New Jersey office building listed

Real Estate Alert, June 9, 2004

An investment firm is marketing a well-occupied office building in Northern New Jersey.

The offering consists of the 124,000-square-foot building at 300 Harmon Meadow Boulevard in Secaucus, as well as the ground beneath an adjacent 150-room Hampton Inn. The land is leased through 2030 to the hotel's owner. The lease provides 12% of the income from the offered real estate.

The building and land are valued at about $27.5 million. At that price, the buyer's initial annual yield would be 8.9%. A buyer would have the option of assuming a $14.8 million mortgage, with a 5.6% rate, that matures in 2009. Ivy Equities, which is based in nearby Clifton, has given the listing to Cushman & Wakefield.

The occupancy rate is 94%. Bank of America occupies 57,000 sf under leases that start expiring in 2009, while Bank One occupies 25,000 sf through 2008. Rents range from $24-$27/sf. The building includes surface parking.

The occupancy rate compares favorably to the 86.6% level for Northern New Jersey (81% excluding sublease space). Rents in the local Meadowlands submarket average $25.34/sf. Secaucus has one major office project on the drawing board--the 600,000-sf Mill Creek office complex, which will be developed by Hartz Mountain Industries. Hartz also developed 300 Harmon Meadow, in 1983.

The six-story, octagon-shaped property is located within the Harmon Meadow mixed-use complex, which consists of 2.4 million sf of office space, seven hotels, two retail complexes and a convention center. The complex sits immediately off Route 3, which connects to the New Jersey Turnpike, which leads to the Lincoln Tunnel and New York City.