New York Life Insurance Co. is in talks to lease three floors at Goldman Sachs Group Inc.’s office tower on the New Jersey waterfront, a deal that would bring the once-underused building to full occupancy.
New York Life would move at least 325 employees into the Jersey City tower starting in early 2016, said Jason Weinzimer, a spokesman for the insurer. The negotiations are for about 115,000 square feet (10,680 square meters) in the 1.4 million-square-foot building at 30 Hudson St., according to plans made public Tuesday by New Jersey’s Economic Development Authority.
Goldman Sachs built the Cesar Pelli-designed tower, the tallest in the state, in the early 2000s in part to house traders who were scattered among downtown New York buildings. Employees balked at the move across the river, and the company in 2010 opened a new headquarters on the southern tip of Manhattan, with its own trading floors. The 781-foot (238-meter) Jersey City skyscraper was meant to be occupied only by the bank.
“Filling that building with other tenants is really a significant achievement for the waterfront,” said James Hughes, dean of the Bloustein School of Planning and Public Policy at Rutgers University in New Brunswick, New Jersey. “The financial industry never really came back after the Great Recession, and Goldman had the greatest single block of vacant space in that market.”
New York Life received $33.9 million in incentives over 10 years from New Jersey’s Economic Development Authority to move 325 jobs, currently in an office in Parsippany, and add another 300 employees to the Jersey City location. Without the benefits, the insurer could move the jobs to the New York Life headquarters building at 51 Madison Ave. in Manhattan, or to the upstate town of Sleepy Hollow, New York, the authority said in a statement Tuesday.
Tiffany Galvin, a spokeswoman for Goldman Sachs, declined to comment on the talks with New York Life. The bank decided to rent out about 320,000 square feet of underused floors in Jersey City in 2013, following Hurricane Sandy, she said. The company leased temporary space to Guardian Life Insurance after the insurer’s offices on lower Manhattan’s Water Street were flooded in the storm.
Late last year, Royal Bank of Canada’s capital-markets unit took 207,000 square feet in the Jersey City tower in a 15-year lease agreement, data from CoStar Group Inc. show. The bank is paying $38 to $40 a square foot, according to a person with knowledge of the lease, who asked not to be named because the details are private. Galvin and Elisa Barsotti, an RBC spokeswoman, declined to comment on rents.
The rent is consistent with the average $38.77 a square foot landlords on New Jersey’s Hudson waterfront were seeking for top-quality space at the end of the fourth quarter, according to a report from brokerage Cushman & Wakefield Inc.
In suburban Morris County, where Parsippany is located, landlords are asking $29.51 for Class A offices, and the overall vacancy rate is 29.6 percent, more than double the 13.7 percent rate on the Hudson waterfront, which also includes Hoboken.