Comparing North Gold Coast to Other New Jersey and NYC Markets

Jul 14, 2017
by Josh Anderson

FORT LEE, New Jersey – Comparing sub-markets in New Jersey’s Gold Coast region can be both dizzying and redundant. We’ve got Hudson County vs Bergen County, the Western Suburbs vs the Waterfront, Hoboken vs Jersey City, just to name a few examples. However, perhaps the most interesting is simply contrasting the Northern Gold Coast to everything else. As some industry insiders recently shared with CapRate, there are clear distinctions to be made.

For example, Solomon Kinraich, Managing Principal for MLK Real Estate Capital says that, though we are all obviously seeing a lot of transactions in the New York City market (where a lot of stabilized multi-family transactions are taking place), in New Jersey, especially Bergen County, there is obviously a very strong focus on the retail side, as well as the different property classes.

“Lenders are typically more open-minded, working with sponsors who have really strong opportunities and strong deals to underwrite,” he says. “Obviously, in Hoboken and Jersey City, we’ve seen a lot more activity in multi-family on the development side, but in Bergen County there’s not as much development.”

Justin Levitt, Principal at PGIM Real Estate Finance, mostly concurs. He says that everyone knows that the New York City market is softening on the multi-family side. “You’re seeing at least one-month concessions,” he begins. “We’re seeing landlords pay the leasing commissions. It’s shifting, especially south of 96th Street. It’s shifting from landlords being in demand to tenants being in demand – you’re just trying to keep your tenants, rather than letting somebody go because you want to raise their rent by 10%-15%.”

So what’s that doing overall? According to Levitt, these trends are manifesting themselves all throughout New York City, as well as the outer boroughs. “With the change, unfortunately, no one knows exactly what is going to happen in some of the outer boroughs as a result of new supply,” says Levitt. “So you’re seeing some properties in Brooklyn now, where rent is starting to stabilize, and still starting to see, especially as you go a little farther out, still going up, as well as in Long Island City, even though you still have north of 15,000 units coming online in the next twenty-four months.”

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