The Birch Group racked up one of the biggest office sales in North Jersey last year with its $255 million acquisition from what was then known as Mack-Cali Realty, now called Veris Residential. The deal marked part of Birch's roughly $1.1 billion office buying spree in the tri-state area, even as the pandemic dragged on, acquiring many buildings from Veris.
The property: An 843,300-square-foot portfolio of four office buildings in the Shorts Hills section of Millburn, New Jersey, located at 51, 101, 103 and 150 John F. Kennedy Parkway.
The brokers: The Cushman & Wakefield capital markets team including David Bernhaut, Andy Merin, Gary Gabriel, Frank DiTommaso and Seth Zuidema, in conjunction with Adam Spies and Kevin Donner, represented Veris.
The deal: Mark Meisner, Birch’s founder and president, made a big bet that Class A suburban office buildings would see a rise in demand, as companies looked to accommodate employees who didn’t want to commute on a daily basis to workplaces in New York City anymore. His strategy is to revamp and reposition Birch’s newly acquired office properties to make them appealing and competitive to attract tenants, even those from Manhattan.
Why it matters: Birch’s series of acquisitions from Veris represented a huge vote of confidence for the Northern New Jersey office market. That sector had suffered over recent years even before the pandemic, when isolated corporate campuses far away from downtown business districts fell out of favor with millennials and the companies that wanted to hire them.
Downtown walkability: The quartet of buildings that Birch acquired had already undergone improvements, but Meisner and his company are investing in additional upgrades. Birch is trying to forge a connected-campus feel as well as walkability “to create that downtown setting” among the Short Hills buildings, he said. Birch has already branded the properties as The Collection at Short Hills. Part of the strategy is to add walking paths from the office properties to the nearby upscale Mall at Short Hills, a popular shopping and restaurant destination. “This is really about connectivity between the four office buildings and the amenities in the area,” which also include a hotel and golf course, Meisner said.
What they’re saying: Meisner sees Birch as a successor to the old Mack-Cali, replacing it as the major office landlord in New Jersey. That’s all in the wake of that Jersey City, New Jersey-based real estate investment trust shedding its office properties to focus on residential. Birch’s big project, with its newly purchased Short Hills portfolio, is to find a new tenant for 103 JFK Parkway, the 123,000-square-foot headquarters that data and analytics firm Dun & Bradstreet is vacating to move to Jacksonville, Florida. Design firm Gensler was retained “to create that vision of what that building can be,” as well as working on updating the rest of The Collection at Short Hills, according to Meisner.
Fun fact: Short Hills is the wealthiest town in New Jersey, home to 35% of the state’s billionaires, according to Birch.
CoStar’s Impact Awards highlight the commercial real estate transactions and projects that have transformed their markets over the past year. The winners are chosen by independent panels of industry professionals who work in the markets they judge. A list of judges can be found here and the criteria for selecting winners can be found here.