Manulife US REIT has signed a management and licensing agreement for Flex by JLL to take up 15,407 square feet of office space at 500 Plaza Drive in Secaucus, New Jersey.
The space represents 3.3% of the building’s net lettable area (NLA).
This agreement includes an option for Flex by JLL to lease a further 20,451 square feet in two phases, bringing the combined floor plate to 35,858 square feet or 7.7% of the asset’s NLA by 2023.
In all, the three phases are expected to achieve a stabilised rent premium of about 30% to the market, said the REIT.
Flex by JLL is JLL’s enterprise-grade flexible space solution. Its space at Plaza will offer flexible private offices, coworking space, meeting rooms, team suites and virtual offices.
In total, the three phases will cost about USD6.8 million to fit-out over two years.
Phase 1, comprising mostly flex desks and private offices, is expected to be completed in April 2023, while Phases 2 and 3 will comprise mostly enterprise suites.
“With the flex space business model having evolved from the traditional serviced office and coworking spaces pre-COVID-19, the new structure will allow MUST to enjoy greater upside potential by sharing a majority of the operating profits with the operator”, said Tripp Gantt, CEO of MUST’s manager.
“This partnership has tangible benefits for MUST. We believe that this product presents a compelling value proposition for tenants to justify paying a rent premium for the flexibility and amenities offered by the flex office solution”.
“This would also allow MUST to maintain its relationships with tenants and creates a real possibility of new flex tenants eventually converting into traditional tenants. Above and beyond these benefits, integrating flex space into Plaza will also drive foot traffic in the building”, he added.
MUST was last done on the Singapore Exchange at USD0.50, which presently implies a distribution yield of 10.44% according to data on the Singapore REITs table.