Look for Clues for New Jersey’s Multi-Family Future in NYC Market

JERSEY CITY, NJ — The Gold Coast is inextricably linked to New York City. And sometimes that means we have to wait for a “delayed reaction” on this side of the Hudson. Fortunately, CapRE’s Second Annual New Jersey Gold Coast North & Bergen County CRE Summit considered all of this when crafting its content, and one of the centerpiece topics of discussion during the panel Gold Coast North & Bergen County 360: How are Developers and Investors Approaching Opportunities in the Next Frontier? was this very topic. One of the panelists, Steve Simonelli. Senior Director at HFF, was happy to provide a broad overview of how things are heating up in New Jersey, even if it’s on a slow simmer.

“I think we are seeing concessions in Hoboken right now in properties that we are working on. So they’ve come to the market,” he revealed. “Not necessarily with no rent growth, but with much more tepid rent growth than we have seen over the last few years. Jersey City is still somewhat of an anomaly, but it will catch up at some point, just due to its own competition.”

Simonelli then conceded that rents to tend to get a little bit softer the further north you go up the coast. “What I will say though is that, I was out for dinner last night with the guy who runs our multi-family team in New York City, and the feeling there is a lot more positive right now,” he revealed. “The oversupply, I don’t want to say coming to end, because it hasn’t come to an end, but the development is getting a little bit lighter, the investment is probably up ten-fold this year than it was at this time last year, and there is a much better feeling in the market.”

“A deal that they just brought out, and this is something that we could never even imagine in New Jersey, but the top ten bidders were all condo converters,” he revealed. “So that is something that tapered off for a little bit, but is now coming off strong and is now pushing up pricing in Manhattan again. So although the rents haven’t hit the bottom yet, I think that there is a much more positive feeling now than there was at this time last year. And we may still go down a little bit more, but as Adam said, that’s going to translate into, in five years from now, we’re going to be in a really good position here as well.”

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Banner Photo (L): Steve Simonelli, Senior Director, HFF