James E. Hanson II, CEO and president of The Hampshire Cos., spoke during a recent ribbon-cutting event hosted by the firm — Photo by Hal Brown/Courtesy: Hampshire
By Joshua Burd
The Hampshire Cos. has made its first investment under the federal Opportunity Zone program, acquiring a parcel near Hackensack University Medical Center that it will redevelop as part of a joint venture.
The real estate investment firm said the property, 250 Essex St., is a .69-acre site that housed the now-shuttered Arena Diner. Located at the corner of First Street, the parcel is directly across the street from the hospital.
Hampshire is partnering with Paramus-based Danitom Development to redevelop the site, seeking to tap into the benefits of the new Opportunity Zone program. Created under the Tax Cuts and Jobs Act of 2017, the program seeks to drive investment to certain low-income and distressed areas in all 50 states, providing favorable tax treatment for capital gains that are redeployed into those neighborhoods.
The Hackensack site is within one of 169 census tracts in New Jersey that are designated as Opportunity Zones.
“Our legacy of cycle-tested investments and hands-on development approach puts us in a unique position to leverage the investment benefits offered by Opportunity Zones while working to improve our cities, towns and our local economy,” said James E. Hanson II, Hampshire’s CEO and president. “Our focus within these zones will be the development of multifamily, industrial and self-storage assets along the I-95 corridor throughout the Northeast.”
Greg James, director of capital markets for NAI James E. Hanson, represented Hampshire in the transaction. Terms were not disclosed.
Hampshire, which has deep roots in Hackensack, did not immediately provide additional details about its plans. But the project is poised to benefit from the site’s proximity to one of the state’s largest hospitals and less than a quarter-mile from NJ Transit’s Essex Street station, which offers service to New York City via the Pascack Valley Line.
The property is also just minutes away from 389 Main St., where Hampshire and Claremont Cos. broke ground earlier this year on a new 82-unit apartment building.
“Hackensack was quickly identified as an excellent market for us to make our first Opportunity Zone investment given its ideal location, strong local demographics, and its proximity and accessibility to mass transit,” said John Durso, a vice president and portfolio manager with Hampshire. “While this project marks our first Opportunity Zone investment, we have a long history in Hackensack and are looking forward to working with the city to revitalize the site.”
The 169 New Jersey census tracts that qualify span 75 municipalities, many of which have caught the eyes of investors and developers that have launched qualified Opportunity Zone funds. Under the program, investors who reinvest capital gains into a qualified fund can defer taxes through Dec. 31, 2026. Those taxes can be reduced by up to 15 percent at that point if they have held the investment for at least seven years.
Investors also have the chance to exclude the gains on all appreciation of the Opportunity Zone fund if they hold their investment for at least 10 years.
