Hartz snaps up another slice of Jersey waterfront for $24M.

In a rare move for a company that has developed and built more than 90% of its 35 million s/f portfolio, Hartz Mountain Industries, Inc. has agreed to purchase the 130,000 s/f 15 Exchange Place in Jersey City. The purchase price was $24M.

Hartz, which triggered the late 90s boom on Jersey City's waterfront with its speculative development of 15 Exchange Place's neighbors to the South, 90& 70 Hudson Street at Colgate Center, now controls one million s/f of office space spanning more than 1000 linear feet of the Jersey City waterfront.

"Historically 15 Exchange Place not only has been a symbolic and important building, it also has been successful in attracting tenants," said Emanuel Stern, President of Hartz Mountain Industries.

"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."

15 Exchange Place, which inspired the architecture for 70 & 90 Hudson Street, was built in the early 1900's to accommodate the booming stock transaction clearing flow that emanated from Manhattan as a result of a disparity in transaction taxes.

"New Jersey's economic advantages over lower Manhattan have cyclically spurred its development for hundreds of years," said Stern.

"First, it was shipping, then manufacturing and shipping and more recently, residential and now office space. Jersey City is more convenient for employees and less expensive for businesses. Jersey City's cycles follow lower Manhattan's there can be no Jersey City without a strong lower Manhattan. But 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 we didn't expect to be acquiring property to do it, but this was an opportunity that we could not let pass by."

Hartz began speculative construction of 90 Hudson Street in 1998. The 422,000 s/f building was fully leased six months prior to its December 1999 opening. Hartz then exercised its option to purchase the adjacent 70 Hudson Street and speculatively broke ground in September 1998. That 410,000 s/f building was fully leased by April of 2001 and opened in December that year.

Hartz later negotiated for and continues to own the 77 Hudson Street site, which is fully zoned and approved for 1.1 million s/f of office space. While leasing momentum has clearly slowed since then, Mr. Stern indicates that his company is interested in the long-term future of the Jersey City marketplace.