Northeast Real Estate Business

NOV-DEC 2015

Northeast Real Estate Business magazine covers the multifamily, retail, office, healthcare, industrial and hospitality sectors in the Northeast United States.

Issue link:

Contents of this Issue


Page 34 of 64

34 • November/December 2015 • Northeast Real Estate Business M A R K E T H I G H L I G H T: N E W J E R S E Y New Jersey and New York City em- ployers have been expanding their ranks this year, allowing New Jersey residents to recognize new opportuni- ties as economic growth in both areas continues to pick up steam. In North- ern New Jersey, employment growth continues to follow a positive course as companies in New York City are at- tracted to the region's lower operating costs and highly educated workforce. This year, companies are on track to add 29,000 employees, representing a year-over-year expansion of 1.4 per- cent. This will be the largest gain in jobs created since 2000. Job creation has been highest in the leisure and hospitality industry, as well as educa- tion and health services sectors, where 12,200 new jobs were created in the frst half of the year. Newly employed professionals in search of affordable housing are opt- ing for rentals in Northern New Jer- sey, where average rents can be half the cost of the greater New York City area. As a result of this growing de- mand for Northern New Jersey rent- als, developers have expanded the pipeline of multifamily projects to more than 12,000 apartments with completions scheduled through 2017. Developers are on track to deliver over 7,900 apartments this year, repre- senting the widest pipeline and fastest pace of construction in several years. The quick pace of construction will come to fruition this year, with deliv- eries rising to its highest pace in the last decade. More than two-thirds of construction will center on Jersey City and other parts of Bergen and Hud- son counties — especially Hoboken — that provide renters with quick com- mutes into Manhattan. The average residential mortgage payment is more than $2,200 per month, whereas the average rent pay- ment is around $1,650 per month. This affordability gap will continue to sus- tain an environment with a prevalence of renters and will support additional asking rent growth in the near future. High net absorption will limit change in the multifamily vacancy rate following construction deliveries. In fact, vacancy is projected to fall 20 basis points year over year in 2015. For comparison, strong demand for apart- ments in the metro enable vacancy in the metro to fall 70 basis points for the quarter and the year. Beneftting from their proximity to New York City, Hudson and Bergen counties post the lowest vacancy rates. In all, 2015 will mark the fourth straight year of multi- family vacancy levels under 4 percent in Northern New Jersey. Turning to the interplay of supply, demand and vacancy changes at the consumer level, the average effective rent in Northern New Jersey is an- ticipated to rise to around $1,955 per month through the end 2015, even as deliveries more than double. Hudson and Bergen counties are expected to record above-average rent gains. That said, apartments in Hudson County remain much more affordable than comparable units in New York City, offering rents $1,000 less than those in the city. The attractiveness of the Northern New Jersey rental mar- ket has allowed for four consecutive years of effective rent growth, which will continue through the end of 2015 as the rate of deliveries trails behind rental demand levels. Investors looking to leverage his- torically low interest rates for greater yields have been actively seeking to invest capital into multifamily assets in the Northern New Jersey metro. In- stitutional investors targeting newer properties along the Hudson water- front remain the dominant force in the metro. Additionally, individual inves- tors with knowledge of local markets have become increasingly active in the past year as they search for attractive assets along major transportation cor- ridors. Strong investor activity and rising apartment values have brought out more willing sellers, and, as a re- sult, transaction velocity rose 10 per- cent during the last year. At the end of second quarter, capitalization rates had declined 20 basis points from the previous four quarters. The antici- pated rate hike by the Federal Reserve also contributed to this increase in activity, which has shown no sign of slowing as we head toward the end of 2015. Nat Gambuzza Vice President Investments, Marcus & Millichap NORTHERN NEW JERSEY MULTIFAMILY CONTINUES MOMENTUM, DRIVEN BY EMPLOYMENT GROWTH WILLIAMSBURG, VA | New Town Shops on Main 500 to 10,000 SF Available; Two 9,000 SF On-site Land Parcels Available for Sale for Office/Retail • 253,000 SF center on Monticello Avenue in the heart of a 365- acre mixed-use community near the College of William & Mary • Join Barnes & Noble, American Family Fitness, Jo-Ann Fabrics, Panera Bread, Buffalo Wild Wings, Bonefish Grill, Regal Cinemas, Charming Charlie, and more ENOLA, PA | EAST PENN PLAZA 2,400 SF Available • 39,135 SF neighborhood center featuring KinderCare, Metro Bank, Sherwin Williams, H&R Block, Hair Cuttery, CVS, and others • Located at the high-traffic intersections of Wertzville Road, East Penn Drive, and Southmont Drive • Enola is situated in East Pennsboro Township, Cumberland County and is a suburb of Harrisburg JACKSONVILLE, NC | CROSS POINTE CENTRE 2,000 to 6,000 SF Available • 196,214 SF power center • Join Marshalls, Lane Bryant, Ashley Furniture, 2nd & Charles, Michaels, Old Navy, Shoe Carnival, and more • Located on Western Boulevard in Onslow County near Coastal Carolina Community College, Jacksonville Mall and US Marine Corps Camp LeJeune GLASTONBURY, CT | ADDISON VILLAGE 4,000 SF Available • 12,900 SF community center featuring Piatti Ristorante & Bar, United Bank, and Ming Bao Chinese Restaurant • Located on Hebron Avenue (Route 94) and Village Place just off Routes 2, 3 and 17 in Hartford County • Within close proximity to Pratt and Whitney, Hartford Brainard Airport and Manchester Community Tech College CANAAN, CT | STOP & SHOP PLAZA 3,500 SF Available • 71,000 SF neighborhood shopping center anchored by Super Stop & Shop and Family Dollar • Located at the intersection of Main St (Rt 44) and Railroad St (Rt 7) in affluent Litchfield County • Located in the northwest corner of the state, bounded on the north by Bershire County in Massachusetts and on the east by Duchess and Columbia Counties in New York ADDITIONAL RETAIL OPPORTUNITIES AVAILABLE IN: Vincennes, IN | Massena, NY | Elizabeth City, NC | Bloomsburg, PA | Mechanicsburg, PA | Old York, PA DRC Retail Availabilities Contact: Kelly Voss | 1224 Mill Street, Building D-Suite 103, East Berlin, CT 06023 T 860.561.0121 F 860.521.4323 | Northern New Jersey Multifamily Rents Northern New Jersey Multifamily Construction

Articles in this issue

Links on this page

Archives of this issue

view archives of Northeast Real Estate Business - NOV-DEC 2015