Page 10 - RE-NJ

8 MARCH 2024
VERIS TO SELL HARBORSIDE 5, ITS FINAL OFFICE BUILDING
Veris Residential Inc. is on the verge of shedding its one remaining office building, a nearly 1 million-square- foot tower in Jersey City that is under contract to sell for $85 million.
The company in late February announced the pending deal for Harborside 5, at 185 Hudson St., as part of its fourth-quarter and full- year 2023 earnings report. It noted that it signed a binding contract in January to sell the 34-story building to an undisclosed buyer, all but completing its transition to a pure- play multifamily operator under a plan that is years in the making.
A source familiar with the deal identified the buyer as 601W Cos. LLC, the New York-based firm that just last year acquired Harborside
buildings 1, 2 and 3 in Jersey City from Veris. The $420 million deal, which spanned nearly 2 million square feet, marked a milestone for the real estate investment trust and for the flagship waterfront office campus that was long synonymous with its predecessor, Mack-Cali Realty Corp., before it rebranded in 2021.
Mahbod Nia
portfolio of Class A properties and
a vertically integrated, best-in-class operating platform,” said Mahbod Nia, the company’s CEO. “While we have built a strong foundation to date, the potential for continued value creation and relative outperformance as we mature as a multifamily company
is tremendous. We look forward to this next phase, during which we will work to further optimize our operations, capital and balance sheet to the benefit of our stakeholders.”
CBRE and Cushman & Wakefield were marketing Harborside 5 on Veris’ behalf. According to the REIT’s Q4 earnings release, the 977,225-square- foot building was 34.6 percent leased, including 42,964 square feet that is expiring this year and 28,856 square feet expiring in 2025.
The property came to market in
late 2022 alongside Harborside 6, a 245,364-square-foot office building at the corner of Christopher Columbus Drive and Washington Street, which American Equity Partners acquired last year. Meantime, Related Cos. last fall acquired Harborside 4, an adjacent parcel that’s now slated to become a 750-unit luxury apartment tower.
The sale of Harborside 5, which was built in 2002 and upgraded in 2011, will mark the last piece of what was once a sprawling office portfolio under Mack-Cali, which was crippled by waning demand for its aging suburban properties starting more than a decade ago. That prompted
its plan to right-size its office holdings and expand into the luxury multifamily sector, which began in earnest with its 2012 acquisition of Roseland Property Co.
That transition accelerated when the REIT, under new leadership at the board and executive level, rebranded in 2021 to Veris Residential. The company then declared its plan to sell all non-multifamily properties, including office buildings in higher- end submarkets such as the Hudson waterfront and Short Hills.
REIT underpinned by a high-quality
DEVELOPER PLANS TWO-BUILDING, 515-UNIT PROJECT IN JERSEY CITY
A developer is eyeing plans to build two new apartment towers with a combined 515 units under a project that would transform more than five acres near Jersey City Medical Center.
The firm, Grand Jersey Group LLC, is under contract to buy the property from the Jersey City Redevelopment Authority after the agency approved the sale in late January. That has
set the stage for its redevelopment of the once-contaminated parcel, located between the New Jersey Turnpike extension and Monmouth
Street, which would include new infrastructure.
The West Orange-based developer would excavate and cap the property to make way for 515 apartments across two interconnected buildings rising 26 and 25 stories, according
to the firm. Designed by MHS Architecture, the project would also include rooftop amenities, more than 172,000 square feet of office space, 38,000 square feet of ground-floor retail space and structured parking for 720 vehicles.
Grand Jersey Group was slated to close
on its $30 million acquisition in March.
“Jersey City is showing leadership and foresight by approving Grand Jersey,” the development firm’s Vincent Garcia said. “An overlooked part of the city with no infrastructure will be transformed by the project. Grand Jersey will bring utilities, streets and sidewalks along with excavating and capping the property, kickstarting the redevelopment of the area. We look forward to moving forward after closing the deal.”
Published reports have described the site as being used for unpermitted landfilling operations until the mid- 1980s, citing reports by the U.S. Environmental Protection Agency. But Grand Jersey Group noted that the state Department of Environmental Protection recently removed the “landfill” designation, which it says was mistakenly placed on the property in 2012.
According to the developer, the change is significant because the JCRA completed a multimillion-dollar site remediation more than a decade ago that was under the strict supervision of state and federal regulators.
Grand Jersey Group LLC plans to build 515 apartments across two interconnected towers off Monmouth Street in Jersey City, in a project that would also include rooftop amenities, office and retail space and structured parking for 720 vehicles.
“Over the
past three
years, we have successfully transformed Veris Residential from a complex company to
a pure-play multifamily
Harborside 5 at 185 Hudson St. (foreground) in Jersey City
THE BRIEFING
Rendering by MHS Architecture/Courtesy: Grand Jersey Group LLC
Courtesy: CBRE