New Jersey’s Multifamily Growth Is Spurring Financial Activity
Businesses in the New York and New Jersey areas are driving the economy in multiple aspects. When companies hire on new employees, these families need affordable housing. According to one report, the workforce is adding 29,000 employees this year, representing growth of 1.4 percent over last year. This is the largest gain in the number of jobs created since the year 2000. The leisure and hospitality industry is driving the growth, but education and healthcare have also boosted employment.
Professionals who are seeking housing that is easily accessible to the city of New York often look in Northern New Jersey, simply due to the costs. The New Jersey multifamily rental costs are often half of what they would be in Manhattan. Somerset County has an extremely low vacancy rate in multifamily units. The demand for rentals outnumbers the availability. Developers have identified the problem. Construction is beginning on 12,000 units in New Jersey to meet the growing demand.
One of the most exciting acquisitions is that of Castle Lanterra Properties, which is building a 224-unit at River Park at Raritan. Castle is planning to rehabilitate the property, and it secured funding to that end through Freddie Mac. The property is an excellent location and has a great potential to provide upside rents in a prestigious place, while still being much cheaper than the same place in New York.
River Park is just 60 miles for New York City and only 50 from Philadelphia, which means that it could draw new families who are working in either city. The River Park has easy access to the two main interstates as well as multiple retail centers and community amenities. There is a club room, heated pool, and fitness center within River Park at Raritan, plus outdoor facilities like a basketball court.
Castle is working with JLL Capital Markets to move forward with the project. Historically low interest rates make investing in the New Jersey commercial real estate market more attractive. The housing market does not show signs of slowing down. There have been four consecutive years of growth in the New Jersey rental industry. The CRE market is a safe place to invest and see a return on that investment. Quite quickly, once construction is completed.
In years past, the multifamily unit has not been the domicile of choice. Practically every financial advisor will tell people that it is cheaper and better for the future to invest in a family home. Yet, home ownership is much lower today than it was just a decade ago. One report suggests that young people, the millennials, just don’t have the money for the down payment.
Millennials are putting off buying homes. Whether this is due to a change in thinking, an unwillingness to buy a permanent home, or because of financial hardships, it’s increasing the need for multifamily units. New York City and Philadelphia continue to be a powerhouse in driving the economy in the region, which has made Northern New Jersey seem like a safe haven for investors in the CRE market.
New York City Landlords are Going Green
At the rate that we are using the Earth’s resources, experts predict that they will be completely depleted by 2050. Awareness around this issue has caused the world to rally around the ideas of sustainable capitalism and “going green.” While this used to be the cry of a dedicated few, now entire industries are changing their practices to help preserve the world as we know it.
Included in this effort are New York City landlords, who are steadily changing their practices to provide more sustainable green options for the 69% of New York City Residents who rent. In September of 2014, Mayor Bill de Blasio committed to reducing greenhouse gas emission by 80% below 2005 by 2050, which means retrofitting every public building in the city and some of the 20,000 private buildings, including multifamily buildings, government-assisted affordable housing, and rent-stabilized buildings.
These plans include the implementation of several changes, some of which are being used by buyers as a competitive edge to attract tenants, and others which are implemented simply in response to the mandates from the city:
Air quality control: Air quality has become a huge selling point in buildings, which are citing better ventilation and filtration thanks to HVAC and other mechanical upgrades. Public institutions such as the Apollo Theater, Barclays, and Carnegie Hall are early movers in these types of retrofits.
Improved energy use: Buildings of over 25,000 square feet will benefit from improved lighting that is less likely to deplete energy than current electrical systems. These buildings will also be required to track and report their energy use to show compliance with energy efficient guidelines. This is beneficial on several levels as it will create 3,500 jobs and will provide an answer to the emissions problem, three-quarters of which is attributed to the energy used to heat, cool, and power buildings.
Better building-tenant relationships: Studies aren’t just focused on the relationships between the buildings and the Earth, they are also looking at the relationships between the building and its tenants—measuring the quality of life based on the satisfaction of people who live there. Known as the WELL Building Standard, these measurements were created after 6 years of collaborative research by medical institutions and the building industry, and take into account ratings in seven sectors—air, water, nourishment, light, fitness, comfort and mind.
Don’t forget LEED: The precursor to The WELL Building Standard, LEED—Leadership in Energy and Environmental Design—was devised by the United States Green Building Council (USGBC) to evaluate the environmental performance of a building and encourage market transformation towards sustainable design. In addition to saving money, LEED certified buildings use less water and energy, and reduce greenhouse gas emissions. In its fourth version, according to the website, LEED focuses on several aspects of building, including materials and taking a closer look at their composition to understand the longer term effects on human health and environmental impact. Performance-based, means that LEED standards are becoming more concerned with environmental quality and the effect that has on the comfort of the consumer in the building. Smart grid, places a greater focus on integrating responsive systems into the building and construction process, and final, water efficiency is being implemented to more closely evaluate water use within a building.
As time goes on, fueled by both necessity and consumer desires, more landlords will start to follow suit and abide by the mandates being set by these guidelines. To stay up to date with these trends and others affecting the real estate market.
Is Jersey City the 6th Borough?
With a short ride on Path, Jersey City-to-New York commuters have a convenient trek to work or play. As one of the most walkable cities, Jersey City (JC) is seeing a rejuvenation in the way of new business and multifamily retail and residential structures.
The Streetfilms.org documentary reports that JC leads in efficiency as well. Citi Bike already has a presence in Jersey City, and the membership is valid in all of New York as well. And with bike lanes drawn along main thoroughfares, the city is quickly making a move away from automobiles. JC is showing a move towards sustainability and social responsibility which is a move towards an increasing city pride.
The city initially picked the nickname for its proximity to New York City, with thousands of Jersey City and Hudson County residents commuting across the Hudson every day. The two cities do have an obvious cross-cultural exchange, but Jersey City residents have been fighting to stop playing second fiddle to its sister city of New York. In fact, some even resent the moniker.
There is no doubt that JC has a personality all its own, so that resentment is not without merit. The city combines a neighborhood feel in sections like the Grove or the “Village”, and a considerably diverse and urban feel in neighborhoods like Journal and McGinley Square. The Newport area, the closest Path stop into New York, boasts luxury hotels, a mall, beautiful views of the New York skyline, and a quaint lighthouse. Additionally, the influx of tech businesses and employees are creating a nerve center quite different from just a decade ago when the area was full of abandoned warehouses. Also, a $6.7 million proposed renovation project to restore the Lincoln Park fountain is just a glance at more vibrancy to come.
In other words, JC has grown up and is quickly and boldly stepping out of NYC’s shadow as just a commuter city.
For those of you who are considering moving to JC as opposed to paying top dollar to live in Manhattan or Brooklyn, JC may be a viable option. The commute to New York is approximately 35 minutes but don’t call JC a commuter town — or the 6th borough anymore.
New Jersey Coast Saved from Abandonment
The developer has also agreed with Regal Cinemas to build a 55,000-square-foot movie theater complex, and is in talks with about 20 other potential retail tenants. Over few months to 10 years, the development promises to add 750,000 square feet of office space, 1,000 hotel rooms, and 2,000 apartments with a view of the Raritan River.
By 2017, The Pointe will have its own highway interchange, adjacent Garden State Parkway and U.S. 9 and Route 35 nearby. Together, these highways will carry roughly 600,000 people a day to and from jobs in New York City or to Jersey Shore towns to the south, according to the New Jersey Turnpike Authority, the state’s Department of Transportation and Maser Consulting, an engineering firm working on the project.
The developer’s chief executive, Brian. O’Neill said, in an interview, “One hundred percent of New Jersey shore visitors pass through this intersection if they are coming from the five boroughs of New York City, northern New Jersey and southern Connecticut.”
“In summertime, there are days when there are a million cars, or two or three million people, coming through this intersection,” he said, “which makes for one of the most spectacular opportunities for retailers to expose themselves to their clientele.”
Over-populated New Jersey has long sought to redevelop these contaminated tracts formerly used for industrial purposes. O’Neill bought the Sayreville site for $80 million in 2008, twenty years after it was abandoned by National Lead (NL), which had manufactured paint pigment there since the ‘30s. In early 2014, the Environmental Protection Agency directed the company to pay $79 million to clean up a 40-acre lagoon, where Bass Pro Shops will build its new store.
Cleaning up the lagoon was more challenging than O’Neill and his son imagined,
“We were unaware of the depth and consistency of the material that was in the lagoon,” Brian O’Neill Jr., said. “In some places it turned out to be 10 feet thick of this acidic paintlike substance, like quicksand.”
The solution was to inject 38,000 tons of portland cement into hundreds of cells in the lagoon, an operation that took a year and a half and has now created a stable site where Bass Pro Shops can build. Remediation on other parts of the site is continuing, and some environmental permits are still pending, Mr. O’Neill Jr. said.
When the project is complete, Mr. An abandoned area of coastal New Jersey is undergoing a revitalization that will bring construction of housing, retail space and office space 30 minutes from Lower Manhattan.
O’Neill Properties Group will be breaking ground on the nearly 6 million-square-foot project called The Pointe. The 418-acre site, south of Staten Island, is at the heart of a highway network that carries around 400,000 vehicles a day directly past the site.
The groundbreaking will make way for the anchor retail tenant, Bass Pro Shops, to build a 200,000-square-foot store. The store is expected to open in June 2017 as the first stage of a planned 2.4 million square feet of retail space.
O’Neill Sr. said, 221 million people annually will drive by almost a handful digital billboards measuring up to 44,000 square feet — bigger than the billboard at Times Square.
With seven digital media towers, alongside the Garden State Parkway, the development will create 226,000 square feet of digital signage – a major opportunity for advertisers to reach millions of people at a lower cost to the advertisers.
The new development received a nod of approval by Kennedy O’Brien, Sayreville’s mayor, who said NJ officials approved it for its mixed-use project/residential element. That offers Sayreville the prospect of reviving its depressed center, he said, which was built more than 100 years ago and has scarce parking and very little economic opportunity.
Sayreville, which formerly made bricks for the construction of Manhattan and munitions for World War I, is a middle-income community of almost 45,000 people. Homeownership is high, foreclosures are low and church attendance is almost mandatory. Continues O’Brien, “It’s a Norman Rockwell American town.”
And the tax benefits and increase of revenue doesn’t hurt.
“This will provide a great injection of extra money into our tax base,” Mr. O’Brien said. “It will provide employment opportunities, and Bass Pro Shops will provide a great place for husbands to go when their wives go shopping.”
6 Historical Walking Tours of NYC
New York City holds one of the most vital histories in the United States because of its proximity to Ellis Island and the Nation’s Capital. There are many ethnic groups in the US who got their start in the Big Apple. Taking a walking tour of NYC is a great way to explore the heritage of the community, enjoy some great food along the way, and appreciate the local customs and traditions. Here are 6 walking tours that encapsulate old New York City History.
Greenwich Village has been home to many of the greatest artists in the United States. Famous authors and musicians, such as Jimi Hendrix and Edith Wharton have at one time called it home. Historical figures like Aaron Burr and Tom Paine had moments that were life-changing. The Beat Movement began in Greenwich Village, and has been called the cradle of the LGBT movement.
The Original Multi-Ethnic Eating Tour
Nothing explains the differences and similarities in cultures than understanding their cuisine. In this two-hour tour, participants enjoy the markets and shops that highlight the Jewish, Italian, and Chinese communities in New York City on the Lower East Side. The multi-ethnicity of the community tells a lot about how different cultures approach their meals and families.
In the “Triangle Below Canal Street” or TriBeCa, walkers enjoy a full array of architectural styles in NYC. TriBeCa was once a mecca of warehouses and industrial buildings that were later transformed into lofts and residences for artists. See sites associated with Robert DeNero and Cornelius Vanderbilt, and understand how this section of NYC became what it is today.
Historic Lower Manhattan
See where it all began, on the former site of the Dutch Fort Amsterdam where George Washington and Alexander Hamilton made their marks upon history. Enjoy the architecture and people associated with the world financial capital and NYSE while traveling through this section of New York.
America’s Museum: Art and History of the Metropolitan
The Metropolitan Museum is the same size as the Empire State Building, two million square feet. It has one of the most extensive collections of art in the world. To get the most out of a visit to NYC, enjoy a walking tour of the Museum that explains the heritage and architecture of the building, and points out some of the most iconic pieces of art in its history.
The Upper East Side
Explore the most luxurious sections of NYC when taking one of the guided tours that includes the Frick Mansion, the Whitney Museum, and the Park Avenue Armory. See the sites where the Vanderbilts, the Tiffany’s, and the Morgans made their mark on the city, while understanding the transformation that took place from the time of the 18th century when the area was mostly farmlands, to the development of what it is today.
Commercial Real Estate Heads Out to Sea
New York City, known for its innovation and extravagant real estate ventures, will now take the commercial real estate market towards a more ‘liquid’ direction: Pier 57. Also known as the SuperPier, the previously desolate part of New York is about to get a facelift, causing business giants like Google to brim with anticipation. The floating hub is opening new doors in the CRE market for large and small occupants alike, raising talk that it will be one of the most sought after locations in the city.
While still in the early stages of approval, blueprint and development is all but set. The design firm, Youngwoo & Associates, has created a plan that promises a new venue that is a cross between SoHo and Central Park, with a little bit of Lower Manhattan thrown in. While this sounds promising, resurrecting a declining pier is no easy task.
Developers have spent years perfecting their plans and are currently seeking city approval to begin construction. As new hurdles are discovered and overcome, the planning team continues to push for a 2018 opening date.
The SuperPier will be multi-leveled, featuring mixed office real estate and retail space with a large park covering the top. Between 200,000 and 300,000 square feet of space will be devoted to Google’s office use, while another 170,000 will be converted into famed celebrity culinary personality Anthony Bourdain’s food hall. There will be additional options for commercial real estate, including permanent spaces as well as converted shipping containers for retailers who need low-cost accommodations. The goal is to create options for tenants of all sizes to encourage a unique environment for shoppers to enjoy.
Atop the pier will sit nearly 2 acres of park space that will be able to hold 2,600 people at once. This portion of the development has been carefully planned to allow for the least amount of distraction to nearby residents while still accommodating the events the endeavor is hoping to host — Tribeca film screenings being one.
The central focus of the park is a restaurant pavilion encased in green glass that will match the facade of the building. With an underbelly of LED lights, the effect will reportedly give off a moon lit feel.
CRE tenants, retailers and business owners will have access to the abundant benefits the carefully designed park has to offer: over 13,000 square feet of green space; walls of lush hydrangea and clematis blooms; stadium-like seating; and a glass-walled restaurant will create the perfect environment for events of all sizes.
With cutting-edge detail and thoughtful development, the redesigned Pier 57 is set to become one of the next best commercial real estate event. As plans advance, there are likely to be more businesses climbing aboard this mixed-use giant enterprise.