Editor’s note: Because of a production error, this story did not appear in its entirety in the print edition of The Observer. Below is the entire story.
KEARNY —Nearly two years after it opened, the Kearny Square Mall on Passaic Avenue — anchored by BJ’s Wholesale Club — has been sold.
Cushman & Wakefield, a Chicago-based global real estate services firm, recently announced the 139,000-square-foot retail center, spread over a 10-27-acre site at 160-194 Passaic Ave., has been acquired by Benthall Kennedy, a Sun Life Investment Management Co.
Asked his reaction, Mayor Alberto Santos said this “is a sale to a national real estate investment trust. I think it shows a very hot real estate investment market. How much of it is interest-rate driven and how much of it reflects increasing demand in the West Hudson region is unclear.”
No price for the transaction was listed. Neither the buyer nor the seller — DVL Holdings LLC of New York — would provide that information.
“Having conferred with my colleagues who participated in the acquisition and who directly serve the interests of our client base of investors, we have taken the decision not to offer public comment on the matter,” said Benthall Kennedy spokesman Rahim Ladha.
And Alan Casnoff, president/CEO of DVL Holdings, said both parties “agreed not to do that.” He gave no reason.
Ultimately, when a title deed is registered with the county, the price will be a matter of public record.
Town records show the property is currently assessed at $8,383,900 and generates annual taxes of $897,496.50. (As reckoned by town tax assessor John Peneda, the land and improvements have a “market value” of $29,479,250 but one commercial appraiser familiar with the site speculated that the actual sale price could be much higher.)
Asked the reason for the sale, Casnoff said: “We’re developers — that’s what developers do. Sell [a developed property] and move on to something else.” He didn’t mention any other area sites DVL might be looking to acquire.
Casnoff said DVL — which has owned commercially-developed land on the west side of Passaic Avenue since the 1960s — would continue to hold onto the site at 200 Passaic Ave. Kmart has what Casnoff described as a “long-term lease.”
Casnoff said Cushman & Wakefield was asked to conduct a “bidding process” for the Kearny Square property and “a lot” of firms participated. He didn’t name them but the C&W release noted that the sale drew “a significant amount of interest from regional and national institutional and private buyers.”
The buyer “was impressed by what’s been happening in Kearny and by the quality tenants at Kearny Square that are well-known companies on the American scene,” Casnoff added.
No question, C&W said, those “nationally-recognized” mall tenants “consisting of fast-casual eateries and personal well-being services, as well as a wholesale club with a grocer, makes Kearny Square uniquely resistant to e-commerce competition.”
Andy Merin, a member of C&W Rutherford-based sales team that set up the offering, said other factors that triggered buyer interest were the property’s location in Kearny’s redevelopment area and Urban Enterprise Zone “that offers a variety of sales and use tax exemptions and other incentives …” plus its proximity to a 280-unit residential development now under construction that will likely “bring in additional young professionals and other consumers.”
“The urban infill location of Kearny Square is a perfect fit,” said Brian Whitmer, another sales team member. “The immediate area has a dense and growing population but has lacked retail services and amenities. Kearny Square fulfills this need and is positioned for long-term success as it continues to service this rapidly-growing community.”
Another attribute that attracted the buyer, according to sales team member Frank DiTommaso II, was the “superior quality of this property and the long-term growth potential of the area ….”
DVL’s Casnoff credited the town administration with having been “responsive and open and trying to get things accomplished” during the period leading to construction of Kearny Square.
Still, that hasn’t stopped DVL from filing a tax appeal this year for the property. Fairfield attorney Bruce Stavitsky is handling the case for DVL. That appeal is pending in state tax court, Peneda said.