iStar CEO Jay Sugarman (left), The LeFrak Organization’s Richard LeFrak, and 570 Washington Boulevard in Jersey City (Credit: Getty Images and iStar)
The LeFrak Organization, which has spent more than three decades developing the massive planned community Newport in Jersey City, parted with one of its office buildings for $170 million.
iStar bought the 350,000-square-foot Newport Office Center 6 in the heart of Jersey City’s downtown from LeFrak, sources told The Real Deal.
The purchase, which closed last week, works out to about $485 per square foot.
Representatives for iStar and LeFrak declined to comment. Cushman & Wakefield’s Adam Spies and Kevin Donner worked with their colleague Gary Gabriel – who’s based in Cushman’s East Rutherford, New Jersey office – to market the property and negotiate the sale on behalf of LeFrak. The brokers couldn’t be reached for comment.
The sale is the most expensive deal for a Jersey City office tower since February of 2016, when Gramercy Property Trust sold the tower at 90 Hudson Street to Spear Street Capital for $181 million.
The 10-story Newport Office Center 6, which has a street address of 570 Washington Boulevard, is part of the 300-acre mixed-use Newport megadevelopment that the LeFrak family has been working on since 1986. Family patriarch Samuel LeFrak paid $50 million in 1985 to acquire 600 acres of Jersey City waterfront, which eventually became the planned complex of Newport. Within the complex is eight office buildings, 18 residential buildings and two hotels.
LeFrak, now headed by Richard LeFrak, developed Office Center 6 in 2003 as a built-to-suit office property for JPMorgan Chase. In 2009, New Jersey officials put together an $85 million incentive package to lure the Depository Trust & Clearing Corporation across the river from its offices in Lower Manhattan to set up shop in LeFrak’s building.
DTCC, which is the largest tenant at 570 Washington, moved about 1,600 employees to New Jersey in 2013, and retains offices in Manhattan at 55 Water Street.
DTCC appears to have signed a sublease with JP Morgan, whose lease with LeFrak expires at the end of 2021, according to marketing materials for the building’s office space.
iStar, meanwhile, is working elsewhere in the Garden State. The Midtown-based real estate investment trust has reportedly proposed building a new beach club on the Jersey Shore in Asbury Park, where the company is the city’s master waterfront developer.
In New York, the company late last year sold a development site it had owned in Coney Island to nonprofit afforable housing developer New Destiny Housing Corporation for $10.4 million.
iStar also paid $153 million last year to buy the fee position at 635 Madison Avenue from SL Green Realty.