JLL Income Property Trust, a non-traded daily net asset value real estate investment trust, has purchased 170 Park Avenue, a 147,000-square-foot life sciences building in Florham Park, New Jersey, for approximately $47 million.
The property is net-leased on a long-term basis as laboratory space and the corporate headquarters for Celularity Inc., a clinical-stage biotechnology company. The lease term is for 15 years and provides for an average of 2.5 percent annual rent increases.
“Within the office sector our priority investments are healthcare oriented, focusing on medical office and life science properties,” said Allan Swaringen, president and chief executive officer of JLL Income Property Trust. “In a post-COVID environment of eroding fundamentals for traditional multi-tenant office properties, these two healthcare-oriented sectors stand out for their lower vacancy rates, healthy net absorption and balanced new supply due to significant barriers to entry because of higher construction and tenant improvement costs. These factors also lead to higher tenant retention even during periods of weakness within traditional office market environments.”
Swaringen added that 170 Park Avenue was purchased “significantly below replacement cost” with tenant and prior owner-funded improvements to the building in excess of $80 million.
170 Park Avenue is located on more than 18 acres in The Green at Florham Park, a 270-acre master planned mixed-use office park, which includes tenants such as BASF’s North American Headquarters and the New York Jets headquarters and training facility.
This investment is the REIT’s second acquisition in the healthcare sector in this market following its 2016 purchase of 140 Park Avenue, a newly constructed 100,000-square-foot medical office building leased on a long-term basis to Summit Medical Group, New Jersey’s largest multi-specialty doctor practice group.
This acquisition increases JLL Income Property Trust’s healthcare allocation to five properties totaling more than 450,000 square feet, valued in excess of $215 million and representing approximately 7 percent of its overall portfolio.
JLL Income Property Trust (NASDAQ: ZIPTAX; ZIPTMX; ZIPIAX; ZIPIMX) owns and manages a $3.5 billion portfolio of 85 properties, including apartment, industrial, office and retail assets located in the United States. The REIT has raised approximately $2 billion through its ongoing public and various private offerings, as well as its distribution reinvestment plan.