The basics:
- Axria Inc. acquires Somerset County office building in Franklin Township
- Four-story building, fully vacant building served as former Philips Electronics HQ
- Property offers flexible commercial zoning: office, medical, education, light industrial
- JLL represented the seller and facilitated the transaction
Amid a tightening market for desirable spaces, JLL completed the sale of a 200,000-square-foot headquarters-quality office property in Somerset County.
Axria Inc. acquired 200 Franklin Square in Franklin Township in a deal arranged by the global real estate services firm. According to the Sept. 29 announcement, JLL represented the unnamed seller and procured the buyer. Financial terms were not disclosed.
The property is full of potential. Completely vacant at the time of sale, the four-story building was renovated in 2016, JLL said — with more updates due. The firm identified the space as the former headquarters of Philips Electronics.
Based in Piscataway, vertically integrated real estate development firm Axria has been in business for over half a century. Situated on more than 12 acres, the Franklin Township property the firm acquired offers direct access to Interstate 287. Additionally, it is near I-78 and the New Jersey Turnpike.
200 Franklin Square is zoned for a range of commercial uses beyond office, including medical, educational and light industrial, JLL said. That offers Axria more flexibility as it gets to work at the property.
A ‘unique’ opportunity
Senior Managing Directors Jose Cruz and Jeremy Neuer, Senior Director Ryan Robertson, and Managing Directors Nicholas Stefans and Jason Lundy led the JLL Capital Markets Investment Sales and Advisory team representing the seller.
“This opportunity was unique as a former headquarters, but also a blank canvas with numerous possibilities for future use,” Cruz said. “We are bullish on Axria’s business plan going forward.”
Neuer also noted the demand 200 Franklin Square elicited due to its quality and location. “Given the redevelopment of over 1 million square feet of office to industrial, the shrinking market has created a lack of supply for true Class A office in Franklin Township and the surrounding towns,” he said.
Expanding ranks
Last week, JLL announced a new addition to its New Jersey brokerage team.
Naoi Yamaguchi joins as vice president, bringing 20 years’ industry experience to the role. He will work to broaden JLL’s service offerings, deliver client value and strategically attract new business opportunities, according to the firm.
A tenant representation specialist, the new hire has cultivated relationships with 160-plus multinational firms establishing operations in New Jersey. Most recently, he served as vice president of Relo Redac Inc.‘s Commercial Real Estate Division.
“His ability to leverage deep client relationships will be a tremendous asset as we continue our strategic growth across the region,” said Tim Greiner, executive managing director and JLL’s New Jersey brokerage lead.
A native of Japan, the executive has particular prowess with assisting international companies establish operations in New Jersey.
“I’m truly excited to join JLL, a global firm with a reputation for intelligent, forward-thinking brokers who collaborate to deliver great results,” Yamaguchi said. “The move will give me the opportunity to do even more for my clients, offering a higher level of service while tapping into JLL’s unmatched resources and network to help them grow and succeed.”
Yamaguchi is based in JLL’s East Rutherford office.
According to Axria CEO Chandra Mandalapu, the company intends to redevelop the property to its “highest and best-use, creating significant value for the market.”
In its second quarter office report, JLL reported 85% of absorption for the period was concentrated in the Class A market.
“Flight-to-quality migration will remain a leading theme of the state’s office market as tenants shed outdated workspaces and relocate into newly constructed or recently renovated buildings offering premium amenities,” the study noted.
Somerset office opportunity
“We see tremendous opportunity ahead,” Mandalapu said, adding the team is actively working on the upgrades.
Axria Principal Adi Mokkapati directed the transaction, JLL said.
According to the company’s website, it has completed more than 100 projects. Worth over $1 billion in value, the company has developed upwards of 10 million square feet. Axria says it has more than $100 million in assets under management. The company’s portfolio covers retail, office, mixed-use, industrial and residential spaces with a strong presence in News Jersey, Pennsylvania and New York.
“This investment presents a unique redevelopment opportunity to reposition an underutilized office building in a highly sought-after New Jersey submarket with limited available land,” Mokkapati said.
