CAPRE’s Northern New Jersey & Gold Coast Investment Outlook Preview: Silverman’s Paul Silverman Pledges Full Steam Ahead
JERSEY CITY, NJ — SILVERMAN has created over 1,000 residences and over 500,000 square feet of commercial and light industrial space, translating to thousands of jobs and new homes. What started 35 years ago as an architectural vision for Jersey City’s downtown has grown into a deep affection for its diverse, dynamic residents. Founded by brothers Eric and Paul, SILVERMAN is a company comprised of caring and friendly people, proud of the roots established in 1981, which continues its tradition of building Jersey City’s best collection of apartments, stores, offices and schools. In preparation of CAPRE’s Northern New Jersey & Gold Coast Investment Outlook, CAPRE connected with Paul Silverman, Principal, to talk about the latest trends and trajectories in Jersey City.
CAPRE: Thanks for chatting with us today, Paul. Tell us about Silverman’s latest activity in Jersey City.
Silverman: We have a small building we just bought, across from Hamilton Square in Jersey City. It’s on the side of the old St Francis hospital complex. We’ve built 230 apartments, 15 retail spots, a couple of restaurants around there, and then this little building came up for sale a couple years ago. It took us 2 years to buy it, and we rented out all 3 apartments in the commercial storefront already. It’s about three-fourths complete now and sometime in the next few weeks the apartments will start filling up. It’s been fun to see the quick velocity of such a little building in this neighborhood.
CAPRE: What direction is the market trending? What kind of activity are you seeing?
Silverman: All of our apartments are full. We’re at 99.6% occupancy with only one available apartment right now. We’re seeing good market rates – they’re increasing 3-4% every year and filling up quickly. 39% of our residents come from Jersey City and the rest are coming from all over the world. We’re seeing a lot more international residents – a lot of French, South American, Japanese and Canadian residents. It’s great to see, it makes it interesting.
CAPRE: What other demographic trends are on the rise?
Silverman: We’re also getting more empty nesters, who are selling their homes elsewhere in New Jersey and coming back to the city. Every month we’re seeing more and more. That demographic is great – they’re mature, they’re not throwing wild parties, and they have money. Most of them are still working, but have the time to travel a bit, so it’s a really good demographic to get that balances out all of the young people that are here. It’s a positive trend that we’re seeing more and more of. Many of them are getting rid of their cars, and instead are Ubering or taking the train to New York City.
CAPRE: What challenges is Jersey City at this point in time?
Silverman: Well the schools are great here, but they’re having financial troubles. They’re getting cuts from the state, so we’ve got to help them get better funding. That’s definitely a challenge. Capacity on the PATH train is another one – they’re working on building bigger platforms and finding technology to run trains more frequently, so that’s going in the right direction. On that same note, more and more offices are opening up in Jersey City, so few people are heading to New York City. We’re just trying to keep our buildings fresh and well-built, to make it a more and more attractive places to be.
Silverman: Seeing so many people – it’s great to catch up with your colleagues, as well as meet some new faces. And you’ll definitely get some new information at this event. I’ve been in this business for so long but I still learn stuff. Really I enjoy seeing all of the people I know though.
CAPRE: What is the most unique thing about Jersey City, when compared to other nearby submarkets?
Silverman: The diversity of the population. That’s the most unique thing. We have people from so many different countries, whether you go into a classroom or a restaurant, it’s such an interesting place to be. The number two thing is the value. We’re half the price of New York City. People that have family west of here, it makes it so much easier to get there, rather than have to head out of New York City on a Friday night – you’re already out of the city.
CAPRE: Let’s talk about the economic cycle. Are you bullish or bearish on the economy?
Silverman: We’re going full speed ahead. Our first building is just about underway. We have an old parking garage from St. Francis Hospital, we’re going to demolish it and build a 9 story mixed use building on that site, starting in July, with plans to open up 18 months from now. There will be ground floor retail space and second-third floor office space, with 60 rental apartments upstairs.
We’ve been doing this a long time, so we know that if you build it, it will fill up. Even if you have a dip along the way, you built it anyway, you hang tight, and it will get better. We have a confident view about that. Things go up and down, but eventually we’ll all go up if we keep building. The banks are still lending, the rates are still low. Right now, our rate is under 4%. Even with all that’s going on in Jersey City, relative to the region, it’s small. We have 10,000 apartments here, compared to New York City which is adding 20,000. That’s why we confident – it’s still very small.
CAPRE: What is top of mind right now in the Jersey City commercial real estate arena?
Silverman: Infrastructure is a continual topic. Having the capacity to add, whether it water, sewer, electric, good schools, enough retail or enough restaurants. As we add people, do we have the infrastructure to support it? If you add a 300-apartment building, will there be restaurants for them to get to without waiting in long lines? Will there be enough bicycles in the bike rack? Will there be empty seats on the PATH train?
CAPRE: So what’s next then? Will Jersey City rise to these challenges?
Silverman: I think we’re getting it. The local hospital is adding rooms. They’re moving their office space out of the hospital and adding rooms. Jersey City built a new public school last year and is talking about building more. It takes time to catch up, but we’re seeing the infrastructure improving. On another note, the governor just added a new tax credit for filming movies. So we’re seeing more and more big films here, which is fun. A few weeks ago, we saw a film crew here in Greenville, which is kind of a gritty neighborhood. That’s exciting.
CAPRE: Indeed. Thanks for your time. We’ll see, and hear from, you in Jersey City on June 20th.