Harborside buildings 5 (foreground) and 6 in Jersey City — Courtesy: CBRE
By Joshua Burd
Veris Residential Inc. has agreed to sell two additional pieces of its flagship Harborside campus in Jersey City, including a nearly 250,000-square-foot office building and a development parcel that was once slated for more than 1 million square feet of additional space.
The existing building, Harborside 6, is under contract to sell for $46 million, the real estate investment trust said in its second-quarter earnings release last week, touting its continued push to exit the office sector and focus exclusively on multifamily assets. The company did not provide additional information, but a source familiar with the deal identified the would-be buyer as American Equity Partners, which owns another waterfront office building in the city at 15 Exchange Place, having acquired it early last year for $48 million.
Harborside 6, which sits at the corner of Christopher Columbus Drive and Washington Street, houses 245,364 square feet of office space with a 1,029-space garage and a planned 47,542-square-foot Whole Foods store.
“Our experience is that Jersey City is great real estate,” David Elkouby, a partner at American Equity Partners, said in an email. “We look forward to adding Harborside VI to our portfolio and having a stronger presence in the Jersey City market.”
Meantime, Veris Residential has agreed to sell a nearby land parcel at Harborside 4, reportedly to real estate giant Related Cos., for $58 million. The site was once slated for a 1.2 million-square-foot office tower, which the former Mack-Cali Realty Corp. announced in fall 2016 as part of a planned partnership with SJP Properties.
The office building and land parcel were among five properties that Veris said were placed under contract in Q2, also including:
- A land site at 107 Morgan St. in Jersey City (under contract for $61 million)
- A land site at 2 and 3 Campus Drive in Parsippany (under contract for $23 million)
- An office building at 23 Main St. in Holmdel (under contract for $17 million)
JLL’s Jose Cruz and Ryan Robertson are representing Veris in the sale of 107 Morgan.
Veris, which is based at Harborside, announced the pending deals on Thursday amid several other steps to cement its move to a pure-play multifamily REIT. Also among them, the company on July 25 purchased and redeemed the preferred units and certain other ownership interests from Rockpoint and its affiliates in Veris Residential Trust for $520 million, while also entering into a transitional $60 million revolving credit facility, of which $25 million was drawn as of July 26, and a $115 million term loan agreement to fund the buyout of Rockpoint`s interest and provide corporate liquidity.
Company executives noted that the facility requires that all excess cash proceeds from dispositions and financings be used to repay the term loan, while it can be extended by six months at the maturity date if the term loan has been repaid by 50 percent. Future dispositions figure to include Harborside 5, a 983,041-square-foot office building on Hudson Street, which also has a 1,150-space car parking garage.
CBRE was marketing Harborside 5 and 6 last fall, following Veris Residential’s sale of the complex’s 1.9 million-square-foot centerpiece — Harborside buildings 1, 2 and 3 — for $420 million.
“The negotiated early redemption of Rockpoint’s interest substantially simplifies the company`s overall structure while maximizing our strategic and operational flexibility,” Mahbod Nia, Veris Residential’s CEO, said in the Q2 earnings release. “This latest advancement, alongside our continued progress with a further $188 million of assets under contract despite an extremely challenging transaction market, reflects a pivotal moment for the company that cements our transformation to a multifamily REIT.”
