D’Agostino Family Breathes New Life Into New Jersey Office Building
Landmark Deal for Company and New Jersey
A New Jersey office complex hit hard by the financial crisis has been acquired by the family that developed the three buildings about a half-century ago.
JD Companies owned by the D’Agostino family, joined forces with Capstone Realty Group LLC to buy Continental Plaza for $63 million in August. For the D’Agostinos and their partners, the purchase in Hackensack is a chance to restore prestige to what was once considered a trophy property.
“We saw buildings underperforming that needed work, and we felt we could have a hand in bringing them back and getting them to prominence again,” said James R. D’Agostino, a principal whose father developed Continental Plaza.
JD Cos. and Capstone are planning to make about $10 million in improvements that include new heating and cooling systems, energy-efficient lighting and a fitness-centre overhaul, according to the family and Mitchell Adelstein, managing partner and founder of Capstone. The firms also plan to create a collaborative workspace and add several conference rooms as well as more food vendors in the lower concourse connecting two of the buildings, Mr Adelstein said.
The D’Agostinos have been involved in real estate since the late 1940s when Mr. D’Agostino’s father, also named James, established JD Construction Corp. in New Jersey. He saw the residential migration from New York City to New Jersey and realized businesses also were looking for a less-expensive option to the city, Mr. D’Agostino said.
JD Construction put up the 12-story glass buildings without preleasing or securing anchor tenants. The firm took control of the property with a long-term lease for the land under two of the buildings. It purchased the third parcel.
The first building filled up gradually; the others were leased at a quicker pace, attracting such tenants as ABC, the Internal Revenue Service and the accounting firm Ernst & Young.
“It was a landmark deal for the company and New Jersey as well,” James J. D’Agostino said.
In 2004, investors that included Normandy Real Estate Partners bought the complex for about $109 million. Over the next few years, some members sold their interests to other investors. Then in 2009, during the financial crisis, an $88 million commercial mortgage on the complex was placed under a special servicer and the property later went into foreclosure, according to Trepp LLC, which tracks loans in commercial mortgage-backed securities.