Real Estate New York
Scaling New Heights Above
Jersey City's Waterfront
By Joseph Cavaluzzi
In terms of building brighter prospects for those seeking class-A facilities west of the Hudson, Mack-Cali Realty is ready, willing—and financially able—to share the developmental spotlight with Jersey City as the current economic climate unites two of the Garden State’s leading success stories.
ON THE WATERFRONT — one of the best pictures of years gone by, or in the picture as one of the best places in New Jersey for mixed-use development in years? If the answer is the latter, then it’s only logical to expect Mack-Cali Realty Corp. to play a lead role in the epic saga of Jersey City’s water’s edge endeavors.
A Cranford, N.J-based real estate investment trust, Mack-Cali has artfully turned in a show-stopping performance as one of the nation’s top public office REITs. As such, the entity owns enough land at its two Jersey City waterfront sites— Harborside Financial Center and the American Financial Exchange—to develop 6.3 million sf of space. These holdings are cast primarily as office space, but retail, residential and hotel development components would fill strong supporting roles as well.
As for the timing element, the REIT seemingly could not have scripted a more convenient scenario as the company’s conservative balance sheet and market capitalization of $3.6 billion helped Mack-Call earn a BBB credit rating in January for prospective debt and preferred stock offerings. Duff & Phelps Credit Rating Co., based in New York City, also liked Mack-Cali’s high-quality assets, the depth of its senior management, and its local market expertise.
Then there’s the benefit of being "on location" in Jersey City; a venue widely billed as the only large New Jersey city to experience private employment growth over the past two decades. This growth has been driven by gains throughout the finance, insurance and real estate (FIRE) sector, whose companies have found the locale’s tax incentives and lower rents an eminently viable and economical alternative to Manhattan for their less visible—although employee - intensive— back-office operations.
Today, however, Jersey City (which statistically fared better than many other New Jersey office markets during the last recession) is garnering interest from executives in the front office as well, according to brokers working the market for Mack-Cali. As such, they point out that construction is already underway by Secaucus-based Hartz Mountain Industries (at Colgate Center) and by the Queens-based Lefrak Organization (at Newport Center). Also high on the playbill are development plans for restoring piers, extending the promenade and opening a new light rail system to run along the waterfront. In short, Jersey City appears to be on the threshold of new stardom itself as an address with panache.
In essence, the question isn’t how big a role Mack-Cali will play in the scenario of suited executives conducting business and staying for pleasure along a waterfront bustling with commerce. The real question is how soon Mack-Cali will sign the initial tenants that allow the REIT to undertake its enormous contribution of building "a city within a city" that appears to be on the verge of emerging from under the shadow of Lower Manhattan.
©Copyright 1999 Real Estate New York