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Hartz Buys Jersey City Tower For 24 Million
Listen to this articleHartz Mountain Industries, a developer based in Secaucus, last Saturday bought an office tower with 145,000 sq. ft. on Jersey City”s waterfront. Hartz is believed to have agreed to pay the owner, NOL Properties, about $24 million for 15 Exchange Place. The building”s tenants include Merrill Lynch, Hill Thompson, Nasdaq and Covad Communications. Hartz”s purchase of 15 Exchange Place comes at a time when the Jersey City real estate market is facing a severe slump. Vacancies are high and rents are depressed in the city that saw the state”s biggest real estate boom in the late 1990s. Much of the demand in those days came from big financial services companies such as Goldman Sachs and Merrill Lynch, who moved back-office operations from New York City. The recession has led to massive layoffs at many financial services firms in Jersey City, weakening demand for office space. Hartz”s president Emanuel Stern, however, is taking a longer-term view. “Historically, 15 Exchange Place not only has been a symbolic and important building, it also has been successful in attracting tenants,” he says. “We could never own enough of the Jersey City waterfront, and while there is space available in 15 Exchange Place, when the market returns, it will quickly absorb that and everything else that is available on the waterfront.” The office tower was built in the early 1900s to meet demand from Wall Street firms looking to house transaction-clearing facilities. These firms then favored Jersey City because of disparities in transaction taxes between New York and New Jersey. The architecture of 15 Exchange Place inspired Hartz to speculatively build two adjacent buildings in the mid-1990s, 70 Hudson St. and 90 Hudson St., in the former Colgate Center complex. Hartz also owns another waterfront site, 77 Hudson St., on which it can build a 1.1-million-sq.-ft office complex. Hartz will also surprise real estate industry watchers with its latest move. The company is essentially a developer, and has built more than 90% of its 35-million-sq.-ft. portfolio. Stern, however, is confident that the Jersey City market’s revival will make this purchase a great deal for him. “Jersey City will always be a more appealing location for some users, and we have focused on building a portfolio of the premier locations for that audience,” he says. “We didn”t expect to be acquiring property to do it, but this was an opportunity that we could not let pass by.” NOL Properties, which sold the building, is the real estate arm of Neptune Orient Lines, the national shipping and transportation company of Singapore. It was represented in the deal by the investment sales group of real estate services firm CB Richard Ellis.Mack-Cali Sells San Antonio Office Property Separately, Cranford’s Mack-Cali Realty (NYSE: CLI) said Monday it has sold Riverview Tower, a 20-story office building in San Antonio, Texas, for $11.03 million. The 71.2% leased property, which is located at 111 Soledad and is approximately 248,153 sq. ft., was sold to Partners Investors. “The sale of this property is consistent with our program of selling assets in non-core markets that do not fit our strategic profile,” said Mitchell E. Hersh, CEO of Mack-Cali, in a prepared statement.Mark McAllister of CBRE represented Mack-Cali in the transaction. At the close of trading, Mack-Cali shares were up $0.16 to $37.85.
