Newmark Serves as Strategic Advisor for The Hampshire Companies on a $300M Recapitalization of the Fairfalls Logistics Portfolio

Rhea-AI Summary

Newmark Group, Inc. (Nasdaq: NMRK) has served as a strategic advisor to The Hampshire Companies on a $300 million recapitalization of The Fairfalls Logistics Portfolio and assisted in procuring a joint venture equity partner. The Portfolio comprises 1.35 million square feet of light industrial space across 30 buildings, currently 92% leased. Located primarily in Fairfield, New Jersey, with additional properties in Little Falls, Elmwood Park, and Carteret, the Portfolio offers strategic access to major Northeast corridors.

The transaction highlights include:

• Average building size of 45,000+ square feet
• $14.3 million invested in capital improvements
• Broad zoning capabilities supporting various industrial uses
• Northern New Jersey's industrial market strength, with a 5.3% vacancy rate and average asking rents of $17.01/SF in Q2 2024

Positive

• $300 million recapitalization of a major industrial portfolio
• 92% occupancy rate across 1.35 million square feet of industrial space
• Strategic locations providing access to major Northeast corridors
• $14.3 million invested in capital improvements
• Strong Northern New Jersey industrial market with 5.3% vacancy rate
• 87% increase in average asking rents since end of 2019

Negative

• None.

Financial Analyst

The $300 million recapitalization of the Fairfalls Logistics Portfolio is a significant move in the industrial real estate sector. With a 92% occupancy rate across 1.35 million square feet, this portfolio demonstrates strong demand in the Northern New Jersey market. The 87% increase in average asking rents since 2019 to $17.01/SF indicates robust growth potential.

The strategic location near major highways and ports positions this portfolio for long-term appreciation. The $14.3 million investment in capital improvements suggests a commitment to maintaining asset quality, which should support future rent increases and tenant retention. The low 5.3% vacancy rate in Northern New Jersey, compared to the national average, underscores the market's strength and potential for continued rental growth.

Real Estate Market Analyst

The recapitalization of this industrial portfolio highlights the ongoing investor appetite for well-located, multi-tenant industrial assets. The Northern New Jersey market's strategic importance as a gateway to major population centers and ports cannot be overstated. The portfolio's diverse tenant base across various industries provides resilience against sector-specific downturns.

The average building size of 45,000 square feet caters to a broad range of tenants, offering flexibility in a market where last-mile delivery and e-commerce fulfillment are driving demand. The tight vacancy rate of 5.3% suggests new supply, which bodes well for continued rent growth. This transaction demonstrates confidence in the long-term fundamentals of the industrial sector, particularly in prime logistics locations.

RUTHERFORD, N.J., Aug. 28, 2024 /PRNewswire/ -- Newmark Group, Inc. (Nasdaq: NMRK) ("Newmark" or "the Company"), a leading commercial real estate advisor and service provider to large institutional investors, global corporations, and other owners and occupiers, announces it has served as a strategic advisor to The Hampshire Companies on a $300 million recapitalization of The Fairfalls Logistics Portfolio ("Portfolio") and assisted in procuring a joint venture ("JV") equity partner. The transaction was facilitated by Newmark's Executive Managing Director Kevin Welsh and Global Head of Industrial and Logistics Jack Fraker with Managing Director Brian Schulz.

Currently 92% leased, the Portfolio totals 1.35 million square feet of light industrial space across 30 strategically located buildings with an average building size of 45,000+/- square feet. The Portfolio provides critical mass and operational efficiency within the regional port-centric market, offering unparalleled accessibility to major Northeast corridors and a broad user base. With a large concentration in Fairfield, providing direct access to critical highways such as I-80 and Route 46, the Portfolio also spans Little Falls, Elmwood Park and Carteret, New Jersey.

"The Newmark team is proud to have secured the JV partner on behalf of Hampshire to accommodate the recapitalization of its expansive industrial portfolio," said Welsh. "The new partnership, combined with Hampshire's decade-long stewardship of the Portfolio, will drive near-term value through mark-to-market rental increases and long-term capital appreciation through enhancing the Portfolio's market position."

Highlights of the Portfolio include broad zoning capabilities that support warehousing, manufacturing and light industrial uses, accommodating a diverse range of tenants across various industries and sizes. Additionally, ownership has invested $14.3 million in capital improvements, including new roofs and parking lots, to ensure the properties remain at the forefront of the market.

Northern New Jersey remains a prime location for industrial real estate, benefiting from a deep and dense labor pool, excellent regional highway infrastructure and status as a gateway to the largest metropolitan population base in the country and the ports of New York and New Jersey, the second-largest port complex in the U.S. in terms of annual TEU volume. The region has attracted substantial investment and interest from domestic and international investors. Underpinning its attractiveness are solid real estate fundamentals, with a vacancy rate of 5.3% in 2Q24, over a percentage point tighter than the U.S. average. Average asking rents in the Northern New Jersey industrial market have risen an impressive 87% since the end of 2019, to $17.01/SF at the close of 2Q24 – one of the country's highest industrial asking rent averages. 

About The Hampshire Companies
The Hampshire Companies is a full-service, private real estate investment firm based in Morristown, New Jersey. It is a vibrant, dynamic organization that combines creative vision and superior execution, thereby enabling it to create and enhance value in real estate investments. Additional information on the Hampshire Companies is available online at  www.hampshirere.com. 

About Newmark
Newmark Group, Inc. (Nasdaq: NMRK), together with its subsidiaries ("Newmark"), is a world leader in commercial real estate, seamlessly powering every phase of the property life cycle. Newmark's comprehensive suite of services and products is uniquely tailored to each client, from owners to occupiers, investors to founders, and startups to blue-chip companies. Combining the platform's global reach with market intelligence in both established and emerging property markets, Newmark provides superior service to clients across the industry spectrum. For the year ended December 31, 2023, Newmark generated revenues of approximately $2.5 billion. As of June 30, 2024, Newmark's company-owned offices, together with its business partners, operate from approximately 170 offices with 7,800 professionals around the world. To learn more, visit nmrk.com or follow @newmark.

Discussion of Forward-Looking Statements about Newmark
Statements in this document regarding Newmark that are not historical facts are "forward-looking statements" that involve risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements. These include statements about the Company's business, results, financial position, liquidity, and outlook, which may constitute forward-looking statements and are subject to the risk that the actual impact may differ, possibly materially, from what is currently expected. Except as required by law, Newmark undertakes no obligation to update any forward-looking statements. For a discussion of additional risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see Newmark's Securities and Exchange Commission filings, including, but not limited to, the risk factors and Special Note on Forward-Looking Information set forth in these filings and any updates to such risk factors and Special Note on Forward-Looking Information contained in subsequent reports on Form 10-K, Form 10-Q or Form 8-K.

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SOURCE Newmark Group, Inc.

FAQ

What is the size and occupancy rate of The Fairfalls Logistics Portfolio advised by Newmark (NMRK)?

The Fairfalls Logistics Portfolio totals 1.35 million square feet of light industrial space across 30 buildings and is currently 92% leased.

How much was the recapitalization of The Fairfalls Logistics Portfolio worth in the Newmark (NMRK) advised deal?

Newmark advised on a $300 million recapitalization of The Fairfalls Logistics Portfolio for The Hampshire Companies.

What is the average asking rent for industrial space in Northern New Jersey as of Q2 2024, according to Newmark (NMRK)?

According to Newmark, the average asking rent for industrial space in Northern New Jersey was $17.01/SF at the close of Q2 2024.

How much has The Hampshire Companies invested in capital improvements for the portfolio advised by Newmark (NMRK)?

The Hampshire Companies has invested $14.3 million in capital improvements for the portfolio, including new roofs and parking lots.