CAPRE’s Northern New Jersey & Gold Coast Investment Outlook Preview: Singh Properties’ Vivek Singh Says Jersey City Has Some Work to Do to Reach its Potential

JERSEY CITY, NJ — Mr. Vivek Singh boasts over fifteen years of experience in real estate investment, financing, management, construction and development. As a Member of Sandalwood Holdings, LLC he is involved in the management of an extensive commercial and residential real estate portfolio throughout northern New Jersey. Mr. Singh is also the Executive Vice President of Operations for CVV Construction & Development, LLC where he is responsible for residential and commercial construction. Mr. Singh is a licensed real estate attorney in New York and New Jersey with his own law firm and formerly with the law firms of Gibbons P.C. and Podvey Meanor, P.C. In advance of CAPRE’s Northern New Jersey & Gold Coast Investment Outlook, we connected with Vivek to discuss the hottest topics and latest opportunities in Jersey City.

CAPRE: Thanks for chatting with us Vivek. Let’s talk about Jersey City. What are you seeing on the ground in terms of activity?

Vivek Singh, Principal, Singh Properties

Singh: The market for the last four years has been flattening and declining in terms of rent in Hudson county. Vacancy rates and consumer debt have been going up. So we’ve been anticipating a recession. We’ve been trying to make sure we have as few vacancies as possible, making sure our apartments are properly amenitized, and are trying to turn over leases without giving rent increases because there is so much over-supply in the market that tenants are becoming very picky and choosy and much more price conscious especially since so much data is now available publicly.

CAPRE: Let’s talk more about the over-supply. What’s happening there?

Singh: A lot of people enter the Hudson County market, and see its proximity to Manhattan – and the they think that the market operates like New York City. They even call Jersey City the 6th borough. But as robust as it appears, it’s nothing like the other five boroughs. Aside from the luxury buildings with numerous amenities that have been built, which are commanding the highest prices in each sub-market – and even those buildings have significant vacancies. There’s not enough migration into Jersey City to fill those buildings, so they’re cannibalizing their own luxury market.

CAPRE: In what way?

Singh: They’re giving significant concessions. It’s just not as robust of a market as New York City. And the rents, when they do increase, they increase much more gradually then in New York City. But I think that because a lot of the press out there, saying that outside investment is aggressively coming into New York City, has been driving real estate prices up. But just because your acquisition prices have gone up, doesn’t mean your renter base has changed. That perception is now leading to lawmakers coming up with laws that are solutions in search of problems.

CAPRE: What solutions are those?

Singh: For example, right now, they’re looking at the short-term rental industry, like AirBnB and the like. They’ve come up with incredibly substantive legislation which would dismantle the entire industry. They’re taking like-minded approaches to various forms of other real estate in Jersey City particularly, right now and it’s very dangerous to our economy, because our economy is not as robust as New York City. At a time when Jersey City, for example, is in $120 million shortfall in its obligation to teachers, when they have experienced the highest municipal tax revenue, attacking small business and property owners and eliminating those revenue streams, is very fool-hardy. And those are the things I’m now starting to see.

CAPRE: What else is happening, legislatively?

Singh: There’s a tax on rent controlled landlords. There’s a movement to require private property owners and developers to provide affordable housing, and I have two major problems with that. One is that affordable housing has its own gambit. So if you’re an affordable housing developer, that’s supposed to be subsidized development. Now, the city is saying that if you want to do with your property what you were already entitled to do, we’re going to make you — without that subsidy — provide affordable housing.

The second problem I have is that the city had public housing which accommodated over 10,000 families, and they destroyed all of that public housing. So after they had maintained it so poorly, spending millions of dollars of tax dollars in a year, they violated federal law and destroyed all of those buildings. They displaced all those families. And instead of taking responsibility, they’re saying private property owners should.

CAPRE: Where does Jersey City go from here?

Singh: We’re seeing a very anti-property owner movement, a very anti-small business owner. For the first time, I’m starting to see folks unite about this and mobilize. Because enough is enough. This city government has been notorious for not managing these finances appropriately. So instead of having a robust economy, where our debts are being paid, we’re seemingly entering a situation where, year after year, we will have obligations that can’t be met, where the solution is going to be to sell off city owned property. That’s not a sustainable practice. And I think that, if our current lawmakers cannot find sustainable solutions, then they all need to go. And I think those who are particularly waging a tax against the people who are providing revenue, they need to be scrutinized.

CAPRE: Tell us more about Jersey City’s strengths – where does it shine?

Singh: Jersey City has developed a significant foodie culture, in large part from these short-term rentals who have guests coming while visiting New York City. So Jersey City is well poised to become one of those cities, provided that the lawmakers see the positives about how all of these different, small players interact and provider a good brand for Jersey City and a good basis for its economy. Hopefully that can dampen the recession that I think a lot of us are concerned is coming soon. That’s something we’re obviously looking at a lot, and it makes us very concerned about the investment horizon.

CAPRE: What is unique about the Jersey City market?

Singh: Jersey City is the most diverse city in the United States, which creates a lot of opportunity. Unlike a lot of cities in Hudson County, which are predominantly commuter cities for people who work in New York City, Jersey City has its own significant economy. And I think that the vibrancy of downtown Jersey City, which has been the most vibrant area for quite a while, is starting to spread to the Heights and Journal Square. If developers are supported and they’re providing off-site improvements of contributions like part, providing they’re allowed to create density, then parts of these cities will not be recognizable in the future.

CAPRE: So what’s the bottom line for Jersey City? What’s essential for it to get to the next level?

Singh: The things these communities want – more restaurants, cafes, walkability – will happen. But there’s a give and take that needs to happen with lawmakers and developers to make sure each side isn’t talking past the other. You’ll see it spread into Bergen, Lafayette and the Greenville section. The changes made so far are what has brought so much attention to Jersey City. If nothing had changed since the days I grow up, very few people would come here to live, work, dine or shop. That’s what we need to remind the city – you can’t have both. You can’t fight the development and think you’re going to get the amenities. Because density is what brings those wonderful amenities that make a walkable culture possible.

CAPRE: Finally, what are you looking forward to about CAPRE’s Seventh Annual Northern New Jersey & Gold Coast Investment Outlook?

Singh: Well there’s a lot going on and a lot to talk about. There’s a lot of multi-year development, a lot of significant development in lots of Hudson County towns. I feel like the developers we’re seeing in Jersey City, they’re the most sophisticated that you see this side of the river. They’re building great projects, they’re updating the housing inventory for Jersey City, for the foreseeable future, which is going to lead to neighborhood amenities.

CAPRE: Great, Vivek. We’ll see you in Jersey City on June 20th.