One of Downtown Jersey’s City’s biggest office developments has snagged an acquisition loan just months after changing hands.
Northwind Group, a Manhattan-based real estate private equity firm, announced that they provided a $65 million first mortgage acquisition loan collateralized by Harborside 5, a 33-story office property that spans 1.5 million square feet. The building was acquired last week by 601W Companies, who own 20 million square feet of commercial space across over 20 office buildings in the United States.
Harborside 5, previously owned by Veris Residential, includes a 1,150-space parking garage and features unobstructed views of the Manhattan skyline. It is located adjacent to the Exchange Place PATH train, near the Hudson Bergen Light Rail, and walking distance to ferry service via NY Waterway.
601W made a big splash last year when it acquired Harborside 1, 2, and 3 for a record-setting price of $420 million. Upgrades already underway at the facility include a refresh of the interconnecting atrium and new amenities, with the complex set to welcome several new restaurants from the group behind Morristown’s acclaimed 1776 By David Burke in the future.
“We are very excited about the rapid growth and development of Jersey City and look forward to great leasing success,” said Mark Karasick, managing member of 601W Companies. “I am delighted to join forces once again with Northwind, which wrapped their arms around the transaction quickly and whose execution was flawless.”
The generationally low basis for a modern office property combined with prior experience lending to 601W Companies enabled Northwind Group to structure a competitive and swift financing solution. The loan capitalizes $45 million for the acquisition while also providing 601W with additional funds to commence an accretive leasing program.
“We are pleased to partner once again with 601W Companies, which reinforces our commitment to expanding our relationships with repeat, high quality sponsors,” said Ran Eliasaf, founder and managing partner of Northwind Group.
“Despite the challenges in today’s office market, the very attractive basis of this acquisition coupled with recent institutional leasing velocity in Jersey City gives us confidence in the potential of this Class A office building, which is a strong value-proposition for businesses looking to upgrade their space,” he added.
Northwind Group noted that Jersey’ City’s development has outpaced that of New York City’s in recent years and the region continues to have one of the most competitive real estate markets in the nation.
“This is the first office loan we felt comfortable issuing in the last three years and the loan’s attractive basis fits well within our funds’ investment risk profile and loan diversification strategy,” said Eliasaf.
The sale of Harborside 5 and the waterfront Harborside complex continues a pattern for the Exchange Place neighborhood, which welcomed a much-anticipated Whole Foods to the landscape last year.
Other notable transactions in the area include their sale of a parking lot known as Harborside 4 to The Related Companies, who are hoping to bring a new mixed-use development to the site.
