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601W snags $65M loan for Jersey City waterfront office

Northwind provides its first office loan in three years

601W secures $65M loan for Jersey City Office Building

A photo illustration of Northwind Group’s Ran Eliasof and Harborside 5 in Jersey City, New Jersey (Getty, Northwind Group, LoopNet)

Office is dead, except in New Jersey.

Northwind Group provided a $65 million loan for 601W Companies’ 33-story waterfront Class A office building in Jersey City. New York-based 601W recently bought the Harborside 5 building for $85 million from Veris Residential. 

The acquisition will add to 601W’s vast portfolio in Harborside. The group acquired Harborside 1, 2, and 3, three class A office buildings, last year from Veris Residential for $420 million.

The deal is a positive sign for the office market. Over the past few years, banks and alternative lenders have pulled back from financing the sector because of vacancies and work-from-home policies. 

But now the value of office buildings has declined to a point so low that some lenders are willing to lend again, despite the sector’s challenges.

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“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 Northwind Group founder Ran Eliasaf.

Harborside 5 totals over 1.5 million square feet, including a 1,150-space parking garage. It has clear views of the Manhattan skyline and sits next to the PATH train and ferry station. 

Veris Residential, formerly known as Mack-Cali Realty, struggled with underperforming suburban office buildings. In 2019, Mack-Cali became the target of activist investors, forcing changes to its board and executive suite. With the sale of Harborside, it has shifted to become a pure-play multifamily company.

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601W Companies owns 20 million square feet of commercial space across more than 20 office buildings and has been one of the few active buyers during the sector’s malaise. In 2021, it secured a $60 million bridge loan from Northwind for an office building in Chicago’s West Loop market. 

Jersey City has seen a boom in new residential construction. Between 2010 and 2022, Jersey City permitted roughly three times as many housing units as New York City per capita, according to an analysis of Census Bureau and New York City Planning data. Tishman Speyer plans to add 2,000 units to the Jersey City waterfront. Brookfield recently launched the second phase of its 5,500-unit Hudson Exchange.

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