Carlton Strategic, New Valley Pick Up Mixed-Use Space in Northern NJ

Nearly four decades after building The Plaza at Harmon Meadow in Northern New Jersey, Hartz Mountain Industries has sold it to a joint venture.
Howard Michaels

Howard Michaels, Carlton

Nearly four decades after building The Plaza at Harmon Meadow, a 217,613-square-foot mixed-use property in Northern New Jersey, Hartz Mountain Industries, Inc. has sold it to Carlton Strategic Ventures Ltd. and New Valley L.LC. for $64 million.

Located off Route 3 and the New Jersey Turnpike at 650 and 700 Plaza Drive in Secaucus, N.J., the asset is comprised of 188,834 square feet of retail space and 28,779 square feet of office space. It is 97 percent occupied and anchored by a 59,110-square-foot Kerasotes ShowPlace 14 movie theater at 650 Plaza Drive. Tenants at 700 Plaza Drive include Pier 1 Imports, Cosi, Starbucks, Chili’s, Chipotle, Houlihan’s and Red Lobster. Ernst & Young is an office tenant.

A release from The Carlton Group stated that the acquisition “represents a unique opportunity to acquire an urban lifestyle center, in a hard-to-penetrate market, with credit tenancy and a strong double-digit cash-on-cash yield.”

Carlton Strategic Ventures is the principal transaction arm of The Carlton Group, a New York-based real estate investment banking firm. CSV owns and operates, through its investment management division, more than 3 million square feet of residential and commercial assets. New Valley L.L.C. is the wholly-owned real estate subsidiary of Vector Group Ltd., which maintains equity positions in numerous real estate investments in the United States, the Caribbean and Europe.

Carlton’s Chairman Howard Michaels said in the release “investor appetite for yield and risk-adjusted return is at an all-time high and to generate double-digit current cash on cash returns with significant upside makes this an acquisition consistent with our acquisition criteria.”

Carlton COO Kevin Swill added, “This transaction is exactly the type of investment which Carlton is looking for in its accredited crowdfunding business.”

RKF, a leading independent real estate firm that specializes in retail leasing, arranged the sale on behalf of the owner, Hartz Mountain, which built, owned and managed the property. The RKF team, including President, Investment Sales Jeff Fishman; Managing Director Brian Segall; Vice President Greg Covey; Managing Director Jerry Rockoff and Associate Andrew Jacobs, also represented The Carlton Group in the transaction.

Segall, commenting in a release from RKF, said the property attracted “tremendous interest” from a wide variety of buyers, including institutional investors, national groups and local independent firms because of its strong trade area and tenant base.

“This asset is situated alongside a dynamic mix of offices, hotels and retail, all of which benefit from the proximity to New York City,” Segall said. “The thousands of office workers, visitors and nearby residents in this area make this a uniquely valuable asset. The transaction aligns with the seller’s disposition strategy, while new ownership will see great long-term upside potential.”

The Record newspaper reported that Hartz Mountain also owns the nearby Mill Creek Mall and more than 3 million square feet of office and retail space, a convention center, hotels, restaurants, and recreational and entertainment facilities in the area. The newspaper said Hartz Mountain sold 400 Plaza Drive in the Harmon Meadow development in February to Extended Success L.L.C. for $30 million. Hartz Mountain will maintain its headquarters in the office building, according to The Record.

Over the past two years, Hartz Mountain has sold several other properties in Harmon Meadow as it began diversifying its holdings, acquiring multi-family and industrial assets in the Southeast and West. In October, it acquired a 2.5 million-square-foot North Atlanta distribution portfolio of industrial centers for $129 million.