(Mark your Calendars: RealShare New Jersey in New Brunswick on September 13.)
EDISON, NJ-Lack of job growth and the uncertainty in Washington regarding the national debt continue to drag on office leasing, Mack-Cali Realty Corp. executives said during the company’s second quarter conference call. However, that isn’t stopping the company from pursuing new development, including a multifamily high-rise tower at Harborside in Jersey City, or acquisitions, possibly including Newport Tower, also in Jersey City.
“The cloud of uncertainty regarding the debt ceiling and the political posturing continue to be a drag on business,” said Mitchell E. Hersh, president and CEO. “Together with the unknown impacts of healthcare reform and Dodd-Frank, this continues to weigh on business.”
Even so, during the quarter, the company leased 1.08 million square feet, consisting of 912,739 square feet of office space and 168,951 feet of office/flex space. Of these totals, 408,717 square feet were for new leases and 672,973 were for lease renewals and other tenant-retention transactions. The company’s in-service portfolio was 88.1% leased at the end of the quarter, compared with 88.2% leased at March 31, 2011. For the quarter, funds from operations were $69.1 million, compared with 66.1 million in the second quarter of 2010. Net income was $17.3 million, versus $18.7 million in the year-ago quarter.
Among the leases signed in Northern and Central New Jersey were: Bressler Amery & Ross, PC, renewing 49,957 square feet with an expansion for 20,717 feet at 325 Columbia Turnpike in Florham Park; Corelab Partners signing for 58,807 square feet at Princeton Overlook I in Princeton; Birdsall Services Group taking 28,763 feet at 65 Jackson Dr. in Cranford; Wells Fargo Advisors LLC, signing a new lease for 22,207 square feet at One River Centre, Building Two, in Middletown; and New Jersey Property-Liability Insurance Guaranty Association renewing 20,673 feet at 222 Mount Airy Rd. in Basking Ridge.
In Southern New Jersey, Bayada Nurses has renewed 26,465 square feet and signed an expansion of 2,800 feet at 101 Executive Dr., and a new lease for 5,400 square feet at 1 Executive Dr., in Moorestown; and Allstate Insurance Co. signed for 25,497 square feet at 224 Strawbridge Dr. at Moorestown Corporate Center in Moorestown.
Housing residents is also in the company’s future, as it makes plans for a one million-square-foot high-rise tower at the Harborside complex, working in a joint venture with a residential developer. Hersh said he hopes to be in the ground in the spring. “We have significant development capability down along the waterfront,” he said. “At this point the cost of development, even with Urban Transit Hub tax credits, hasn’t been a catalyst. The waterfront tenancy has been in the financial services sector.”
The company also is looking at acquisitions, including the Newport Tower in Jersey City. “It is a class A asset,” he said, adding that, “It’s a little early to say how that process is going.”
Clearly, though, the leadership in Washington needs to settle their differences to calm the financial community, Hersh explained. “When they do, the company is well-positioned,” he added. “The United States is clearly still the safe haven of the world. New York City is evidence of that, and we’re just around the corner.”
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