Seven years after breaking ground on its first phase, Park Square has been acquired for $46.5 million.
The two-building complex was purchased by Mack-Cali Realty, which made the announcement on Thursday after the transaction closed on Wednesday. The property will be managed by Mack-Cali’s Roseland subsidiary, which oversees more than 3,300 residential units among 30 properties, most in New Jersey, including several in Morristown.
The four-story buildings have a total of 159 rental units — 96 on the the Main Street side and 63 on the Irving Street side, which includes 6,000 square feet of retail (currently about five tenants) as well as 205 garage spaces and eight on-street spaces. The one- and two-bedroom units range from 800 to 1,480 square feet (an average 1,176). Thursday’s announcement noted that the building is 94 percent leased.
The $46.5 million sale price works out to about $292,452 per unit more than either of two other recent sales of rental buildings. The 136-unit River Place on Lewis Street, constructed in 2004, sold for $26.25 million in 2011 — an average $193,014 per unit. Meridia Grand, an 88-unit complex on East Grand Avenue completed in 2010, sold later that year for $19 million — average $215,909 per unit. The Grand was sold again, with an announcement in early November; look for details in a future blog post.
The Irving Street side of Park Square broke ground in October 2006 and began leasing in summer 2009. The Main Street side was started after that and completed in April 2012. It was one of the early projects in Rahway’s downtown redevelopment efforts. Park Square also is one of the most handsome and appropriate recent developments, being only four stories tall.
The project relocated the former Cliff Hardware, a boarding house and a thrift shop, among other things on the 2.4-acre site. River Place was built earlier but Park Square was the first significant mixed-used project, with ground-floor retail on the Irving Street side — which has rarely, if ever, been vacant.
Landmark Companies, the seller and original builder of Park Square, still owns property downtown. The Keasbey-based company acquired the former Woolworth building on Main Street in 2008 as well as the building at the corner of Main Street and East Milton Avenue under the name Main Street at Rahway, LLC.
The City Council at its Nov. 12 meeting approved the transfer of Park Square’s Payment In Lieu Of Taxes (PILOT) to Mack-Cali (AR-243) and a settlement with Park Square on a multi-year tax appeal (AR-233). Look for more details on the settlement in a future blog post.
The PILOT stipulates a payment of 20 percent of the property tax bill for the completed project, increasing by 20 percent each year until it reaches 100 percent, which should be 2015 for the Irving Street building and 2016 for the Main Street side. 1 Park Square on Irving Street is assessed at $8.965 million while 2 Park Square on Main Street is assessed at $4.077 million (reduced from $6.05 million in 2010).