Key Takeaways
- • KBS Real Estate Investment Trust II closed a $311 million sale of Park Avenue at Morris County, a six-building, 1.19 million-square-foot office campus in Florham Park, New Jersey, to a private buyer.
- • The property achieved 89% occupancy at the time of sale following a multiyear, multimillion-dollar capital improvement program that included mechanical system upgrades, amenities (soccer field, car wash), and tenant-focused service offerings.
- • The transaction reflects strong tenant retention and demand in Northern New Jersey's suburban office market, with an average lease term of 10 years indicating high tenant satisfaction.
- • CBRE arranged the sale, with Jeffrey Dunne and Jeremy Neuer representing KBS and identifying the buyer; the deal marks KBS's exit after more than a decade of ownership and value-add operations.
- • The sale signals institutional appetite for stabilized, fully-amenitized Class A office properties in secondary markets with demonstrated absorption and long-term tenant commitments.
Summary
KBS, the Newport Beach, California-based private equity real estate firm, announced the $311 million sale of Park Avenue at Morris County, a premier Northern New Jersey office campus, on Tuesday. The transaction closed through KBS Real Estate Investment Trust II (a non-traded REIT), with the property acquired by a private buyer. CBRE brokered the transaction, with Vice Chairman Jeffrey Dunne and Jeremy Neuer representing KBS while simultaneously procuring the buyer.
The Park Avenue at Morris County campus consists of six Class A office buildings spanning approximately 1.19 million square feet across 135 acres, strategically located off Route 24 and the Columbia Turnpike in Florham Park. KBS had acquired the complex in two phases more than a decade prior and executed a comprehensive capital improvement program during its hold period. These enhancements included new mechanical systems, on-site amenities, and tenant services designed to support workforce recruitment and retention in a competitive suburban market. The renovation initiative successfully brought occupancy to 89% at the time of sale.
The property demonstrated strong fundamentals supporting the sale valuation. The average lease term for tenants reached 10 years, a metric that CBRE highlighted as evidence of high tenant satisfaction with both the physical space and landlord services. This extended commitment period indicates stable, predictable cash flow characteristics attractive to institutional and private buyers. Dunne characterized the acquisition and subsequent value creation as a success story driven by strong regional absorption and sustained tenant demand for well-maintained, amenity-rich suburban office space in Northern New Jersey.
Marc DeLuca, KBS's regional president for the Eastern U.S., emphasized the firm's operational philosophy, stating that its business objectives align with tenant needs through delivery of onsite conveniences and services that help companies attract and retain talent. The exit from this stabilized asset represents a capital deployment cycle success for the REIT, converting a repositioned suburban office campus into liquid proceeds following a multiyear improvement and leasing initiative.
The Park Avenue at Morris County campus consists of six Class A office buildings spanning approximately 1.19 million square feet across 135 acres, strategically located off Route 24 and the Columbia Turnpike in Florham Park. KBS had acquired the complex in two phases more than a decade prior and executed a comprehensive capital improvement program during its hold period. These enhancements included new mechanical systems, on-site amenities, and tenant services designed to support workforce recruitment and retention in a competitive suburban market. The renovation initiative successfully brought occupancy to 89% at the time of sale.
The property demonstrated strong fundamentals supporting the sale valuation. The average lease term for tenants reached 10 years, a metric that CBRE highlighted as evidence of high tenant satisfaction with both the physical space and landlord services. This extended commitment period indicates stable, predictable cash flow characteristics attractive to institutional and private buyers. Dunne characterized the acquisition and subsequent value creation as a success story driven by strong regional absorption and sustained tenant demand for well-maintained, amenity-rich suburban office space in Northern New Jersey.
Marc DeLuca, KBS's regional president for the Eastern U.S., emphasized the firm's operational philosophy, stating that its business objectives align with tenant needs through delivery of onsite conveniences and services that help companies attract and retain talent. The exit from this stabilized asset represents a capital deployment cycle success for the REIT, converting a repositioned suburban office campus into liquid proceeds following a multiyear improvement and leasing initiative.
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