JERSEY CITY, NJ-Jones Lang LaSalle indisputably got a plum when Mack-Cali turned to it to market 4 million square feet of prime waterfront area office space here. On the hand, Jersey Gold Coast waterfront space is not as plummy as it used to be.
A new analysis by Cushman & Wakefield researchers indicates the submarket has struggled out of the recession, and market fundamentals have softened.
In the last 18 months, the waterfront area has seen negative absorption of 709,124 square feet. Since 2010, the vacancy rate has risen 1.4 percentage points to 10.4%.
The waterfront has also seen leasing velocity dwindle and fewer large deals, with about a 40% drop in overall demand. C&W notes. What was consistently a million-square-foot per-year market for leasing until 2009 now generates an average of about 600,000 square feet in annual deals.
Mack-Cali's Harborside Plazas 2, 3 and 5 and 101 Hudson Street, all close to the Exchange Place PATH station, are all part of JLL's assignment.
“Harborside offers some of the highest-quality office space along the waterfront,” said JLL's Scott Panzer, who will be leading the leasing team. Also, Harborside 5 is the newest office complex in Jersey City.
But Jersey City's "Wall Street West” suffered greatly when the other Wall Street had its meltdown helping to precipitate the recession, and it has not recovered as robustly, by most estimates. Mack-Cali shifted to focusing on residential real estate as a result of office markets sagging in New Jersey for about five years now.
The REIT has been divesting itself of various suburban office buildings – or hiring other companies to handle leasing - for the past year, as it launched multifamily projects with its Roseland division acquired in fall 2012. Handing over the leasing of a large chunk of its Jersey City waterfront space appears to be a new move in Mack-Cali's concerted campaign to shift its focus onto housing.
JLL's team for the assignment includes Panzer, vice chairman; Jonathan Meisel, managing director; and Aaron Ellison, senior vice president. They will work closely with Mack Cali's in-house leasing executives, Christopher DeLorenzo and Thomas Savoca.
“Mack-Cali is widely recognized as a premier owner and developer of commercial real estate in New Jersey,” Panzer said.
Harborside is also the site of a planned residential project announced in 2011 as a joint venture between Mack-Cali and Ironstate Development. The companies propose to build 500 units and a parking garage.
The buildings at which JLL will oversee leasing include:
- Harborside Plaza 2, a ten-story building with 761,200 square feet
- Harborside Plaza 3, also ten stories, with 725,600 square feet
- Harborside Plaza 5, a 34-story, 978,301-square-foot tower, and
- 101 Hudson Street, a 40-floor tower with 1.3 million square feet and a five-story parking deck.
JLL has three full-service offices in Parsippany, Iselin (Metropark) and Hasbrouck Heights. The company operates in 70 countries from more than 1,000 locations worldwide.
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