In 2008, what does it take to attract the best tenants to an office complex more than 30 years old? The answer, as Normandy Real Estate Partners learned, is simple: Everything.
Normandy, a Morristown-based commercial real estate company, has poured more than $4 million into the renovation of Continental Plaza, its three-building Class A office complex on Hackensack Avenue in Hackensack. Renovations began in spring 2007, and Normandy celebrated the completion Wednesday at the oldest building, 401 Hackensack Avenue, built in 1969.
Remaining competitive in North Jersey's Class A office market requires having every amenity imaginable on-site. Continental Plaza houses a satellite post office, dry cleaner, travel agency, tenant-exclusive gym and full-service cafeteria. A newsstand, similar to the kiosks in Manhattan's Pennsylvania Station, is coming soon, and will sell everything from magazines to lottery tickets, said William O'Keefe, vice president of Normandy.
The catalyst behind the renovations is competition. When Normandy
acquired the complex in September 2004, the two other "premiere" office complexes in the area -- Park 80 West in Saddle River and Glenpointe Centre in Teaneck -- had already been renovated, or were about to be. L&L Holding Co. spent an undisclosed sum upgrading Park 80 West in 2003. Alfred Sanzari Enterprises plans to spend more than $6.5 million on the renovations at Glenpointe, and recently started the second phase of work.
Before beginning their own renovations, "We felt we were a notch below Park 80 and Glenpointe, because the buildings were old and tired," said Raymond Trevisan, a principal of Normandy. "Now it's just as great as those buildings, but our rents are cheaper, which make us even more competitive."
According to the CoStar Group, average asking rents at Continental Plaza are $29 a square foot, $30 at Park 80 West, and $35 at Glenpointe.
On a tour of the building Wednesday morning, O'Keefe and Trevisan were the first to admit that as Continental Plaza aged, it acquired a less-than-desirable reputation for being outdated, even a bit shabby. Tenants hated the ugly green metal canopies that covered the walkways from the parking level to the buildings. Even the owners agreed that the building needed a new look and feel.
When Normandy began renovating, the walkways were the first to go. The lobbies and corridors of the buildings are now sheathed in cool gray and brown granite and frosted glass, an aesthetic that no longer carries a mid '70s feel.
Today's office tenants want an all-in-one package, a complex that doesn't "force employees to get in their cars and drive 20 minutes if they want to get a sandwich," O'Keefe said. "Owners want the most effective environments for their employees to get the most from them." Location remains Continental Plaza's strongest selling point. Besides the on-site amenities -- which include a Friday's restaurant at the front of the building – the complex is across Hackensack Avenue from The Shops at Riverside, an upscale enclosed mall and the Best Western Oritani Hotel.
There is no single anchor tenant at Continental Plaza, but its proximity to the Bergen County Courthouse has made it a popular site for law firms, O'Keefe said.
The three buildings have posted average occupancy rates of 85 percent to 90 percent, O'Keefe said. "Continental Plaza now has a reputation within the broker community of being a high-quality office plaza that offers value to the tenant," he said. "To have that support behind us is extremely important."