Rugby Realty has acquired office building Three Gateway Center in Newark, N.J. with $35 million from American Realty Capital, a source told Mortgage Observer.
Rugby paid $42 million for the 579,000-square-foot building, the source said. NJBiz.com previously reported the sale, but did not provide the financial terms of the deal. The seller was New York-based developer and investor Tahl Propp Equities, according to NJBiz.
The transaction underscores the viability of the office market in Newark, which has seen economic strife in recent years. A 60 percent vacant office building in almost any market could be hard to finance.
“The loan is structured to provide funds for additional lease-up to achieve stabilization,” the source said. Representatives for Rugby told NJBiz.com they plan to spend $20 million on improvements to the building, which was erected in 1985.
Ackman-Ziff arranged both the sale and the financing, according to the source, but the firm declined to comment to MO. Calls to ARC and to Rugby were not returned.