RED BANK: OCEANFIRST TO BUY HOV HQ
Hovnanian’s headquarters in Red Bank, as seen from the borough library. (Photo by John T. Ward. Click to enlarge)
By JOHN T. WARD
OceanFirst Financial plans to buy the Red Bank headquarters of homebuilder Hovnanian Enterprises, redbankgreen has learned.
Jill Hewitt, OceanFirst’s investor relations director, confirmed to redbankgreen Thursday that the Toms River bank holding company has contracted to buy the 65,200-square-foot building on West Front Street for its own use.
She declined further comment pending release of information to employees next Tuesday.
Hovnanian chairman and CEO Ara Hovnanian informed employees via an emailed video message Wednesday afternoon that the company had received, and accepted, an unsolicited offer for the gleaming glass-and-brick structure overlooking the Navesink River, and would be relocating to Matawan around the start of the New Year. The identity of the buyer was not previously disclosed, however.
The deal, first reported by redbankgreen, came to light shortly before the homebuilder reported a net loss of $337 million in its latest fiscal quarter, largely as a result of $290 million in non-cash accounting adjustments. That’s compared to a loss of $474,000 in year-prior quarter.
In his video message, Hovnanian did not disclose the sale price, but said the deal would generate “several million dollars of profit” and give the company more than $25 million to invest in its national homebuilding operations, he said.
“The reality is that the Red Bank building is just a little too expensive for us today,” he said. “Our performance has been lagging, and we need to consider every avenue we can to improve our results.”
Hewitt declined to disclose the sale price.
Mayor Pasquale Menna told redbankgreen he had been aware that OceanFirst was looking for headquarters in town but was not told in advance of the deal by either the buyer or seller. Both are publicly traded entities.
“I’m glad that a major financial institution has found what they’re looking for in Red Bank,” he said. “I think it would be a banner move for them.”
If completed, the deal would appear to be a boon to Red Bank, ensuring no vacancy period in a large structure and no interruption in tax revenue. The property, assessed at $16.5 million, is expected to generate $364,000 in property taxes this year, of which the borough and its library would retain $98,000, according to tax collector Ashlesha Deshplande.
“It’s a win-win for Red Bank, and more power to OceanFirst,” said real estate dealmaker Geof Brothers, of Red Bank-based Brothers Commerical, who was not involved in the transaction. “What a fantastic corporate headquarters. That’s a major statement.”
The 65,200-square-foot building, with parking underneath, sits on a sloping 1.56-acre parcel that extends from West Front Street to the edge of the river at the northern terminus of Maple Avenue.
Brothers said the building is, “if not the finest class-A office building in Monmouth County, it’s certainly number one or two.” With its own parking facility in a walkable town strapped for parking, “it’s a phenomenal building in a phenomenal location,” he said.
OceanFirst bills itself as the largest community bank headquartered in central and southern New Jersey. Among its branches is one at 73 Broad Street.
Hovnanian also owns property on the northeast corner of West Front Street and Maple Avenue. In 2015, the company’s KHov unit filed a concept plan for two buildings of four townhouses each, but no formal application was ever submitted. Menna said a prospective buyer has informed him of its intention to acquire the site, which abuts the borough library property.
Through KHov, Hovnanian also owns a gravel parking lot off Boat Club Court overlooking the Monmouth Boat Club. The half-acre parcel has approval for 15 condos that were never built, and was briefly under option to Jetsun Enterprises, which had hoped to incorporate it into a plan to redevelop the borough-owned tennis courts in Marine Park. That plan never came to fruition.
