Much has been written about what is being called America’s biggest real estate development ever: the $20 billion, 5,000-residence Hudson Yards mixed-use community. But just across the Hudson River, a significant number of new and under-construction residential structures dot the New Jersey side of the Hudson’s so-called Gold Coast stretch, including three state-of-the-art mid-rise apartment buildings just completed at the 60-acre (24-ha) Lincoln Harbor mixed-use development.
Ferries are the most convenient transit option for the Gold Coast’s ever-burgeoning population—with the trip from Lincoln Harbor to Pier 78 taking all of six minutes. Indeed, the ferry service and other easily accessible transit systems rank among the key attractions leading to the exceptionally strong lease-ups of the two buildings that have opened for occupancy so far this year at the new three-tower apartment complex dubbed Estuary, notes Gus Milano, managing director with Lincoln Harbor developer Hartz Mountain Industries.
“Demand for our product continues to remain strong because we are in a great urban location near transportation and entertainment,” and also easily accessible to Manhattan as well as many employment centers in the Garden State, Milano continues. “And we offer the right set of amenities that complement our eco-friendly, stylish homes.”
Building A at Lincoln Harbor opened in February 2014, and all 181 units—ranging from studios to three-bedrooms—have been leased. And as of late September, only about 20 of 174 units were available at Building C, which opened in July. Leasing has just commenced on the 227-unit third phase, slated for delivery November 1.
Enhanced ferry service across the Hudson—along with acceptance of MetroCard passesby the Port Authority Trans-Hudson (PATH) rail system in addition to Metropolitan Transportation Authority (MTA) New York City subways and buses—have helped make the Jersey-side Gold Coast a particularly convenient location for residents working in Manhattan, says Bill Lashbrook, a PNC Real Estate senior vice president. In fact, scarce waterfront development sites throughout the metro area are persistently commanding exceptional interest among builders these days, he says.
The Jersey Gold Coast is attracting more residential development, due in great part to its proximity to the high-pay professional employment centers of midtown and lower Manhattan, adds real estate economist Ryan Severino, associate director of research at real estate research firm Reis Inc. It can be quicker to reach downtown from transit-served Gold Coast sites than from higher-rent upper west side Manhattan neighborhoods, he says. Fast-rising rents and prices in Manhattan are spilling over into close-in submarkets as residents expand the search for (relatively) affordable locales that still offer convenient access and plentiful nearby amenities.
This, in turn, has pulled up Gold Coast rents to levels penciling out economically at current development costs of appropriately amenitized, market-rate waterfront projects. Indeed, strong resident demand has already allowed Hartz to increase asking rents at Estuary “several times,” with current rates running from about $2,100 for smaller units, to upwards of $5,200 for larger apartments with views of the Manhattan skyline, Milano specifies.
And, as other active construction cranes along the Gold Coast illustrate, Secaucus, New Jersey–based Hartz Mountain ranks among several developers able to finance high-end new product and capitalize on opportunities that prevailing market conditions present.
Projects just underway along the stretch include what will be the Garden State’s two tallest residential towers, carrying combined construction costs approaching a half-billion dollars—both within a couple blocks of Jersey City’s shoreline.
Mack-Cali Realty, in partnership with Hoboken’s Barry family–controlled Ironstate Development, in August secured $192 million in construction and permanent financing for the 69-story, 763-unit URL Harborside 1 now rising a block off the water (and several blocks south of Holland Tunnel) in the Harborside district. Two sister high rises are also planned for the project.
A month later, developers of the 50-story, 447-apartment second phase of the Trump Plaza development, underway on the next block inland from URL Harborside, secured $140 million in development financing. In contrast to Trump Plaza’s initial tower, the project by New Jersey–based codevelopers Kushner Cos. and KABR Group illustrates that the pre–Great Recession condo construction wave has mostly given way to luxury rentals in the prevailing mortgage-lending environment.
But some developers are offering new Gold Coast condos—perhaps most notably Miami-based Lennar Corp., which is phasing development of 670 spacious attached residences known as the Avenue Collection within master developer Mack-Cali/Roseland Property’s $2 billion Port Imperial mixed-use community stretching north of Lincoln Harbor. Buyers willing to pay well over $1 million for the least expensive units there get easy access to the Port Imperial ferry terminal, also connecting to Pier 78.
“It’s amazing to see all these residential buildings rise along the Gold Coast,” which in decades past was often shunned as unsuitable for well-to-do residents, relates Severino, who passes by Lincoln Harbor while commuting to and from Reis’s Manhattan headquarters.
Hudson County—home to the three exceptionally active Gold Coast municipalities—has become by far the most magnetic multihousing location in the Garden State of late. Through July it accounted for 2,950—more than 27 percent—of the 10,850 multifamily permits issued statewide year-to-date, according to New Jersey’s Department of Labor and Workforce Development. And the year-to-date figure is already approaching the county’s total multifamily permitting for all of last year—which, at just under 3,400 units, amounted to nearly 25 percent of the statewide total.
Again, a key driver of so much Gold Coast residential development is the skyrocketing residential rents and prices in preferred Manhattan and near-in New York City locations. Douglas Elliman Real Estate reports that the rate of apartment rent growth in Manhattan has generally accelerated in recent months, with the median rate surpassing $3,200 in July—up 5.4 percent over the year-earlier level.
And after seven consecutive quarters of growth in residential unit sales on the island, the median unit price year-to-date through midyear amounted to a bit above $935,000—up more than 10 percent over the year-earlier period. And measured on a per-square-foot basis, the average sales price through midyear was up 16.5 percent, to $1,315.
Rents across the Hudson from midtown and lower Manhattan haven’t grown at quite that pace of late—and are now roughly 15 percent below the island’s average. Reis reports that effective apartment rents in Hudson County have crept up from an average of about $2,580 in mid-2012, to a shade under $2,700 today.
Condo prices in the Jersey Gold Coast municipalities predictably remain well below Manhattan comparables—but are also seeing notable appreciation.
According to Walter Burns, a condo specialist associate with the Weichert, Realtors office in Hoboken, the median price in the downtown Jersey City vicinity is up about 9.5 percent over the past year to $520,000—with the average per-square-foot price rising 16.4 percent to $566. And the median price in Hoboken is up nearly 6 percent over the past year to $545,000, with the per-square-foot average ahead almost 9 percent to $571.
And all this activity is coming not even two years after Hurricane Sandy’s storm surge flooded many of these very cities and townships.
As Lashbrook says, architects and engineers working on projects in threatened districts today look to mitigate potential storm damage by elevating electrical components and other critical equipment well above flood lines. And some are adjusting plans by locating lower-finish uses such as parking and storage on vulnerable at-grade and below-grade spaces, rather than the more costly buildouts (retail, management offices, and such) that might have otherwise occupied those spots pre-Sandy.
As for Estuary, the design team, where possible, elevated water pumps and electrical systems two feet (0.6 m) above the flood level—rather than the initial plan’s one foot (0.3 m)—while taking steps to waterproof lower-level walls. The developers also connected common-area lighting and HVAC systems to emergency generators, and installed backflow-prevention mechanisms to ground-level floor drains.
Brad Berton is a Portland, Oregon–based freelance writer specializing in real estate and development topics.