Waterfront Corporate Center in Hoboken — Courtesy: SJP Properties
By Joshua Burd
SJP Properties has regained full control of a three-building, 1.5 million-square-foot office and retail complex in Hoboken that it built over more than a decade, having reacquired the initial phase as part of a joint venture with David Werner Real Estate Investments.
The partnership on Monday announced its purchase of Waterfront Corporate Center I, a 14-story, 566,215-square-foot building at 111 River St., from Veris Residential, which was previously known as Mack-Cali Realty Corp. It did so while touting the availability of a two-floor, 100,000-square-foot block at the property, marking the first time since the completion and initial lease-up of the campus that a space of that size has been on the market on a direct basis in any of the three buildings.
Terms were not disclosed. JLL’s Jose Cruz represented the seller, while Cushman & Wakefield’s Adam Spies, Andy Merin, Ben Lushing, Frank DiTommaso and David Bernhaut also represented both parties.
“This represents a tremendous opportunity for a company to establish a meaningful presence in Hoboken, which remains one of the top-performing markets in the region by virtue of its exceptional transit access and vibrant, 24/7 lifestyle,” said Steve Pozycki, founder and CEO of SJP Properties. “When you consider the market’s renewed focus on outdoor space, having direct access to the entire Hoboken waterfront just steps from the lobby is a huge selling point. Companies are demanding our brand of best-in-class property management — an important offering to their current and prospective workforce as they return to the office — and we know this space is going to lease quickly.”
News of the deal comes nearly six years after Mack-Cali purchased 111 River St. from Equity Commonwealth, paying $235 million at the time as it sought to expand its office holdings along the Hudson waterfront. But the real estate investment trust, now known as Veris Residential, recently said that it was pivoting completely from office space in order to focus exclusively on high-end multifamily properties.
That provided an opportunity for SJP to once again own and manage the entire Waterfront Corporate Center, which is home to tenants such as EY, Marsh & McLennan, Newell Brands, Walmart, RMS, Pearson and Wiley, as well as high-end restaurants and retailers at street level. It’s also a site that the developer is intimately familiar with, having built the three-phase complex between 2002 and 2014, while it still owns the second and third phases at 121 and 221 River St.
“To already have a team at 121 and 221 River, adding back the original asset and adding the third piece of the puzzle was logical for us in terms of scale,” said Alex Erdos, SJP’s senior vice president for leasing and marketing. “This is a very supply-constrained market. We’re fully leased in the other two assets and there continues to be this flight to quality, transportation-oriented, walkable neighborhoods for office space.”
Hoboken fits that description, he said, adding that it’s a destination for both families and young, single professionals, while it allows companies to pull from the labor pools of both northern New Jersey and Manhattan. Erdos also said Hoboken provides a potential middle ground for tenants that had been mulling the so-called hub-and-spoke model at the outset of the pandemic and trying to decide if and where they should open satellite offices for workers who live outside New York City.
“This is almost a nice in-between for a lot of users that were previously targeting Manhattan but also exploring the suburbs,” Erdos said. “This provides an opportunity for a multimodal commute.”
The complex is a short walk from the Hoboken Terminal, which provides rail, bus and ferry service, and a short drive from both the Holland and Lincoln tunnels and the New Jersey Turnpike. It also benefits from the city’s deep labor pool and base of affluent residents, as well as its location along the Hudson River and steps from Hoboken’s acclaimed downtown.
In announcing its deal, SJP noted that Waterfront Corporate Center III has achieved gold certification on the U.S. Green Building Council’s LEED scale — making it the only commercial asset on the New Jersey waterfront to do so — through the incorporation of energy-efficiency and air quality controls that enable healthy, light-filled environments for people to work and collaborate. The building is also WiredScore Gold certified.
Office space within Waterfront Corporate Center II and III is fully leased, reflecting the demand and the lack of supply within Hoboken despite some large vacancies that have loomed over other parts of the Hudson waterfront submarket.
“The waterfront as a whole has definitely had some hurdles, but it’s also had some pretty large users circling,” Erdos said. “And we’ve continued to see really robust activity in Hoboken.”