How Real Estate Will Boost NJT Ticket Sales in 2016
Listen closely. Is it choo-choo, crunch, dig? Then you're hearing the abundant development popping up alongside NJ transportation, sure to be a hot topic at Bisnow's 5th Annual New Jersey State of the Market event Feb. 17, where experts will discuss the 2016 big picture. Here's a sneak peek at what our speakers are working on (hint: a lot of TOD).
KRE Group has its hands in some of the largest projects in New Jersey and Pennsylvania, reports president Jonathan Kushner. Its bread and butter: building quality residential properties that give tenants no reason to leave, he says. Think plenty of amenities and transportation options in "vibrant urban settings." In Jersey City, Journal Squared's first tower is under construction on a site that will include three towers; the building will total 538 units in a 640k SF, 53-story tower. KRE topped off on the building in December, and it will open in Q4.
It’s also finishing up Hudson Lights with Tucker Development in Fort Lee, which will be 276 apartment units and 125k SF of retail (above). In Bethlehem, PA, KRE, along with The Silverman Group, has opened Phase 1 of Madison Farms, which includes 294 apartment units and 123k SF of retail; the remainder of the project—additional apartments, townhomes and single-family dwellings—is going through approval. And several starts are planned for 2016. Last week, the firm broke ground on 100 units plus retail in Madison, while in the Lehigh Valley, it will soon begin construction on a 400-unit project with 40k SF of retail.
KRE Group also has number of new projects that are going through approval and design, including the second tower at Journal Squared, which should break ground next year. (Above is construction activity at the first tower; all three will total 2.4M SF.) "For New Jersey, particularly along the Gold Coast, Manhattan is the mother, and we’re feeding off the excitement and energy there by locating our properties near ferries, PATH Stations and other mass transportation options," he noted. While Manhattan and Brooklyn options can be more than double the price, it’s not just about value anymore, he says; areas like Jersey City have come into their own as lifestyle destinations.
Ingerman is involved in both market-rate and affordable multifamily development, reports development principal Lara Schwager. It has a project in Bayonne under final approval, and upon completion, will include 140 units on Broadway, a block from light rail. While the firm likes the location because of transit proximity, “We see Bayonne as the next phase of development along the Gold Coast,” she says, particularly since Jersey City and Hoboken are so developed.
Also breaking ground around that time is Ingerman’s 70-unit, market-rate apartment project in River Edge, another TOD (above). On the affordable side, Ingerman had eight projects that received tax credit funding in 2015, the largest number for any developer, in locations including Ocean, Middlesex, Burlington, Essex and Hunterdon counties. “Many municipalities are reaching out to us to help them satisfy their affordable housing needs,” she notes. Much of this activity has been spurred by the state Supreme Court ruling on the longstanding COAH litigation. Another six communities are in the pipeline, and overall, Ingerman has over 700 apartments in NJ expected to break ground in 2016 and over 500 units in various stages of pre-development.
2016 continues to be the same MO for Ingerman—finding well-placed assets, especially TODs for commuters and young professionals seeking an urban lifestyle. It’s also focused on finding quasi-suburban communities, much like its 104-unit The Collings project in Collingswood (above), which finished in 2014. “You don’t see many luxury rental projects such as these in South Jersey, but it’s a great walking community with wonderful restaurants." It's also near a PATCO station, taking residents directly into Philadelphia. However, it’s getting harder to find such sites. As for-sale product comes back, market-rate apartment developers are finding much more competition for land.
Access to transportation hubs has also been significantly driving the office market, says SJP Properties EVP of leasing and marketing Jeff Schotz. “Places like Newark, Hoboken and Jersey City are way more attractive than they were five years ago,” he notes. Access to transportation will be heavily considered as SJP acquires sites for redevelopment and development. In such markets, you’ll see opportunities to scrub and rebuild Class-B or older buildings—or in some cases, totally knocking them down to put up a new office building and integrating a mix of uses, he says.
Hinging on that trend is a flight to quality, which has particularly benefited SJP Properties these past few years. (Above, its Waterfront Corporate Center in Hoboken.) “In our 35-year history, we’ve always focused on developing the best office buildings and managing them to the highest degree,” Jeff says, noting that over the past two quarters, statistics have shown a drop in Class-B absorption and an uptick in Class-A absorption. In SJP’s properties, which extend throughout Somerset, Morris, Essex and Hudson counties, any office space available has seen significant activity, whether 8k SF or 100k SF. Interested tenants span from tech companies to Fortune 500 corporations, and include a mix of inter-market relocations and NYC-based companies looking for more affordable space.
Hear more from our panelists at Bisnow's 5th Annual New Jersey State of the Market event Feb. 17. The venue will be announced soon, so stay tuned!