American Realty Advisors has acquired 30 Montgomery Street, a 16-story boutique office tower located in the Hudson Waterfront submarket of the New York City Metro area for $101 million.  The 315,385 square-foot building, which is ideally situated on the New Jersey Hudson Waterfront within one block of a major mass transit hub, was substantially upgraded and renovated over the last several years. 

American was attracted to the asset because of the direct transportation link to Manhattan, as well as access to new and growing amenities.  In addition, 30 Montgomery will benefit from its position as a lower rent alternative in an emerging 18-hour live/work/play location, which is similar to other emerging markets throughout the country, e.g. the Chicago Fulton Marketplace in which American recently acquired Google’s Midwest headquarters.

According to Kirk Helgeson, American’s Chief Investment Officer, “30 Montgomery’s location is particularly attractive based on the rapidly transforming Hudson Waterfront submarket, which is benefitting from strong population growth, sustained residential development, expanding cultural/entertainment/retail amenities, and a diversification of the local employment base.”

Helgeson also notes that this asset is ideally situated to benefit from one of America’s fastest growing residential markets.

“Jersey City is projected to add nearly 7,500 units by the end of 2017, driving additional economic growth associated with the new residents, service providers, retail, and amenities necessary to support a thriving 24/7 CBD,” says Helgeson.

The building, which is 71.6% leased to 46 tenants, is also characterized by its easy accessibility to numerous modes of public transportation. 30 Montgomery sits one block from the Exchange Place PATH station, which offers non-stop access to Wall Street in under five minutes, as well as access to New York Penn Station in Midtown Manhattan in under 25 minutes.  In addition, the office is situated near the Hudson-Bergen Light Rail line, the New Jersey Transit bus lines, and three blocks from New York Waterway’s Paulus Hook ferry terminal, which provides 10 to 15 minute service to Lower Manhattan and Midtown.

Eric Cannon, American Realty Advisors’ Senior Director, Investment Group, added, “The Jersey City office market is in the midst of transformation.  Historically a back-office operations concentrated submarket for the financial services industry, the market is becoming a diversified mix of front-office users spanning a variety of fields, including technology, business services, media, consumer products, and publishing. Over the last five years, Jersey City has experienced substantial population growth, and is on pace to dethrone Newark as the largest city in New Jersey later this year.” 

Cannon also notes that 30 Montgomery’s unique 21,000 square-foot floor plates stand out in a market dominated by office towers with large floor plates.  “We expect this asset to continue to cater to a niche tenant market, offering functionality and identity to the market’s underserved smaller-space office users, as well as an expansive window line with views of the New York City skyline,” Cannon explains.  “With rental rates significantly below those in Manhattan, we believe that this asset offers an outstanding opportunity for tenants seeking lower cost space with unmatched access to nearby mass transit.”

American’s Kirk Helgeson adds, “During the course of our ownership of this asset, we plan to stabilize occupancy, significantly grow cash flow, and create a true core asset by renewing and marking in-place below-market rents to market, aggressively leasing the remaining vacant office space, creating vibrant retail space at the ground floor, and investing additional capital to finish cosmetic upgrades.”

Helgeson also notes that more than $25 million was recently spent on façade improvements, full building window replacements, an expansion of the lobby and retail space, and replacement of mechanical, electrical, and plumbing systems.

“This substantial renovation and modernization effort has elevated 30 Montgomery to a position among the premier Hudson Waterfront office towers, and will allow us to significantly drive rental rates for both new and existing tenants.”

The seller was represented by David Bernhaut, Andrew Merin, and Gary Gabriel of Cushman & Wakefield. 

ABOUT AMERICAN REALTY ADVISORS

With over $7.3 billion in assets under management, American Realty Advisors is a leading provider of commercial real estate investment management services.  For over 27 years, American has managed capital for institutional investors utilizing core and value-added commingled funds and separate accounts. American acquires assets directly or provides equity, preferred equity, mezzanine debt, debt, and hybrid debt to primary investors and developers operating throughout the United States for office, industrial, multi-family, and retail properties. More information regarding American can be found at www.americanreal.com.