Garden State office market growth

Cranford, N.J.-based Mack-Cali Realty Corp. has two more Class-A buildings lined up for Harborside Financial Center in Jersey City, N.J. Down the road in Parsippany, N.J., a subsidiary of Cleveland-based KeyBank USA has leased 200,000 sq. ft.

On the Hudson River waterfront, Mack-Cali will develop Harborside Plaza 5, a 33-story, 915,000 sq. ft. building with a seven-story parking garage, and Harborside Plaza 10, a 19-story, 575,000 sq. ft. New York-based Charles Schwab & Co. has leased 300,000 sq. ft. for 15 years at Plaza 10, which is scheduled for completion in early 2002. Slated for completion in the third quarter of 2002, Plaza 5 is 25% preleased.

Total development costs for the new developments are estimated at $400 million. The projects, which will be funded initially through Mack-Cali's revolving credit lines, are expected to provide unleveraged returns of approximately 11%.

Harborside Financial Center will total 3.6 million sq. ft. upon completion of Plazas 5 and 10. The 2.1 million sq. ft. development is currently fully leased. Mack-Cali has additional land that can accommodate 4.5 million sq. ft. of office development.

In Parsippany, KeyBank subsidiary Champion Mortgage has leased 200,000 sq. ft. at 2 Gatehall Drive from an ownership venture consisting of New York-based Morgan Stanley and Florham Park, N.J.-based Gale & Wentworth. The local office of Dallas-based Trammell Crow Co. represented Champion Mortgage.

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