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Listen to this articleAfter moving last year to end its Secaucus headquarters lease four years early, struggling apparel retailer The Children’s Place is recommitting to 500 Plaza Drive.
The longtime tenant will remain at the 466,496-square-foot office property in a downsized capacity, JLL exclusively told NJBIZ March 5. The Children’s Place will occupy 120,000 square feet under the new agreement. Previously, its footprint covered 197,000 square feet at the building managed by Manulife Investment Management for Manulife US REIT.
The news is the latest in a flurry of updates for the embattled retailer. The Children’s Place started March with a $78 million infusion from its new owner, Mithaq Capital. About two weeks before, the Saudi Arabia-based investment firm acquired a 54% controlling stake in the company. Meanwhile, an additional $130 million lifeline came from investment specialist Gordon Brothers in February.
In July 2023, The Children’s Place announced efforts to transition to a more digital-first business. As part of that plan, the company said it would cut 17% of its workforce.
Additionally, it opted to terminate its headquarters lease to “reduce its current space configuration and capitalize on lower prevailing market rates that would have been applicable under the existing lease, which included escalations in occupancy costs.”
JLL Senior Managing Director David Stifelman and Executive Managing Director Timothy Greiner (also head of New Jersey brokerage) serve as exclusive agents for 500 Plaza Drive. The pair represented Manulife; Savills Tri-State President David Goldstein and Vice Chairman Gregg Najarian represented the tenant.
Upgrades coming
While The Children’s Place had moved to cut its occupancy agreement short by four years, the new lease is a long-term commitment, Stifelman told NJBIZ. It continues from the termination date of May 2024.
Over the summer, The Children’s Place said a move would enable it to capitalize on prevailing tenant-favorable market conditions. According to Stifelman, because the property is not encumbered by a mortgage, the landlord was able to fund a full market concession package.
Ownership also announced a new capital improvement campaign for 500 Plaza Drive. As a result, the building’s HVAC system will be replaced. And the covered, 1,474-vehicle parking garage will receive upgrades.
Stifelman said the landlord will also renovate the conference center and gym. Improvements are currently in the design phase; completion is expected by the third quarter of this year.
“Some of the commitments to The Children’s Place were specific to them and the remaining commitments are part of Manulife’s continuous upgrades to their property to maintain first class status,” Stifelman said.
A ‘sought after’ address
Three full floors are open to tours for potential tenants. According to JLL, they feature floor-to-ceiling windows and flexible floorplates. Some seventh-floor offices also offer private outdoor space.
The property is situated within Harmon Meadow, a 200-acre campus that includes restaurants, hotels, offices and apartments within an accessible master planned community. Located at the crossroads of the New Jersey Turnpike and Route 3, Midtown Manhattan is 3 miles away and Newark Liberty International Airport 8 miles away.
A shuttle service also runs weekdays at peak hours to and from the Secaucus Junction Train Station.
“We are pleased The Children’s Place has chosen to remain at 500 Plaza Dr. as it continues to execute its business plan. The property is a superior asset in the Secaucus market and this lease reaffirms it as one of the area’s premier corporate addresses,” commented Tripp Gantt, CEO of Manulife US REIT.
Major tenants of 500 Plaza Drive include Hartz Mountain Industries and Quest Diagnostics. Hartz is the former longtime owner of the 11-story building that houses its global headquarters.
Manulife US REIT acquired the property for $115 million in 2017.
“As we continue to adjust to changing office dynamics, it is very rewarding when tenants double down on a property that has successfully supported their business objectives and we are thrilled to complete this transaction with The Children’s Place,” Stifelman said. “We are seeing a great deal of interest in 500 Plaza Dr. and Manulife’s plans will further elevate the building and ensure it remains a sought-after address in the market as occupancy trends continue to evolve.”
In 2022, JLL announced plans for its Flex coworking space at property. There were no updates on the project available at this time.
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