Axonic Capital announced the closing of a fully funded $30.8 million senior loan for Deugen Development to acquire, carry and demolish 5 Wood Hollow Road in Parsippany, New Jersey, paving the way for the future development of a 340,000-square-foot Class A industrial property.
The off-market financing supports the acquisition of the existing 330,000-square-foot Class B office building and covers pre-development expenses associated with repositioning the site. The property is expected to become vacant by the end of the year, with demolition scheduled to begin in late spring 2027.
Following demolition, Deugen plans to transform the site into a 340,000-square-foot Class A industrial facility. Financial terms beyond the $30.8 million senior loan were not disclosed.
Axonic sourced the transaction directly from Deugen and said the deal provided an opportunity to finance an experienced local developer in a gateway market characterized by strong demand for high-quality industrial properties.
The transaction was arranged in collaboration with Deugen Development executives Kyle Mathis and Eric Gormeley.
Headquartered in Paramus, New Jersey, Deugen Development specializes in the acquisition and development of commercial real estate throughout the state. The family-owned company oversees the full development process, including site selection, entitlement, construction and asset management, with a current focus on industrial projects and value-add repositioning opportunities in supply-constrained infill markets.
Founded in 2010, Axonic Capital is a New York-based alternative investment manager with approximately $8 billion in assets under management. The firm focuses on structured credit and commercial and residential real estate debt and equity investments.
KEY QUOTES:
“We continue to see opportunities to finance strong, local developers in high-quality asset repositionings.”
Erik Nygaard, Principal and Portfolio Manager, Axonic Capital
“The acquisition of 5 Wood Hollow aligns perfectly with our investment thesis of targeting premier industrial development projects in markets with strong demand and high barriers to entry. The I-287 corridor’s direct access to major transportation infrastructure and deep concentration of sophisticated industrial users make Parsippany one of the most compelling locations in the Northeast for this asset class.”
Kyle Mathis, Chief Investment Officer, Deugen Development