Maybe it’s the fact that we’re nearing the end of the year – or the timing is just pure coincidence — but the last few days have been filled with New Jersey office acquisitions in the hundreds of millions of dollars. Look at the list of deals:
- Metropolitan Center — $104.9 million
- 10 Exchange Place — $285 million
- Newport Tower – $377 million
- Morris Corporate Center — $110 million
That’s just in the second half. Many more deals come in just under $100 million. Of course, all of these are some of the great office buildings in the state – well located, well maintained, with a tenant roster of major corporations. They’ve earned their elevated status and commensurate prices.
All year long, we’ve been told that trophy properties are the preferred choice for investors. No one wants to take major risks, and high-rise office buildings, particularly in Hudson County, are about the safest investment around. Months ago, Mack-Cali CEO Mitchell Hersh noted that the trophy market was becoming overheated.
And sooner or later, we’re going to run out of available Class A-plus-plus buildings. What’s left? Will next year see this type of activity? Or will 2012 bear out the lyrics of that old song “All of the Good Ones are Taken”? If so, will investors start looking at lesser properties, driving a new market?
I’m looking forward to finding out.