150 KSF NJ Office Asset Maxes Out With New Lease

17-17 Route 208 North. Image courtesy of Keystone Development + Investment

Keystone Development + Investment has inked a deal with Summit Health for the health-care network to occupy nearly half of 17-17 Route 208 North, an approximately 150,000-square-foot office property in Fair Lawn, N.J. Summit Health signed a lease for roughly 70,600 square feet, bringing the occupancy level at the Class A office building to 100 percent.

Leasing an office building up to maximum capacity in Northern New Jersey is no simple feat in the pandemic era, when the average direct vacancy rate, according to research from a fourth quarter 2021 Colliers report, continues to exceed 20 percent. However, 17-17 has a not-so-secret secret or two.

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“The property is perfectly positioned between both suburban and urban environments, with easy public transportation and driving access,” Randy Johnson, regional director with Keystone Development + Investment, told Commercial Property Executive.

Located in the Bergen County submarket, 17-17 sits within roughly 12 miles of the George Washington Bridge and within close proximity of rail stations providing easy access to Manhattan. Keystone has owned the three-story property since 2014, when it acquired the asset from Mack-Cali Realty for approximately $12.5 million as part of a $230.8 million, multi-state portfolio transaction. Soon after the acquisition, Keystone upgraded 17-17, originally developed in 1987, with the addition of such amenities as an on-site cafeteria. More recently, the company submitted the property to a multimillion-dollar renovation program that yielded a bevy of updates.

Second acts

Now, Keystone has another vision for 17-17, and Summit Health will play a big role in the endeavor. “Right now, we have approximately 12 tenants at 17-17 Route 208 North, a medical office conversion with plans to be fully converted over time,” Johnson said.

The demand for medical office space is quite strong in Northern New Jersey, as evidenced by activity in the traditional office market. Following Atlantic Health Systems’ 533,000-square-foot, office and medical office lease renewal and expansion in Morristown in mid-2021, one of the largest leasing transactions of its kind to close in the Garden State in years, deals involving medical tenants taking traditional office space continued to crop up regularly.

Recently, in the fourth quarter of 2021, Englewood Health committed to approximately 50,700 square feet at 910 Sylvan Ave., part of the Sylvan Corporate Center office complex in Englewood Cliffs.

“While many occupiers are contemplating their future space needs, the health-care and life science industries are expanding in New Jersey as the focus on human health and wellness persists. Health-care systems looking to expand have taken major blocks of vacant space in traditional corporate office buildings,” according to the Colliers report.

Summit Health’s lease at 17-17 will commence on July 1, 2022, and the health-care network will open the new medical location in the second quarter of 2023. Colliers’ Sam Horowitz and Michael Tesser represented Keystone in the lease transaction, while Cushman & Wakefield‘s Marc Rosenberg stood in for Summit Health.