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The Hudson Waterfront market in New Jersey encompasses 32 Class A office buildings, one of which is Black Creek’s 3 Second Street, an 18-story, 594,000 square foot property located on the waterfront in Jersey City.
With no new Class A office construction in over 20 years, the market is experiencing a shift in tenant composition with more consumer-facing tenants moving in to address the changing demographics in the area.
Black Creek experienced this firsthand; in 2017, a global financial services firm moved out of 3 Second Street following their lease expiration, which led to occupancy declining to 64 percent.
The company’s asset management team took the move out as an opportunity to upgrade the property – rebranding the building, refreshing the lobby, and creating a marketing suite that highlights the unobstructed views of Manhattan. These improvements mixed with the property’s proximity to convenient transportation to Manhattan via the PATH train and ferry, led to increased interest in the space.
First, the team secured attractive companies for the ground floor in the form of a coffee shop and a modern restaurant featuring an upscale event space. Not only did this energize the ground floor of the building, but it offered current and potential tenants desirable amenities. The completion of this leasing brought occupancy of the property up to 84 percent.
By taking a hands-on, flexible approach to both building renovations and leasing, the firm has seen occupancy increase by 20 percent in the 24 months following the move out of the building’s main tenant. This increase in occupancy not only has resulted in a stabilized asset that is delivering value for investors, but an asset that is attracting high-end tenants in a space-constrained market.
Shortly after securing new tenants, Black Creek’s office team completed two of the largest leases in 2019 for the market – a 52,000 square foot lease with a financial services and regulatory firm and a 25,000 square foot lease with a global spirits distributor, which will serve as their U.S. headquarters.
Capitalizing on its unique location, Black Creek created a new marketing suite that highlighted 3 Second Street’s exclusive, unobstructed views of Manhattan – a true differentiator in a market where space is at a premium.