399 Jefferson Success Story Culminates With Recapitalization
PARSIPPANY, N.J., March 17, 2014 - The recapitalization of 399 Jefferson Road in Parsippany this winter marks the culmination of a property success story - 10 years in the making - for Prism Capital Partners, LLC. The transaction brought in Criterion Holdings, LLC, as an investment partner for the fully leased, 206,000-square-foot Class A office property.
Prism initially acquired 399 Jefferson Road in 2003 as its first investment, subsequently sold it to a user and re-acquired it as a vacant asset in 2010. Pinnacle Foods leased space for its headquarters in 2011 and subsequently expanded its occupancy to a total of 104,000 square feet there. Its space, which Prism fit out, was named as Inc. Magazine Editor's Pick for World's Coolest Office.
In November 2012, EBI, LLC, a subsidiary of Biomet Spine & Bone Healing Technologies, signed a 102,000-square-foot lease, bringing the existing, 178,000-square-foot building to full occupancy and launching a 28,000-square-foot expansion. That transaction, in conjunction with two property dispositions involving Biomet, was recognized by NAIOP New Jersey as Creative Deal of the Year.
"We have added tremendous value at 399 Jefferson through the lease-up and expansion," noted Prism's Eugene Diaz, principal partner. "Now we have taken advantage of the opportunity to replace a shorter-term, opportunistic capital source with a longer-term, stabilized cashflow partner. Criterion Holdings and its management are highly recognized and respected in the New Jersey market. This is a win-win for everyone involved. We are proud to continue as operating partner for this property, which remains a flagship in our portfolio."
James "Jamie" Riordan, managing member of Criterion Holdings, noted that Prism's strong history in the Parsippany market was central in attracting his firm. "Prism has been instrumental in the resurgence of this submarket," he noted. "With 399 Jefferson, the firm has established a truly Class A product occupied by growth-oriented tenants. We look forward to being part of the property's continued success." Simultaneous to the recapitalization, Riordan stepped down from his position as interim COO for GLP Development Company. Previously, he was a Lubert-Adler principal for 12 years following time with LaSalle Investment Management in Chicago.
Cushman & Wakefield's Metropolitan Area Capital Markets Group - headed by Andrew Merin, David Bernhaut, Gary Gabriel, Brian Whitmer and Kyle Schmidt - arranged the partnership between Prism and Criterion; CBRE's Jim Gunning orchestrated the financing.
"399 Jefferson received a strong response from the investment community, which was attracted to both the asset and tenancy," Gabriel noted. "The uniqueness of no loss factor, 5/1,000 parking, an abundance of natural light, and 24/7 space access with identity, caters precisely to what tenants are seeking in a suburban office building today. Additionally, Morris County remains a desirable and highly liquid investment market, thanks to its diversified economic base that includes large tenants in the pharmaceutical, healthcare services and financial services industries."
Based in East Rutherford, N.J., Cushman & Wakefield's Metropolitan Area Capital Markets Group has completed more than $17 billion worth of regional investment transactions since 2000, closing on $1.5 billion in 2013.