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Mid Atlantic R eal E state J ournal Publisher ............................................................................Linda Christman Co-Publisher .........................................................................Joe Christman Section Publisher ..............................................................Michael Campisi Section Publisher ................................................................Elaine Fanning Senior Editor/Graphic Artist ................................................ Karen Vachon Production Assistant ......................................................... Rachel Rugman Office Manager ....................................................................Joanne Gavaza Editorial Consultant .............................................................. Ben Summers Guest Columnist ................................................................... Brian Whitmer Mid Atlantic R eal E state J ournal ~ Published Semi-Monthly P.O. Box 26 Accord, MA 02018 (Mail) 312 Market Street, Rockland, MA 02370 (Overnight) Periodicals postage paid at Rockland, Massachusetts and additional mailing offices Postmaster send address change to: Mid Atlantic Real Estate Journal, P.O. Box 26, Accord, MA 02018 USPS #22-358 | Vol. 24 Issue 13 Subscription rates: $99 - one year, $198 - two years, $4 - single copy REPORT AN ERROR IMMEDIATELY MARE Journal will not be responsible for more than one incorrect insertion Toll-Free: (800) 584-1062 | MA: (781) 871-5298 | Fax: (781) 871-5299 www.marejournal.com The views expressed by contributing columnists are not necessarily representative of the Mid Atlantic Real Estate Journal
By Brian Whitmer NJ Multi-Family Development Pipeline Takes Center Stage
T
he development pipe- line has taken center stage in discussions
about theNorthernNewJersey multi-family market heading into mid-year 2012. Cushman & Wakefield’s data indicates that an unprecedented 17,000 units are under construction or have a high probability of seeing a shovel in the ground over the next 36 months. Looking more closely at these projects, more than 8,000 of these units – a full 49 percent of the total – is located along the Hudson River Gold Coast in Hudson and Bergen counties. Within that submar- ket, Jersey City houses two- thirds of this activity. Anecdotally, Gold Coast class A multi-family vacan- cies are in the low single-digit range. The submarket has everything going for it in order to absorb this huge amount of inventory. Provided that Manhattan remains a regional employment powerhouse, the city’s multi-family vacancy rate stays at 1% or less and
rent growth continues, people will either be displaced or choose to live in New Jersey based on its value proposition. The Gold Coast’s proximity and PATH, NJ Transit and ferry connections to New York City make it the most attrac- tive alternative. We may see a short-term impact on class A rent growth in the Garden State as this abundance of new inventory is absorbed. However, we do not anticipate any backtrack- ing. The demand is there, and in the long term, this is a finite market. There are only so many properties that can be built on the waterfront or within a convenient walk to
mass transit. Regarding the non-Gold Coast construction, the ma- jority is occurring near or at train stations. We are seeing an increase of infill develop- ments that are either rehabs of existing structures or involve the reuse of former industrial sites. Even then, the recycling of land in mature markets typically connects to ease of commuting. The logical question circling this sheer amount of develop- ment is “why now?” Today’s momentum can be traced back to mid 2010, when two shifts occurred in lockstep. First, fundamentals began to continued on page 8A
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