Gold Coast: Do Capital Markets Sources Consider it the Sixth Borough?

Jun 16, 2017
by Josh Anderson

FORT LEE, New Jersey – New Jersey’s Gold Coast has its fair share of deals. In the last 24 months, the region has witnessed $6.2 billion in office sales, $5.2 billion in apartment sales and $2.4 billion in retail sales. Is that enough to justify the term “the sixth borough” in the capital markets? Or is Jersey’s Gold Coast its own kind of monster, with its own kind of investors?

Jose Cruz, Senior Managing Director for HFF errs more toward the latter option. When comparing it to the likes of Manhattan, Cruz says that investors definitely view it differently. Cruz says that, when looking at the whole Gold Coast, most of the capital and transaction activity is geared toward Jersey City and Hoboken.

HFF’s Jose Cruz and KABR’s Adam Altman participated in CAPRE’s New Jersey Gold Coast North & Bergen County CRE Summit on June 14 in Fort Lee.

“There’s a lot of deals we don’t even know about,” says Cruz. “Partnership buyouts for example, that don’t make the paper, but still are sizable and might be worth $200-$300 million. So there is a lot of capital flow through these markets, and that’s for obvious reasons: rent flow, transportation, population growth.”

Cruz also points out that there’s also a lot of product available for sale. But in terms of the kind of product, there is a clear division. He points to the multi-family for illustration. “Look at North of Hoboken, for example,” he says, which includes West New York, Weehawken, North Bergen, Edgewater, Cliffside, and Fort Lee. “In that market, the average age [of a tenant] is higher. The multi-family market is viewed toward views and amenities. However, down in Jersey City, it’s geared toward the urban feel – nightlife, transportation, and access into the city.”

Cruz acknowledges that Edgewater and West New York still have transit, but reminds us that it’s not as direct, so each section has its own focal point. More specifically, the amenities refer to things like pools, which basically every complex in the region has. He also mentions The Duchess, a new facility that just finished, which has a veranda and a spa. “They’re really catering to an active adult community, rather than the millennial generation that we see in Hoboken or Jersey City,” says Cruz.

Overall, the difference, according to Cruz, is that more capital is geared toward Hoboken and Jersey City than their northern counterparts, but when an opportunity presents itself in the northern part of the market, it will still be met with interest. “There is an institutional group that will look at the Northern part of the waterfront,” remarks Cruz. “but I will say it’s not as deep as the group that will look at properties in Hoboken.”

Continue the New Jersey CRE conversation with CAPRE. View agenda and registration information for CAPRE’s Newark CRE Summit on July 27 >

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