Lionstone Capital Sells Majority Interest in New Jersey Asset

MCC Blue. Image courtesy of CBRE

Lionstone Capital has sold its majority interest in a Class A office property in Parsippany, N.J., that recently underwent an extensive repositioning.

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CBRE’s Jeff Dunne, Jeremy Neuer, Steve Bardsley, Gene Pride, David Gavin, Travis Langer and Zach McHale arranged the sale. Neuer told Commercial Property Executive that P3 Properties and Image Capital LLC purchased Lionstone’s majority interest in MCC Blue for an undisclosed price.

The 541,035-square-foot Class A office property consists of four buildings and a 600-space parking deck on a 27-acre site. According to Commercial Edge data, MCC Blue was built in 1989 and underwent renovations in 2016 and 2018. MCC Blue now offers 40,000-square-foot floorplates, a 7,500-square-foot fitness center and a cafe.

According to CBRE, the property is 93 percent leased with a strong weighted average lease term and stable cash flow. One of MCC Blue’s anchor tenants is Teva Pharmaceuticals, who relocated its U.S. headquarters from eastern Pennsylvania in 2018. Neuer told CPE that the property is also anchored by Ogilvy Communications.

MCC Blue is located at 400 Interpace Parkway within Morris Corporate Center, which is also home to tenants like UPS, Reckitt Benckiser, Zurich Insurance Group and Sax LLP. In March 2020, P3 Properties also acquired two office buildings within the office park from an affiliate of Brookwood Financial Partners.

Rebrand and reposition

According to P3 Properties, the company acquired MCC Blue from JP Morgan for $60 million in December 2017. P3 Properties said it undertook an aggressive marketing campaign and brought the occupancy from 62 percent to more than 90 percent. The changes also included a renaming to MCC Blue from Morris Corporate Center III, retaining a new leasing team, updating all the existing signage and engaging with the current tenants.

Jeff Dunne, vice chair at CBRE, said in prepared remarks that P3 Properties and Lionstone Capital repositioned MCC Blue for today’s office standards, which led to the long-term lease with Teva Pharmaceuticals. Neuer told CPE that the repositioning included interior and exterior spaces, like the lobby, common areas, parking spaces and more.