Multi-family projects are going up so quickly in Jersey City — and more are being approved so quickly — that it can be difficult to keep track of the pipeline.
At the beginning of the year, more than 25,000 units were believed to be recently completed, under construction or approved.
Too much?
Not at all, said the experts at the Jersey City Real Estate Summit last week at Harborside.
The reason is simple, said Jared Toothman, the market leader for Lincoln Properties.
“The math works,” he said.
At a time when rising interest rates make it tough to build elsewhere — he said 7% yield on cost of multifamily housing shuts down 95% of the major net saleable areas or NSAs in the country — he told the crowd that Jersey City is an oasis.
Toothman said with construction rates down, compared to New York City, and rising rental rates make Jersey City a good place to be.
“It’s 70% more expensive to build in New York City right now,” he said.
It’s the reason why Lincoln is active in Jersey City, where it has two large sites situated along Marin Boulevard at the border of Hoboken and Newport.
The biggest, 619 Marin Blvd, which was designed by MHS Architects, is entitled for 17-stories, 613 units, and 12,000 square feet of ground floor retail located directly across from Newport Plaza Shopping Center, approximately half mile from the Hoboken PATH station, and less than a quarter mile from Newport Center Mall.
In addition to panoramic views of Manhattan, its amenities package includes a 16,000 square foot programmed and landscaped deck, rooftop pool and lounge.
The second phase, 660 Grove Street, occupying a full block along the border of Hoboken and Newport, has the potential to be the most spectacular development at over 1,000 units.
Jackie Urgo, president of The Marketing Directors, said leasing the properties — any property in Jersey City, actually — won’t be a problem.
Urgo, who has been helping to lease properties in Jersey City for three decades, said the area has gone from one with a few 50-unit properties to one with many having more than 1,000 units — without issue.
“In the past seven years, we’ve handled (many) mega projects,” she said. “We did three towers in Journal Square over an eight-year period representing 1,800 units and there was no absorption issue. We didn’t raid the first building to fill the second or so forth for the third.”
How intent is the interest?
Kushner Companies President Nicole Kushner Meyer said their Journal Square property had a list of more than 2,500 names just from signage in front of the building.
Toothman doesn’t see the desire changing anytime soon.
He again points to the math, noting the greater NYC market reaches more than 20 million people — with New Jersey’s part of the puzzle being larger than San Francisco.
“It’s just not possible to oversupply this region,” he said. “When you hear about oversupply in Jersey City, it’s just ridiculous. … There really is no absorption fear.”
