JERSEY CITY-Culminating a year of acquisitions of trophy office properties here, Manulife Real Estate has acquired 10 Exchange Place for $285 million. The deal is the first New York metropolitan area acquisition for Manulife, the global real estate arm of Canada-based Manulife Financial Corp., and the parent company of John Hancock Financial. It also the fourth major acquisition of a trophy property in Jersey City this year, says Andrew J. Merin, of Cushman & Wakefield’s Metropolitan Area Capital Markets Group, which orchestrated the sale.
“This is kind of unusual,” Merin tells GlobeSt.com. Merin, David W. Bernhaut, Gary Gabriel, Brian J. Whitmer and Kyle B. Schmidt represented the seller, a client of INVESCO, in the transaction. “Over $1 billion in bricks and sticks will have traded.”
The other deals were: 2 Journal Square, sold to Israeli company Gaia for $78 million; 70 and 90 Hudson Street, sold to CBRE REIT for $310 million, and the record-breaking sale of Newport Tower to Multi-Employer Property Trust (MEPT) for $377.5 million. Cushman & Wakefield was involved in all but the Newport Tower deal.
“There is not a lot of quality out there,” Merin observes. “In July, the market started to slow down. [But] Manulife did all their homework.”
The 748,005-square-foot 10 Exchange Place is a 30-story trophy office tower and a skyline landmark on Jersey City’s Hudson River waterfront. Tenants at the fully-leased building include renowned international companies such as ACE Insurance, Daikin McQuay, Kuehne + Nagel, Rabobank, Bank of America, Goldman Sachs and Amazon.com. The cap rate was approximately 6.5%.
“Newport Tower was traded at a lower cap rate,” Merin says. “But while this building is 100% leased, about 1/3 of the building rolls in 2014, and the rent is currently above market rates. It will require capital.”
Completed in 1988, 10 Exchange Place was the recent recipient of BOMA’s 2011 TOBY (The Outstanding Building of the Year) award for buildings over 500,000 square feet. LEED-Gold and Energy Star certified, the iconic tower offers unobstructed views of lower Manhattan from every floor.
Whether this pace can continue in 2012, however, is less certain. Offerings are slim right now, Merin says, but “you don’t’ know what ones are going to roll out.”
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