Millennials Driving the Conversation in Gold Coast Multi-Family Arena
by Josh Anderson
JERSEY CITY, New Jersey – As with most multifamily markets across the country, millennials are the hot topic of conversation on the Gold Coast. Though the why and how aren’t universally agreed upon, it’s clear that they’re not only impacting the market, they’re in some ways upending it.
According to Lee Bloch, Senior Vice President of Development for Carmel Partners, the historic low in homeownership is a huge driving force. “That has a very big impact on the renter pool,” he says. “There’s also a very large trend across the country – especially the Northeast – of urbanization. Because of that rend, we’re pulling people out of single family homes and into apartment, due to quality of life. You’ve got Gen Xers, Millennials, and empty nesters selling their homes who want better quality of life. They don’t want big homes, they don’t want the maintenance.”
Russell Tepper, Senior Managing Director, Northeast, Mill Creek Residential Trust says that, though his firm is always focused on Millennials, lately he’s been spending considerably more time on the baby boomers, who are an ever-increasing population among his consumers. He says, “The vast majority of baby boomers that are renters by choice in a number of our communities are looking for all the same qualities in a living experience that the Millennials are. The audience for us has grown dramatically which only makes the demand for multi-family in urban settings even greater, which allows us to not be as concerned about growing supply in Jersey City or the Gold Coast. We’ve all read “is there too much supply in the market?” but that’s not something we’re really concerned about.”
Tepper thinks that if you can find good real estate in a place like Jersey City and finance it, there will be demand for it, and Jose Cruz, Senior Managing Director, HFF, who is also a resident of the Gold Coast himself, agrees. He likes the convenience, the restaurants, and the activity. “I live and work here,” he begins. “From an investor perspective, the Gold Coast — specifically Jersey City and Hoboken more so than Edgewater/North Bergen — when you look at what investors are looking for, has all those things. Younger, average-age professionals, high incomes, transportation, quality product.”
Cruz says that despite significant new construction — which he estimates at 6300 units in some form of development and another 2000 that could get started in the near term — there’s still good absorption. “On the waterfront, that’s 53 units a month, taking into account the last 18 months. And there’s still rent growth,” he explains. “With all that new product coming in there’s still rent growth. That signals a very strong market.”