route 46 "is one of only two buildings greater than 400,000 square feet within that subset,'' Cushman & Wakefield's Kyle Schmidt said in a statement.

For the record: The seller was represented by Cushman & Wakefield Vice Chairman Gary Gabriel, who led the investment sales team assignment with Adam Spies, Andrew Merin, David Bernhaut, Marcella Fasulo, Kyle Schmidt, and Ryan Larkin, assisted by Jason Goldman from Cushman & Wakefield’s leasing team.


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