PARSIPPANY — A Parsippany office building is set for demolition to make way for a new Class A industrial facility, following the closing of a $30.8 million senior loan arranged by New York-based Axonic Capital. 5 Wood Hollow Road is the home of Toys R Us, Weichert Workforce Mobility and Coyne PR.
The financing supports the acquisition of the existing 330,000-square-foot Class B office building at 5 Wood Hollow Road by Deugen Development, a Paramus-based commercial real estate firm. The loan also covers pre-development expenses associated with repositioning the site.
The property is expected to become vacant by the end of 2026, with demolition scheduled to begin in late spring 2027. Following demolition, Deugen plans to develop a 340,000-square-foot Class A industrial facility on the site.
Axonic Capital said the transaction was sourced directly from Deugen Development and described it as an opportunity to support an experienced local developer in a market with strong demand for high-quality industrial space. The deal was arranged in collaboration with Deugen Development executives Kyle Mathis and Eric Gormeley. Financial terms beyond the senior loan were not disclosed.
Deugen Development is a family-owned company that specializes in the acquisition and development of commercial real estate throughout New Jersey. The firm oversees the full development process — including site selection, entitlement, construction, and asset management — with a current focus on industrial projects and value-add repositioning in supply-constrained infill markets.
Founded in 2010, Axonic Capital manages approximately $8 billion in assets and focuses on structured credit and commercial and residential real estate debt and equity investments.
No construction timeline beyond the planned 2027 demolition start has been announced.
