Life on New Jersey waterfront for commercial property remains active.
Due to recent speculative development, the vacancy rate is considerably higher than it was a year ago - about 18.2 percent now as opposed to 8.6 percent this time one year ago. However, several leases currently in the works will cause that number to shrink, and since we will probably not see any more true speculative construction anytime soon, it might mean tougher space searches for tenants and higher rents down the road. On the other hand, several Wall Street firms that have offices on the Waterfront may be giving up space. For example, Dun & Bradstreet's Telerate Division has begun moving out of 350,000 square feet in the area. At this point, there's no longer a critical shortage of space.
Today, worries on the part of many financial services firms are affecting the real estate market in New York City, and this is having a rather unpleasant ripple effect on the Waterfront. Merrill Lynch has already announced that it's postponing some good-sized leases in both New York and New Jersey, as well as several other firms. This will probably not hurt the leasing situation on the Waterfront very much, but it's certainly going to bring growth pretty much to a halt for the time being. Other than the buildings now under construction, nothing's going to go up on the Waterfront without ironclad long-term commitments from Triple-A tenants.
By far the biggest and priciest sale transaction on the Waterfront in the past year was Newport Tower, a Class A office building at 525 Washington Boulevard in Jersey City. It consists of just over one million square feet, and TrizecHahn bought it at the end of 1997 for just under $160 million, or $155.87 per square foot. The other two large deals were 30 Montgomery Street in Jersey City, a 300,000 square-foot building bought by Steve Denholtz & Partners for $21.1 million, or $70.33 per square foot; and 26 Journal square in Jersey City, a 105,000 square-foot building bought by Bernard Financial Group for 2,870,000 or $27.33 per square foot.
In terms of construction, the two really exciting new buildings going up now on the Waterfront referred to previously include Newport Office Center III at the Newport Office Park in Jersey City. This will be a 14-story, 567,769 square-foot building. It's a state-of-the-art "smart" building overlooking Newport's marina and the beautiful New York City skyline, with huge floorplates, high ceilings, plenty of transportation, a helipad, health club and nearby hotels, with an asking rent of $29 per square foot.
At 90 Hudson Street, between Grand and York streets in Jersey City, the second phase of the proposed 6.5 million square-foot Colgate Center is going up: a 12-story, 419,393 square-foot building, of which 262,120 square feet is still available for rent at an asking price of $32 per square foot. The first deal was recently made by Lord Abbett. It will include lobby-level retailing and ample parking.
These two buildings should keep brokers busy for a while!
|Printer friendly Cite/link Email Feedback|
|Publication:||Real Estate Weekly|
|Date:||Dec 16, 1998|
|Previous Article:||Manhattan condos commanding higher prices than co-ops.|
|Next Article:||Forecast predicts strong real estate markets in 1999.|