The Real Deal New Jersey Market Report 2015 by The Real Deal

Northern NJ’s record sales

Celebs on the move

Ofﬁce leasing stuck in neutral

Jersey malls buck the national trend

Hoboken’s hot waterfront

NY vs. NJ: the big rivalry

NEW JERSEY MARKET REPORT JUNE 2015

RANKING NJ’S TOP RESIDENTIAL DEVELOPERS THE OTHER KUSHNER

SEALING THE DEAL

ANOTHER NEW BROOKLYN?!

Jonathan Kushner’s new $1B project will change the skyline

More brokerages open doors in Northern Jersey

Inside the inﬂux of artists transforming Jersey City

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BFF>=B:M> H<<NI:G<R Ma^:o^gn^<hee^\mbhgGC'\hf HK <:EE +)*'+*)'))22 Price subject to change without notice. Visit Lennar.com or see a New Home Consultant for further details. Not an ofﬁcial offer for NY state residence. Agent must be present with client upon initial registration to receive commission. 3% commission paid on purchase price minus incentive at closing of home. Plans and elevations are artists renderings and may contain options which are not standard on all models. Lennar reserves the right to make changes to plans and elevations with out prior notice. Lennar Sales Corp. - Broker. Copyright © 2015 Lennar Corporation ®. Lennar and the Lennar Logo are registered service marks of Lennar Corporation ® and /or it’s subsidiaries. 5/15

NEW JERSEY MARKET REPORT JUNE 2015

ike the ‘49ers back in the day, who set out on a quest for glittering precious metals, New Yorkers are increasingly heeding the call to “go west,” this time around heading to New Jersey’s Gold Coast, where they’re prospecting for bigger homes at more reasonable prices per square foot. In our inaugural New Jersey Market Report, we cross the Hudson in hot pursuit of those in the real estate industry who have followed the rush of homebuyers, renters and investors to Northern New Jersey, hoping to find some nuggets of success along the river’s shores. Both new brokerages and established ones, like Douglas Elliman, are opening new offices or looking at expanding their footprint in the region, as we detail in our story on page 24. And while the pricing of real estate in the area may be a bargain compared to what buyers are seeing in Manhattan and Brooklyn, brokers are seeing record-breaking sales in counties including Hudson, Bergen and Essex — read about that on page 8. Speaking of that über-popular other borough, we’ve found yet another “new Brooklyn” to add to the growing (and growing) list: Jersey City. We look into the emerging cultural zone there on page 14, and in our Q&A with Jonathan Kushner (page 12), he talks about the gigantic new development he’s building in the city, Journal Squared. His company, Kushner Real Estate Group, ranks #2 in our list of top Hudson County developers on page 30. We also look at what’s driving the huge growth in Northern New Jersey’s industrial market (page 18), and why the same can’t be said of the office market there (page 38). And, for a lighter read, see page 28 for a look at the celebs buying and selling Jersey real estate, including Sean Combs and “The Real Housewives of New Jersey” star-turned-jailbird Teresa Giudice. We hope you enjoy the issue!

PRICIEST PADS The Frick Mansion is listed at a cool $49 million

as sales across Hudson, Bergen and Essex counties break records

18 22

STANDING TALL Jonathan

Kushner on his $1-billion Jersey City development

INDUSTRIAL MARKET HEATS UP E-commerce

makes Jersey warehouses hot commodities PRIVATE SCHOOL BOOM

Influx of families drives demand for larger homes in Northern N.J.

24 CLOSING THE DEAL

New brokerages hit the Gold Coast

Natalie Miniard of JCity Realty

Sean Combs

EDITOR’S NOTE

18 Frick Drive in Alpine, N.J.

Members of Shen Wei Dance Arts perform at Mana Contemporary. Photo by Joe Schildhorn.

THE NEW BROOKLYN? Artists flock to Jersey City for deals on housing and studios

Stuart Elliott, Editor-in-Chief

STARGAZING Celebrities buying and

selling homes in North Jersey WWW.THEREALDEAL.COM JUNE 2015 3

Gold Coast skyline

PUBLISHER AMIR KORANGY EDITOR-IN-CHIEF STUART W. ELLIOTT EDITORIAL DEVELOPMENT DIRECTOR HEATHER GROSSMANN EDITOR VALERIE BLOCK ART DIRECTOR GREGORY CULLEN CONTRIBUTORS THERESA AGOVINO, ANNE FIELD, C. J. HUGHES, JENNIFER WHITE KARP, KERRY MURTHA, ELAINE POFELDT, MIRIAM KREININ SOUCCAR

CONSTRUCTION ZONE A look at the top developers in Hudson County and the skyline-altering projects they’re working on 1100 Maxwell Place

PRODUCTION COORDINATOR VICTORIA TUTURICE DIRECTOR OF MARKETING OPERATIONS YOAV BARILAN NATIONAL SALES DIRECTOR ROSS FOX NEW JERSEY SALES DIRECTOR NICK MASCARO

Home building has increased in N.J.

TAKING STOCK Teardowns are back in vogue as new home sales pick up steam

ROOMS WITH A VIEW

The Hoboken waterfront is seeing lots of luxe development

ADVERTISING SALES ERAN EVRON, ROBERT STEARNS, NICKI CHADI, SIGALIT LEVI, MARCUS GUEST, CHRIS CUOMO, BARRY HOLLAND, JUSTIN O’GARROW DIRECTOR OF DIGITAL SALES JUNAID ZAHID ASSOCIATE WEB DEVELOPER AMIR GHAHERI FINANCE DIRECTOR/HR KENNETH CYRUS

FACING HEADWINDS

Office leasing market is still in recovery mode

TRADING BUILDINGS

Top 10 property transactions over the past year

Gov. Andrew Cuomo

Gov. Chris Christie

OFFICE MANAGER VIRGINIA DURSO CIRCULATION PAUL DESTANKO DISTRIBUTION MITCHELL NEWMAN, PATRICIA HOFMANN, FORERO EXPRESS ATTORNEY BARRY J. FRIEDBERG TRACHTENBERG RODES & FRIEDBERG LLP

Westﬁeld Garden State Plaza

HIGH-END SHOPPERS Wealthy

residents help Jersey malls buck national trends 6 JUNE 2015 WWW.THEREALDEAL.COM

ACCOUNTANTS WILLIAM T. MCCALLUM, CPA, P.C., CHRISTINE WANG

BY THE NUMBERS

Breaking down the NJ vs. NY rivalry

The Real Deal is a registered trademark of Korangy Publishing Inc. Copyright © 2015. Call 212-260-1332 or e-mail news@ therealdeal.com. Warning: It is illegal to photocopy or reproduce any part of The Real Deal without express written consent. For reprints and duplication rights, call 212-260-1332. Principal ofﬁce: 158 West 29th St., New York, NY 10001. The Real Deal is published monthly. Annual subscriptions cost $95. Send check or money order to 158 West 29th St., New York, NY 10001.

PRICEY PADS w New Jersey Market Report

Living large: Northern NJ home values hit record-breaking heights Wealthier counties are seeing many cash buyers, which is good news amid fears of an interest rate hike BY KERRY MURTHA

Chris Rock

ew Jersey’s residential luxury market, particularly in wellheeled Bergen, Hudson and Essex counties, is topping the charts when it comes to expensive real estate. Realtors say a steady uptick in demand spurred by consumer conﬁdence and low interest rates has contributed to some record-breaking sales along New Jersey’s Gold Coast and Northern New Jersey overall. And many high-end buyers are shelling out cash, according to brokers, which bodes well for the market even if interest rates rise. There is an overall sense that value has caught up with asking prices, contributing to a boost in sales. “There’s a growing interest in properties from Jersey City to Edgewater [in Bergen County],” said Richard Steinberg, a top producing broker with Douglas Elliman who is currently acting as a consultant to sell the Garden State’s priciest residential property to date. The massive stone mansion at 18 Frick Drive in Alpine — one of the most expensive zip codes in the country and home to buyers like Richard Steinberg, singer Britney Spears Douglas Elliman and comedian Chris Rock — comes with a whopping $49 million price tag. The 30,000-square-foot, four-level home, built by developer Richard Kurtz on the former Frick estate, sits on six acres and boasts 12 bedrooms, four kitchens, a grand ballroom trimmed in 18-karat gold, a sports bar that overlooks an indoor basketball court and a 65-foot salt water swimming pool. Kurtz purchased the entire Bergen County estate in 2008 for $58 million and then subdivided it into several luxury properties, building the mansion on one parcel for his family. He opted later to sell it but not before opening its doors to host the engagement party of former Facebook

8 JUNE 2015 WWW.THEREALDEAL.COM

The 30,000-squarefoot stone mansion at the Frick Estate in Alpine, N.J. boasts an indoor basketball court. Britney Spears

president Sean Parker. The most expensive recent sale in Bergen Prices have steadily increased in Bergen was a home at 153 Truman Drive in Cresskill, County in the past ﬁve years. From 2010 which sold for $6.5 million in October. Built to 2012, nine homes sold for more than to resemble a European castle of limestone $5 million, with 11 surpassing that price in TOP BERGEN COUNTY HOME SALES PRICE ADDRESS TOWN the past two years — six 153 Truman Drive Cresskill in 2013 and ﬁve in $6.5 million 141 Truman Drive Cresskill 2014, according to the $4.2 million 15 Stone Tower Drive Alpine New Jersey Multiple $4.1 million 19 Rio Vista Drive Alpine Listing Service. $3.8 million 95 Edward Street Demarest Currently there are $3.7 million 38 homes with asking Source: Data from Zillow on closed sales for the six-month period ending April 2015. prices greater than $5 million. CONTINUED ON PAGE 10

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CONTINUED FROM PAGE 8

and stucco, the six-bedroom, eight-bath home includes stone patios, a billiard room, a sun room and an inground pool. “Buyers have the money and they are ready to purchase,” said Tracy Devine, a regional vice president at Coldwell Banker Residential Brokerage, which serves New Jersey and Rockland County. “Instead of 10, I’ll now get 50 interested buyers in the first few days of a listing.” And those buyers are plunking down unprecedented sums. A Weehawken mansion, located on the site where Alexander Hamilton fought his infamous duel with Aaron Burr, sold in October for $6.2 million — a record for Hudson County. The 7,200-square-foot house at 8 Hamilton Avenue, custom built to the specifications of the original owner in 1950, spans two plots of land and is perched at the end of the King’s Bluff cliff — allowing for an unobstructed panoramic view from the George Washington Bridge to the VerrazanoNarrows. It is by far the property’s greatest selling point. “If you stand on the corner of 42nd Street and Times Square and look west, you can actually see in the distance the white house on the hill,” said Lisa Poggi, who arranged for the property’s sale, along with fellow broker Henry Song from Douglas Elliman’s Sroka Worldwide Group. Hoboken has had four of the five priciest deals in Hudson County in the past six months.

“Those twenty-somethings that moved to Hoboken in the ’90s for the nightlife now have families and need larger spaces.” — Henry Waller, Vice President at Toll Brothers

At $3.2 million, this three-bedroom condo at the W Hotel and Residences is Hoboken’s most expensive listing.

There are currently 33 active properties with asking prices of $1 million or more in Hoboken, according to Poggi. “Buyers can get a larger space here than they can in Manhattan but for the same price point,” she added. Poggi is currently showing Hoboken’s most expensive listing, Apartment 2502 at the W Hotel and Residences, a 225-room boutique lodging with 40 private residences that overlook the Hudson River. The threebedroom condo, which includes all the hotel’s TOP HUDSON COUNTY HOME SALES amenities, is on the PRICE ADDRESS TOWN market for $3.2 mil$6.2 million 6-10 Hamilton Avenue Weehawken lion. $5.5 million 700 Monroe Street Hoboken Among the hottest $3 million 612 Garden Street Hoboken properties in town are $2.5 million 727 Bloomﬁeld Street Hoboken the Toll Brothers two $2.4 million 208 Newark Street Hoboken new waterfront condo developments, dubbed TOP ESSEX COUNTY HOME SALES Maxwell Place and the PRICE ADDRESS TOWN Hudson Tea. $3.5 million 91 Western Drive Short Hills Maxwell Place, $3.4 million 163 Highland Avenue Short Hills located on the former $3.1 million 32 Fairﬁeld Terrace Short Hills Maxwell House coffee $2.6 million 7 Brantwood Terrace Short Hills plant site, is already $2.6 million 148 Forest Way Essex Fells two-thirds sold, with Source: Data from Zillow on closed sales for the six-month period ending April 2015. prices averaging about 10 JUNE 2015 WWW.THEREALDEAL.COM

$1,000 per square foot, according to Henry Waller, a vice president at Toll Brothers. The Hudson Tea is in its last stages of development, he added, and those condos are expected to fetch just as much. Waller said 10 percent of the units are constructed as three-bedrooms to cater to Hoboken’s maturing buyer. “Those twentysomethings that moved to Hoboken in the ’90s for the nightlife now have families and need larger spaces,” he said. Essex County is also attracting familyoriented buyers. Short Hills claims four of the ﬁve top selling homes, with prices ranging from $2.6 million to $3.5 million. “Short Hills has a phenomenal school system and a 40-minute commute to Penn Station,” said Arlene Gonnella, a broker at Weichert Realtors. Gonnella said the market is strong for houses around $2 million but signs of an even stronger market have already surfaced. Gonnella said she currently has a one-family home under contract at 27 Hillside Avenue for $4.5 million. “We’re luring more buyers from New York City, Hoboken and Jersey City who are looking to buy up,” said Gonnella. “Relative to other areas, we’re still a bargain.” TRD

Jersey City and KRE. Building a beautiful future together. The Kushner Real Estate Group is a full-service real estate investment and management company. We’re proud of the part we’ve played in Jersey City’s growth, and look forward to building an even brighter future together.

thekregroup.com

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A lesser-known Kushner bets big on Jersey Jonathan Kushner on his $1B development Journal Squared, and where the market is headed BY MIRIAM KREININ SOUCCAR

onathan Kushner may live in Manhattan, but the 37-year-old president of the Kushner Real Estate Group is betting big on Jersey City. His Bridgewater, New Jersey-based company owns and manages around 12 million square feet of commercial and residential real estate in New York, New Jersey and Pennsylvania, with roughly 80 percent of it in the Garden State. Kushner’s more famous cousin, Jared, is also developing real estate in Jersey. But a family rift that began a generation ago seems to endure between the two. Among many other projects, Kushner is hard at work on Journal Squared, a $1 billion luxury rental complex under construction in Jersey City. When finished, the three-tower complex will have 1,838 apartments and 40,000 square feet of ground floor retail. The first phase, with 538 apartments, will be ready in fall of 2016. The tallest of the towers will have 70 floors and stand 700 feet tall. How does Journal Squared stack up to your previous projects? It’s the largest project we will have built to date and one of the tallest in Jersey City. There are other groups saying they will be building the tallest. We don’t care as long as it’s the best leased. How will rents compare to Manhattan? We trend around half the cost of similar “amenitized” product in Manhattan. Starting rents will be $1,600 to $1,700 for studios, going up to around $4,200 to $4,300 for higher floor two-bedrooms.

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What about three-bedrooms? There won’t be three-bedrooms in the first tower. Only in the third tower will we go after families. The market now in Jersey City is young and hip and having fun. Eventually those people will have kids. Journal Square is a less gentrified area and a PATH stop farther from Downtown Manhattan. Is that a risk? If you’re leasing at half the cost of Manhattan and you’re very close to the train, you will be successful in Jersey City. The mayor is doing all the right things to grow the town, helping to secure a greater school system and a better life for people who want to go out at night. And the transportation is much better than anything across the river. What other projects are in the works? In Jersey City we have several other projects. We’re in the design stage of a two-tower complex on the corner of Grand and Grove in Liberty Harbor North with 688 units, right near City Hall. We just completed 18 Park, a 555,000-squarefoot apartment building in Liberty Harbor North. We also just completed construction of a new Boys and Girls Club of Hudson County. We’re also building the largest project in the state of Pennsylvania, in Bethlehem. It’s 832 units with 155,000 square feet of retail. And we recently completed two other projects in Pennsylvania and have two more in design phases now. How does your investment company operate? We started that business 10 years ago, KRE Capital Partners. We provide equity for operating partners to build and buy real estate. That totals another 2 million square feet of investment we have in other people’s projects. Let’s get back to Jersey City. How has it changed in the last five years? Five years ago we were talking about bringing nightlife and a streetscape. Now we have both. We have active farmers’ markets. We have young couples moving there and at the same time we’re starting to see an older demographic come into our buildings — empty

nesters, people who want to be close to Manhattan but can’t afford it. Jersey City is the next Brooklyn; it’s already happening.

How are your existing properties doing in the area? Incredibly well. We have very little vacancy, every week we outpace the prior week’s numbers on traffic. All of our rentals are 40 percent to 60 percent less than the price in Manhattan. What do you see going forward for the market? If job growth continues in New York City, and interest rates stay where they are and don’t jump too much, we’ll keep on building. Already if you look back at Google maps year over year, the change in development and the amount that’s coming into town, it’s amazing. JPMorgan just announced it was moving 5,000 jobs there. There’s good news every day. What is your biggest challenge? Trying to figure out where the next batch of young people are going to want to live. Are you looking at new markets? We’re looking at a bunch of other places. Your cousin Jared is also building in Jersey City. Are you in touch ? We’re on different sides of Journal Square. They’re on the western side, we’re on the east side. We’re not partners on each other’s projects. Would you ever move to Jersey? No. My wife and I are really happy raising kids in Manhattan. TRD

Jonathan Kushner is hard at work on Journal Squared, a $1 billion luxury rental complex under construction in Jersey City.

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Jersey City: The new Brooklyn? An influx of artists is transforming the area into a creative scene that developers can brag about BY MIRIAM KREININ SOUCCAR

refurbished tobacco factory in Jersey City, now home to a sprawling arts complex called Mana Contemporary with studios, exhibition spaces and museum archives, is drawing crowds and undergoing an expansion. In the nearby Journal Square neighborhood, the city is embarking on a $30-million renovation of the Landmark Loew’s Jersey Theatre. And a 110-year-old warehouse there is being converted into a luxury rental building with studio space and apartments set aside for working artists, one of many such buildings going up in the city. “Our goal is to bring the creative class here,” said Jersey City Mayor Steve Fulop. Welcome to what could be called “the new Brooklyn.” Young Wall Streeters have been moving to Jersey City’s waterfront highrises in search of cheaper real estate and a quick commute to Manhattan for years. But as Brooklyn continues to gentrify, artists are now flocking to Jersey City too, scooping up studio space for some 30 percent less, and in many cases, they are taking up residence there altogether. The influx, coupled with a flurry of new cultural venues and city initiatives like street performances and studio tours, has created a major arts community that is helping to

“The landscape is changing by the minute. There’s an art scene in every corner of town.” — Marcia Langley, Liberty Real Estate

Panoramic view of Mana Contemporary’s 2-million-square-foot campus in Jersey City. Photo by Adam Cohen.

revitalize a city once riddled with vacant lots and crime. “Jersey City is the next place where everyone is going to be moving to,” said Ray Smith, an artist whose paintings are in the collections of the Metropolitan Museum of Art and the Whitney Museum of American Art. Smith opened a 3,000-square-foot studio at Mana Contemporary two years ago, after Hurricane Sandy destroyed his workspace on the Gowanus Canal. He has since rebuilt in Brooklyn but plans to consolidate his operations in Jersey City in the next couple of years. Mana Contemporary founder and executive director, Eugene Lemay, He’s getting such a good deal stands with his artwork, “Untitled, 2011.” Photo by Esther Montoro.

14 JUNE 2015 WWW.THEREALDEAL.COM

that he declined to say how much he is paying. Michael Bittel, a photographer and printer whose business, Eclectic Taste, prints art on textiles, wood and glass, moved from Greenpoint, Brooklyn to Jersey City in March. He pays a total of $1,300 a month for a renovated brownstone studio apartment in the desirable Paulus Hook neighborhood and an art studio in a warehouse on Paciﬁc Avenue. In Brooklyn he paid $2,200 a month rent for a one-bedroom and had to work out of his apartment. His new home is a ﬁve-minute walk to the Grove Street PATH train station. Bittel said the area is starting to feel like Brooklyn, with street fairs and restaurants catering to foodies. “I just went to Sam A.M., which uses locally sourced stuff and reminds me of my breakfast place in Greenpoint.” Indeed, a number of Brooklyn estabCONTINUED ON PAGE 16

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CONTINUED FROM PAGE 14

“Making Art Dance,” one of many installations seen at Mana Contemporary, included a David Salle backdrop and costumes for “The Elizabethan Phrasing of the Late Albert Ayler,” a ballet. Photo by Joe Schildhorn.

lishments are opening outposts in the area. Word, a Greenpoint-based independent bookstore, opened a Jersey City branch in late 2013. Williamsburg-based Barcade opened a branch of its microbrewery/video arcade in Jersey City in 2011. “The landscape is changing here by the minute,” said Marcia Langley a broker with Liberty Real Estate who has lived in Jersey City since 1995. “There’s an art scene in every corner of town now.” The migration is already pushing up prices. Laura Skolar, owner of Century 21 Plaza Realty, says prices in the Jersey City Heights area are up nearly 20 percent this year over last. A year ago, one of her clients was going to list a two-family home in Jersey City Heights — a section of town with new zoning allowing artists to create live/work spaces — for $325,000. But she ended up putting it on the market this past fall for $369,000. It received six offers and sold for $388,000. Jersey City is improving so quickly that some artists are already fearful of being priced out. Stephen Cimini, a painter, bought a one-bedroom loft condo near Journal

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Square in 2009 for $250,000 with a parking space. He rents a studio across the street for $600 a month. “Even in downtown Jersey City my apartment would cost double now,” Cimini said. The city is making some efforts to keep the area affordable for artists. In order to win the contract to renovate the warehouse at 350 Warren Street, housing developer Mill Creek Residential had to include 13 artist studios, a 3,500-square-foot ground ﬂoor gallery and set aside 15 apartments for local artists who will receive subsidized rent. The $150-million luxury rental building will have 366 units and is expected to open in October. “We are mixing the art community into the building,” said Rich Murphy, Mill Creek’s managing director for New Jersey. “We haven’t done this anywhere before.” Though numerous factors are contributing to Jersey City’s growing status as an arts mecca, real estate developers consistently point to Mana Contemporary as a major catalyst. The public art complex, which occupies more than 2 million square feet, is the brainchild of Moishe Mana, an Israeli-born

businessman who is active in real estate and founded Moishe’s Moving and Storage, and his partner Eugene Lemay. The duo opened the complex in 2011 with an art storage business and 40 artist studios. In the ﬁrst year they had a waiting list of 100 artists trying to get space. Last year starchitect Richard Meier moved his models from Long Island City, Queens to a warehouse complex within Mana. His studio designed the space, which is now the Richard Meier Model Museum. Currently in expansion mode, the Mana will have 400 studios, a program for galleries from abroad, ﬁve restaurants and a boutique hotel upon completion in 2016. Studios are rented at around $30 per square foot, which is similar to Brooklyn, according to Lemay. But Mana brings dealers to visit the artists, organizes exhibitions and creates a community. In the blocks surrounding the complex, the sky is full of cranes as developers like the Kushners erect luxury apartment buildings. “You can attribute that to Mana,” Lemay said. “They come here all day long and show bankers this artists’ colony.” TRD

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Industrial market looks up Distribution centers multiply in North Jersey, spurred by the growing needs of e-commerce businesses BY THERESA AGOVINO

uke Realty welcomed the first warehouse it ever developed in New Jersey last October, in Linden. A second opened there in April. The construction projects follow the Indianapolis-based real estate trust’s 2013 purchase of two warehouses in Cranbury, New Jersey leased to Crate & Barrel. And the company is on the prowl for more opportunities in the area. “It’s just a great place to be,” said Jeff Palmquist, senior vice president of Duke’s Northeast region. “It is such a viable market being so close to New York City.” Duke’s and numerous other firms’ desire to set up in Northern New Jersey has set off a building boom in the industrial market. In 2014, 17 new projects totaling nearly 8 million square feet were completed, the most active year of industrial development in the area in the past two decades, according to a report by CBRE. An additional 15 projects are scheduled to be completed by the end of this year. Prime locations include the ports in Newark, the terminal in Elizabeth and the towns off exits 7A to 13A on the New Jersey Turnpike. The improving economy has certainly spurred interest in the area, but perhaps even more important is the continued growth of e-commerce. Such sales now account for 6.2 percent of total retail sales in the U.S., up from 4.1 percent five years ago. Northern New Jersey allows for immediate access to the Greater New York area, which is home to 23.4 million people, and is a day’s drive

ASKING RENTS 2009 2010 2011 2012 2013 2014

Duke Realty developed its ﬁrst New Jersey warehouse in Linden last October.

from 130 million consumers — one-third of North America’s population. Retailers and manufacturers such as Home Depot and Pepsi have warehouses and distribution centers in the area. “Urban professionals in the city want same-day or next-day delivery so companies need to be nearby,” said Mindy Lissner, an executive vice president at CBRE. Renewed leasing activity and higher rents

“Urban professionals in the city want same-day or next-day delivery, so companies need to be nearby.” —Mindy Lissner, Vice President at CBRE VACANCY RATES

$5.99 a square foot $5.79 a square foot $5.66 a square foot $5.78 a square foot $5.99 a square foot $6.44 a square foot

2009 2010 2011 2012 2013 2014

Source: Cushman & Wakeﬁeld data for Hudson, Essex, Passaic, Bergen and Morris counties. 18 JUNE 2015 WWW.THEREALDEAL.COM

for industrial sites are helping to fuel North Jersey’s building surge. Leasing activity skyrocketed 80 percent for the ﬁve years ending in 2014 to 23 million square feet, according to a Cushman & Wakeﬁeld report. Asking rents increased 11 percent to $6.44 a square foot during the same time period. Meanwhile, the overall vacancy rate is edging back to prerecession levels. It stood at 8.2 percent last year, down from 10.1 percent at the height of

LEASING ACTIVITY 8.5 percent 10.1 percent 9.6 percent 9.1 percent 8.2 percent 8.2 percent

2009 2010 2011 2012 2013 2014

13.6 million square feet 12.8 million square feet 23.4 million square feet 17.1 million square feet 21.3 million square feet 23 million square feet CONTINUED ON PAGE 20

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COMMERCIAL w New Jersey Market Report

CONTINUED FROM PAGE 18

the economic downturn. “In my 25 years on the job, I haven’t seen it so busy,” said Jules Nissim, an executive vice president at Cushman & Wakefield. Still, Nissim points out that roughly 75 percent of the buildings under development have not been fully pre-leased. During the last boom, 50 percent of the projects had tenants before they opened. “It is an interesting dynamic,” said Nissim. “We will see if it can all be absorbed.” Some companies say it is a Duke built a second warehouse in Linden that opened in April. challenge to find other locations with New Jersey’s advantages. He said the 50-year-old company had already fully leased to three clients. And “New Jersey has so many transportation 60 percent of the 495,000-square-foot decided to expand into the Northeast so Northern New Jersey was a logical access points,” said Jonathan Frisch, vice building the company debuted last October president of sales and marketing at AP&G, place to go. has been rented to a liquor distributor. which makes the Catchmaster line of pestThe 144,000-square-foot building in “We are very pleased with our assets,” Linden that Duke completed in April is control products. said Palmquist. TRD Three months ago, it started moving from Sunset Park, Brooklyn to a 170,000-squarefoot building in Bayonne that it bought last year. Frisch said the company couldn’t find column-free, high-ceilinged space that was BY ELAINE POFELDT large enough to accommodate its needs in New York City. Upstate New York and Long The outlet offers brands even get into those places.” hen Rent the But about a decade ago, such as Nicole Miller, Runway opened a Island didn’t offer robust transportation as retailers began doing Kate Spade, Badgley new warehouse store in options. The company also considered movmore of their own disMischka and Shoshanna a 160,000-square-foot ing to North Carolina but some members of for steep discounts. space on Metro Way in counting, the outlet scene the family that own the business weren’t keen “At one point, the Secaucus last fall, fashin the area took a blow. on such a radical relocation. Plus, Frisch said Secaucus outlets were “Rent the Runway is ionistas weren’t the only it was important to the company to keep its unbelievable,” said Chaus, a great outlet for them,” ones who were excited. roughly 100 employees. who has worked in the he says. “It’s starting Commercial broker New Jersey has also been offering major local market for more to bring people back to Jeff Chaus, owner of tax incentives to lure businesses to the state. than 20 years and has the Meadowlands, to Chaus Realty in Hasbleased space for Hartz Secaucus, to rejuvenate it.” rouck Heights, said the Published reports noted that AP&G received Mountain. “You couldn’t warehouse has been $11 million in tax subsidies from New Jersey breathing new life into to move across the river. Frisch wouldn’t comthe local market for outlet ment on the subsidies but said they weren’t space. Rent the Runway the most significant factor in the decision. rents designer clothing Location was the firm’s chief concern. to consumers from its “We need to strike a balance between the website and from stores family’s desire to stay in the neighborhood in Soho and the Flatiron Rent the District in New York. It and what makes economic sense,” said Frisch. Runway’s shoppable fills rental orders at the Palmquist also said that while Duke 160,000 Secaucus warehouse, appreciated the tax breaks it received, they -square-foot leased by Hartz Mountain warehouse weren’t that significant in the firm’s decision and outlet Industries, and also sells to move into New Jersey. discounted clothing there.

Rent the Runway dresses up the Secaucus warehouse scene

20 JUNE 2015 WWW.THEREALDEAL.COM

EDUCATION IMPACT w New Jersey Market Report

Doing the math: More schools + more families = more building Schools expand programs and take more space to meet demand as developers build bigger units BY ELAINE POFELDT

n recent years, Hudson County private schools have grown rapidly in response to the uptick in demand from families who want to raise their children in the area. Some families are coming from New York City in search of more space; others are long-time residents who are staying put rather than moving to the Jersey suburbs. Even some New York City families are sending their children across the river. For example, Hamilton Park Montessori School in Jersey City, which offers programs serving children from preschool through sixth grade, has grown in leaps to accommodate exponential growth in attendance. Stevens Cooperative School, with campuses in Hoboken and the Newport area of Jersey City, is similarly beneﬁting from Hudson County’s growing allure. Mark Singleton, a broker and owner at Singleton Galmann Realty in Hoboken, said the growth of charter schools has played a key role in keeping families in the community and stabilizing it. He also pointed to the growing presence of private schools such as All Saints Episcopal Day School, which teaches children from early childhood through middle school, and The Hudson School, which serves grades ﬁve through 12. “More and more families are staying,” said Singleton. “A big part is school choice.” He noted that developers are now building three- and four-bedroom units to meet the demand from growing families. Mark Ang, a broker and owner at Hoboken City Real Estate, agreed. He said that with much of the city’s apartment stock maxed out at 1,500 square feet, “family-size” apartments are getting put on the fast-track for zoning board variances. Families in Hoboken and Jersey City, where underperforming public schools are a concern, have been eager for more school options for decades. Private School Review, an online publication, lists 58 private ele-

22 JUNE 2015 WWW.THEREALDEAL.COM

Developers are building three- and fourbedroom units to meet demand. —Mark Singleton, Singleton Galmann Realty

Hamilton Park Montessori serves students from preschool through sixth grade.

mentary schools and 16 private high schools in the county. Most have a religious affiliation but many of the newer, fast-growing private schools do not. Alexa Huxel, head of school at Hamilton Park, says the institution started out eight years ago with 10 students and now enrolls more than 300. Yearly tuition in the full-day elementary program is $17,750. “More families are not interested in moving out to the suburbs,” said Huxel. “Their moms or dads don’t want the big commute.” To accommodate these families, Hamilton Park has been growing its footprint gradually in its six-story rental building. “We started out with one room on one floor,” said Huxel. “We now take up four floors, and we have two more floors we can build into.” Stevens Cooperative School, a progressive school, will have 430 students from

age two to eighth grade in the 2015 to 2016 academic year, said Wendy Eaton, director of communications. The students are spread out in four buildings on two campuses, in Hoboken and in Jersey City, where Stevens expanded in 2005. Most students at Stevens come from Hoboken and Jersey City, but there are families from surrounding towns such as Weehawken, North Bergen and Bayonne, as well as Newark and even New York City, said Eaton. “A lot of people in Hoboken walk to school,” said Eaton. “It’s very convenient and close to the PATH.” One draw for the New York City students is the lower cost. Tuition at Stevens for kindergarten through second grade is $19,355; third through eighth grade is $19,940. “There are a lot of private schools in New York City that are twice the cost,” Eaton said. TRD

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BROKERAGES w New Jersey Market Report

New brokerages open ofﬁces to seal deals in Hudson County Despite a decline in the overall number of agents, region is fertile for those still in the game BY ANNE FIELD

evelopers aren’t the only real estate players making the most of surging interest in the Gold Coast. Brokers are in on it, too. Early last year, long-time Hoboken broker Renée Condon opened a Keller Williams Realty franchise there, part of the ﬁrm’s plan to launch four ofﬁces in total in Hudson County by the end of 2016.

“We see the Gold Coast as being a $2 billion market for us.” — Michael Brand, Keller Williams Realty

A two-bedroom, three-bath apartment at 1025 Maxwell Lane in Hoboken is listed at $1.7 million. Renée Condon of Keller Williams Realty

About six months later, Jersey City broker Natalie Miniard partnered with local developer Eyal Shuster Development to open JCity Realty, which now has 11 agents. And national realtor Douglas Elliman said it’s “considering a bigger move in New Jersey,” speciﬁcally to the Gold Coast, according to a spokesperson who would not provide more detail. “As Manhattan and Brooklyn get more expensive, the demand is only going to grow on the Gold Coast,” said Michael Brand, tri-state regional director for Keller Williams Realty. Still, it’s far from smooth sailing for New Jersey brokers. The number of brokers in Hudson County has declined by 15 percent to 2,497 over the past ﬁve years as the condo market has continued to lag behind rentals.

Because condo sales are considerably more lucrative than rentals, many brokers have decided to throw in the towel. Meanwhile, the decrease has been even greater in nearby

Essex and Bergen counties, which have more single-family homes and less development. In Essex county, the number dropped 21 percent, to 2,456; in Bergen, there was an 18 percent decline, to 5,902, according to the Department of Banking and Insurance in New Jersey. But for the most persistent of salespeople,

Natalie Miniard of JCity Realty worked with Art House, a 119-unit rental that was fully leased in six months. 24 JUNE 2015 WWW.THEREALDEAL.COM

BROKERAGES New Jersey Market Report

Jacqueline Urgo of The Marketing Directors, which represents The Modern in Fort Lee (pictured at right).

the Gold Coast is proving to hold great promise. Winners there range from real estate professionals who have cornered a productive niche to those leasing a high volume of waterfront rentals or snagging exclusive representation of particular developments. Over the next three to five years, “we see the Gold Coast as being a $2 billion market for us,” said Brand. Keller Williams launched its Gold Coast presence in January 2014, when Condon opened her office. She also has a branch office in downtown Jersey City. Sales volume since opening is over $350 million, according to Condon. To boost its clout, Keller Williams will provide special marketing services to developers. That means everything from stationing staff at sales centers to helping choose carpeting and other amenities. The firm, which hasn’t provided such services to developers to date, plans to use its Gold Coast operations as a model for similar activities in other U.S. cities. When Miniard opened JCity Realty about a year ago, one of the firm’s first clients was the Art House, a 119-unit rental. It was 85 percent leased in three months and 100 percent rented three months later. But more important for the firm, according to Miniard, is her partnership with Shuster, which gives her the opportunity to have exclusive representation arrangements with the developer, depending on her performance. For example, she will represent a 159unit condo currently being built by

The Marketing Directors also represents 70 Columbus.

Shuster Development; Miniard, who expects buyers to begin moving in next year, recently installed a team of two sales agents to staff the building full-time. Other brokers have similar exclusive arrangements. Manhattan-based The Marketing Directors, for example, is representing eight Gold Coast projects, including The Modern, a 450-unit building in Fort Lee, which is about 50 percent leased, and 70 Columbus, a 545-unit rental in Jersey City, the second phase of a fourphase project. The ﬁrm acts as the exclusive agent on the buildings. Rentals for luxury buildings get anywhere from “the mid-40s to mid-50s a square foot, depending on the amenities,” said Jacqueline Urgo, president of The Marketing Directors. “There’s a voracious appetite for rentals.”

Most of the firm’s 25 licensed professionals in New Jersey are on the Gold Coast, about twice as many as were there in 2012. For Sebastian Oliveri, a broker with Premier Brokers in West New York, which has 20 agents (four more than six months ago), the secret is volume. According to Oliveri, his business is split 50-50 between condos and rentals. His average rental rate is 10 to 12 a month, and rents in the Gold Coast have increased 20 percent to 25 percent over the past four years. “A person can make well over six figures in a year just doing rent- Sebastian Oliveri of Premier als,” he said. Still, Brokers in West New York it’s not easy. “If you’re willing to get 60 phone calls a day and do the work, you’ll do pretty well,” he added. As for sales, Oliveri has another ace in the hole: He specializes in waterfront property that is easily accessible to New York City. Similarly, Walter Burns, a condo specialist in the Weichert Realtors office in Hoboken, focuses only on waterfront property “between the George Washington Bridge and the Statue of Liberty,” he said. Burns said that because condos are in short supply, he is seeing demand surge for resale property. The realtor said his overall volume for 2014 was $26.7 million, up from $15.4 million the year before. TRD WWW.THEREALDEAL.COM JUNE 2015 25

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CELEB CRIBS w New Jersey Market Report

A-listers on the move Ice-T, Sean “Diddy” Combs and Nick Cannon among those buying, selling or leasing homes in NJ BY MIRIAM KREININ SOUCCAR

ith its vast array of multimillion dollar estates just minutes from Manhattan, New Jersey has attracted silver screen celebrities, professional athletes and Wall Street titans for years. The state features posh towns like Saddle River and Alpine — the latter of which ranks among the country’s top ﬁve most expensive zip codes.

Indeed, Jersey is host to a number of A-listers including Chris Rock, Alicia Keys, Mary J. Blige and Patrick Ewing. The Garden State also houses homegrown reality stars like Teresa Giudice of “The Real Housewives of New Jersey,” who currently makes her home in a prison cell just a wee bit smaller than the 10,000-square-foot manse she is selling.

Ice-T and his wife Coco Austin just listed their penthouse condo in North Bergen. The property, with two terraces and city views in a boutique waterfront building, is going for $1.19 million. Kristin Ehrgott, owner of Hoboken-based agency Avenue Residential, is handling the sale. The couple moved into a $2.1 million Edgewater home in April after spending $1.5 million on upgrades. The house, on a cliff with river views, has a glass elevator and an inﬁnity pool. The “Law & Order” actor installed elevators to make a three-car garage hold six cars.

Nick Cannon, the host of “America’s Got Talent,” moved into a rented mansion in Saddle River in March. The six-bedroom home is for sale for $3 million. Cannon, who reportedly was looking for a private place for his three-year-old twins in the wake of his divorce from Mariah Carey, is currently renting the house for $11,000 a month with an option to buy. The home sits on two acres and has a private lake. 28 JUNE 2015 WWW.THEREALDEAL.COM

Rapper turned business mogul Sean Combs reportedly re-listed his Alpine estate for $8.5 million after a deal on the property a year ago fell through. The hilltop manse sits on 3.25 acres of land and has seven bedrooms and nine-anda-half baths. Amenities include an indoor basketball court, outdoor pool, tennis court and putting green. The property is listed with Wendy Credle of Prominent Properties Sotheby’s International Realty.

As “The Real Housewives of New Jersey” star Teresa Giudice serves a 15-month prison sentence for bank and wire fraud, her house in Towaco faces foreclosure. The 10,000-square-foot home initially went on the market for nearly $4 million in 2014, but failed to sell. Since then the price has been slashed twice, and the home has been on and off the market several times. The most recent asking price was $2.999 million.

Yogi Berra’s six-bedroom colonial in Montclair closed in October. The impeccably maintained home went on the market in April 2014 with an asking price of $888,000. It went into contract one week later for $988,000. Julie Rowley of Keller Williams-NJ Metro Group had the listing.

NEW DEVELOPMENT w New Jersey Market Report

Developers dig the Gold Coast A ranking of the top firms in Hudson County by number of units recently built and in the pipeline BY C. J. HUGHES

udson County, which includes urban areas like Jersey City, Hoboken and Weehawken, is radiating cool these days, with its hip restaurants, arts scene and proximity to New York City. That vibe, along with rents often around 50 percent of Manhattan’s and 20 percent cheaper than those in Brooklyn, is making it one of the hottest residential destinations in the tri-state area, its supporters say. “It’s a terriﬁc location for somebody who wants affordability,” said Jeffrey Kanne, the chief executive of National Real Estate

“It’s a terriﬁc location for somebody who wants affordability.” —Jeffrey Kanne, National Real Estate Advisors

Advisors, which has teamed with Kushner Real Estate Group to build Journal Squared, a three-phase, 1,800-unit colossus in Jersey City. Using our own research and data from CoStar Group and BuzzBuzzHome,

The Real Deal ranked the top developers by number of units that hit the market in 2014 and 2015, as well as those that will come online by the end of 2017. When ﬁrms partnered on projects, TRD allocated the full number of units to each of them.

#1 Ironstate Development Company Claiming the top spot is a Hoboken-based ﬁrm with deep roots in the area, Ironstate Development Company, with 3,354 units. A huge chunk of that total is made up by URL (Urban Ready Living) Harborside, an amenity-laden rental complex in Jersey City with a total of about 2,300 units. Its ﬁrst phase, which will open in mid-2016, will consist of 763 apartments in a massive 69-story tower. Harborside, which is being developed in partnership with Mack-Cali Realty Corporation, will feature a gym and even an urban farm with beehives. Its lobby cafe, which is expected to be operated by New York chain Coffeed, will be open to the public and “become a social hub for the neighborhood,” said Michael Barry, an Ironstate executive. The company is also the developer — with Panepinto Properties (see #10) — behind the luxury residences 50, 70 and 90 Columbus in Jersey City.

Michael Barry, Ironstate

Above: Ironstate is developing URL Harborside, an amenity-laden rental complex in Jersey City. Left: The footprint of URL Harborside. 30 JUNE 2015 WWW.THEREALDEAL.COM

NEW DEVELOPMENT New Jersey Market Report

#2 Kushner Real Estate Group Jonathan Kushner’s firm takes the number-two spot with 2,932 units. Among its most notable recent developments is Journal Squared, a three-tower, 2.4-million-square-foot complex underway in the commercial Journal Square neighborhood that will unfold in three phases. The first will consist of a 53-story tower with 538 apartments. Developed with National Real Estate Advisors, Journal Squared will include the state’s tallest residential tower at 70 stories (though Kushner says other developers have claimed they will build taller), which will best nearby 55-story Trump Tower Residences; it will also add a landscaped public plaza. Other recent Jersey City projects by Kushner include 18 Park, with 422 luxury one- and two-bedroom units, which opened last spring and where rents start at $1,800 a month. Kushner believes the way to wrest renters from Brooklyn is to emphasize Jersey City’s robust public transportation; Journal Squared straddles a PATH train stop. “And we’re actually finding more and more renters coming from Brooklyn now,” said Kushner, cousin of Jared Kushner.

Jonathan Kushner

Developed with National Real Estate Advisors, Journal Squared will include the state’s tallest residential tower, at 70 stories.

Jared Kushner Kenneth Pasternak’s KABR Group is developing a 40-story tower behind the old Jersey Journal building.

#3 KABR Group In third place is KABR Group, a real estate company based in Ridgefield Park. The firm has 2,548 units underway in various projects, several of which are being developed in partnership with Jared Kushner’s Kushner Companies (see #4). One of those projects, 30 Journal Square, calls for adding a 40-story tower behind the former Jersey Journal building, whose iconic red sign overlooks the square. KABR and Kushner Companies also joined forces on the development of One Journal Square, a long-empty two-acre site that was purchased in January for $27 million. “We will soon share plans for this site that will bring a new 24/7 vivacity and energy to the heart of Jersey City through the development of a truly outstanding mixed-use product, and contribute to the ongoing transformation of this city into a firstchoice destination,” Kenneth Pasternak, KABR’s chairman, told NJBiz.com earlier this year.

Jersey City ofﬁcials help Jared Kushner and partners break ground on 50-story Trump Bay Street.

#4 Kushner Companies Kushner Companies, whose chief executive is Jared Kushner, the husband of Ivanka Trump, controls 2,472 units. That Trump connection, perhaps, has enabled a collaboration with The Donald: the 50-story Trump Bay Street, a $195-million, 447-unit project that broke ground last year near Trump Plaza. KABR Group also invested.

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NEW DEVELOPMENT w New Jersey Market Report

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#5 Mack-Cali Realty Corporation With its subsidiary Roseland, Mack-Cali Realty Corporation clocked in a close ﬁfth, with 2,373 units. Mack-Cali, a REIT with many ofﬁce buildings under its belt, bought Roseland Properties in 2012 in a $135 million deal designed to expand its multifamily business. Brought into the fold with that acquisition was the master-planned Weehawken waterfront development on Port Imperial, which lines once-desolate land across the Hudson River from Midtown Manhattan. Soon after buying these apartments, MackCali added another building to Port Imperial: the 10-story RiverParc, with 280 studio to three-bedroom units. A golf simulator — the amenity du jour at some Manhattan and Brooklyn luxury projects — is on site too, natch. Mack-Cali’s RiverParc has 280 studio to three-bedroom units and a golf simulator on the premises.

#6 National Real Estate Advisors In sixth place is National Real Estate Advisors, a Washington, D.C.-based ﬁrm with 1,840 apartments in the works in Hudson County, including the Journal Squared project, which will offer a handful of “micro-units” starting at 425 square feet. The developers, though, say these super-small versions are an exception, and that their target demographic is couples. For Kanne, the company’s chief executive, Jersey City is an unequivocal bargain, and he might be in a good position to make that call: National is an owner of New York by Gehry, the twisting, metallic 870-foot, 900-unit luxury tower in Manhattan’s ﬁnancial district. Rents there average $80 a square foot, Kanne said; at Journal Squared, which is set to open in fall 2016, expect about $40. In past decades, Kanne said, Jersey City’s waterfront was the only place developers went; the master-planned Newport neighborhood was an early result. Now, some of the attention has shifted inland, where there are older, if rundown, structures, like a shuttered Loew’s Wonder Theater, that make up a more traditional streetscape. “Life is going to be breathed into all of those buildings in a way that Newport will never have,” Kanne predicted.

32 JUNE 2015 WWW.THEREALDEAL.COM

At Journal Squared, opening in fall 2016, rents average about $40 a square foot, which developer Jeffrey Kanne calls a bargain.

NEW DEVELOPMENT New Jersey Market Report

#7 Advance Realty This Bridgewater-based firm has 1,077 units recently built or in the works. In hardscrabble Harrison, on the western edge of the county, Advance is teaming up with DeBartolo Development to build hundreds of apartments and 20,000 square feet of stores next to the Red Bull Arena. The first building to go up there will have about 300 units, and Advance plans to have 2,000 built over the next five or so years.

Advance and DeBartolo Development will build hundreds of apartments in Harrison’s Riverbend district.

#8 Toll Brothers While most Gold Coast developers appear to prefer rentals, since 2006, Toll Brothers has constructed hundreds of condos in seven buildings in Hoboken. Their total unit count is 863. Next up comes the Morgan at Provost Square in Jersey City, a 38-story, 417unit rental expected to open this year. Condos are planned for adjacent sites. The Morgan at Provost Square in Jersey City is expected to open this year.

A rendering of 3 Journal Square in Jersey City. Hartz is developing the 116-unit Osprey Cove in Secaucus.

#9 Hartz Mountain Industries With 829 units, Hartz Mountain Industries ranks ninth. It has a presence in the mixed-use Lincoln Harbor section of Weehawken, a ferry ride away from Manhattan. On land there that the firm has owned for three decades — which is mostly occupied with commercial buildings — is the Estuary, a 582-unit apartment building. Hartz Mountain also has a flag planted in Secaucus: Osprey Cove, a rental with 116 studios to two-bedrooms. Note: Developers with projects whose details could not be independently confirmed were not included.

#10 Panepinto Properties Not every developer is a Johnny-come-lately. Panepinto Properties, run by local Democratic leader Joseph Panepinto, is a family-owned business that’s been reshaping Jersey City since 1977. It ranked tenth with 787 apartments, including those at 3 Journal Square, which it’s developing with Hartz Mountain. The ﬁrm is also working with Ironstate on the Jersey City residential developments 50, 70 and 90 Columbus, the last of which will come to market in 2018, with more than 630 units. TRD WWW.THEREALDEAL.COM JUNE 2015 33

HOME BUILDING w New Jersey Market Report

Old homes come down as the market heats up Teardowns are back in vogue as small developers place big bets on residential real estate BY ELAINE POFELDT

ith new home building picking up steam in the Northern New Jersey suburbs, investors like Joe Gorga — a cast member of “The Real Housewives of New Jersey” and brother of one of the reality show’s stars, Teresa Giudice — are getting in on the action. “He just finished a house in Montclair that he’s probably going to sell for around $1 million,” said David Hansel, president of Alpha Funding Solutions in Lakehurst, New Jersey, which provides financing to builders so they can come in as cash buyers and close quickly. The project was a nearly 3,500-squarefoot, four-bedroom, four-and-a-half-bath house, said Hansel, whose firm provided 90 percent of the cost of the David Hansel of Alpha project to Gorga. “He Funding Solutions does a handful of deals each year,” Hansel said. Controversial reality TV stars aren’t the only ones. With housing prices in New York and Hoboken pushing many families out to the suburbs, many communities are seeing roomy new homes spring up on lots where older homes have been torn down or undergone major renovations. As the housing market has stabilized, builders have become more confident they will get the returns they expect, and are gravitating to larger projects, said Hansel. With about 200 loans in its portfolio currently, his firm’s average loan size is $360,000, but deals can range from $100,000 to $10 million, he said. “Two years ago, people were doing smaller renovation projects,” said Hansel. “We’re seeing a lot of the experienced guys now either doing a second floor, bumping out a Cape, maybe tearing down a house and building new one. A couple of years ago people weren’t taking those risks of doing a larger project.” Regionally, demand for new construction is picking up. The U.S. Census Bureau

34 JUNE 2015 WWW.THEREALDEAL.COM

“The Real Housewives of New Jersey” cast member Joe Gorga built a 3,500-squarefoot, four-bedroom home in Montclair that could sell for $1 million.

found that there were 44,000 single-unit, privately owned housing units started in the Northeast in March 2015. That is down from 50,000 in March of last year, but a sharp increase from February 2015, when there were 22,000 single-unit housing starts during the dreary cold month. “You see it in Montclair, Essex Fells, Short Hills, Summit and Westﬁeld,” said Ray Rodriguez, vice president, regional mortgage sales manager at TD Bank for the Metro New York region, including Northern New Jersey. “They have great school districts,” said Rodriguez. “Young families want to move to a town with a great school system and have the house of their dreams.” Some of the families are coming from New York City, where the average listing price for a two-bedroom apartment on Trulia the ﬁrst week in April was $2.8 million. And Rodriguez said the migration is not just from Manhattan.“Young families from Brooklyn are moving all the way to New Jersey,” he said. Others already live in suburban communities and want to trade up. “Maybe they’ve lived in a $500,000 home for seven or eight years and they are doing well in their career,” said Paul Lamastra, an associate broker with ERA Suburb Realty Agency in Scotch Plains. “They upgrade.” Prices aren’t low in the New Jersey

suburbs, but they are more affordable than New York City. The National Association of Realtors found that the median sales price of existing single-family homes in the New York metro area — including Northern New Jersey, Long Island and parts of Pennsylvania —was $395,900 in 2014, up from $379,300 in 2012 and $381,300 in 2013. By all accounts, most of the construction is being done by local small and midsized builders. “Your larger developers are mostly doing condos and large rentals,” said Rodriguez. Some investors are aggressively searching for older homes to ﬂip. Hansel said people will go out and drive around and ﬁnd homes in towns they are focused on. “We’re seeing a lot of activity in North Jersey, through all the towns. They are picking up a lot of these distressed homes, putting on additions, rehabbing them and putting them back into the market.” CONTINUED ON PAGE 36

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HOME BUILDING w New Jersey Market Report

CONTINUED FROM PAGE 34

Among recent deals Hansel’s firm has financed is a $350,000 gut renovation of a 2,600-square-foot home in Summit, where he anticipates the home, once complete, will sell for $1.2 million. The project is a joint venture between Alpha Funding Solutions and the rehab firm. Alpha Funding Solutions has also financed two 3,000-square-foot, fourbedroom, four-and-a-half bath Colonials that Hansel anticipates will sell for about $950,000 each in Livingston. Lamastra said he has seen substantial activity in both Scotch Plains and in Westfield. He said only a few are renovations of older homes. “The majority are total knockdowns,” Lamastra said. “I don’t see that changing for a long time.” One reason is economics. “A lot of these older homes are 70 to 100 years old,” he said. “You can only repair them for so long.” Among the new homes going up, Colonials, with their traditional peaks, are

This Montclair home with a two-story addition has a listing price of $875,000.

popular locally. “They’re more dimensional than the construction of the sixties and seventies,” he said. In his area of Union County, Lamastra said he is seeing larger footprints of 3,500 square feet or more, with some as large as 5,000 square feet. Most of the new homes have four or five bedrooms. Price points range from $850,000 to $1.7 or $1.8 million, with the highest-end homes mostly in Westfield. In the projects above $800,000, one popular trend is to include an au pair suite, with a fifth bedroom and its own bathroom, he said.

“It seems like, in order for builders to make money, they have to go larger,” he said. One challenge in some neighborhoods is small lot sizes that make it hard to build larger homes, noted Lamastra. Some builders are installing both a ﬁnished basement and attic in those cases, he said, adding that they “can’t get enough square footage, width-wise.” But those challenges don’t seem to be scaring off investors and builders. “Now, because there is so much activity, there are lenders coming out of the woodwork,” said Hansel. TRD

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OFFICE MARKET w New Jersey Market Report

Northern Jersey ofﬁce leasing market stuck in neutral State incentive programs look to counter challenges including older buildings, lack of modern amenities BY C. J. HUGHES

espite some momentum from tenants relocating from Manhattan, the office leasing market in Northern New Jersey continues to crawl along. The 26 percent vacancy rate across the region, which is roughly located north of Newark and east of I-287 in the cities and suburbs near the Hudson River, hasn’t budged much since the end of the recession, brokers say. “We’ve kind of been stuck in neutral,” said Steve Jenco, a vice president with commercial brokerage Jones Lang LaSalle, who is based in Bergen County. “We’re hitting a lot of headwinds right now.” Many of those winds can be blamed on the lack of job growth in a state that in March had a 6.8 percent unemployment rate, among the highest in the nation; the U.S. unemployment rate that month was 5.5 percent. And if companies are shedding workers, or even if they’re just not hiring new ones, brokers say, they’re probably not leasing office space. Also, aging office parks from the 1980s and 1990s have a hard time attracting today’s tenants, who usually want more amenities and smaller floor plans than those kinds of developments provide. To make matters worse, some big-name, longtime-area tenants, like Hertz, which was in Park Ridge, and Mercedes, in Montvale, recently moved their headquarters to the

“The office sector has taken the longest to bounce back.” —Elie Sofair, Cranberry Realty South, releasing even more empty square feet onto the market. But the state is taking action. Through the 2012 Grow New Jersey Assistance Program, New Jersey has awarded tens of millions of dollars to companies to encourage them to stay in the state or relocate there. An older effort, the Urban Transit Hub Tax Credit program, has dangled similar incentives, to the tune of billions of dollars. However, because some companies merely move from one office building in Northern New Jersey to another, the stubbornly high vacancy rate persists. “It’s like musical chairs, and it’s been an ongoing story in suburban New Jersey,” said Jeffrey Heller, a principal in the Morristown office of Avison Young, the commercial brokerage. Of the top deals in 2014 — that is, those involving leases or subleases, and not renewals — the biggest, size-wise, was JPMorgan Chase’s deal for 226,200 square

JPMorgan Chase took 226,200 square feet of space at 480 Washington Boulevard.

feet of space in Jersey City, one of the brighter spots in the area’s market. In taking space at 480 Washington Boulevard, a glassy 32-story tower owned by the LeFrak Organization in the Newport section of the city, the investment bank has expanded its footprint in the area. Last summer, the bank paid LeFrak $315 million for 575 Washington, a 22-story, 838,000-square-foot tower where

2014 MAJOR OFFICE LEASES TENANT

ADDRESS

CITY

SUBMARKET

SQ. FT.

LEASE TYPE

JPMorgan Chase & Co. RBC Capital Markets Charles Komar & Sons Merck & Co. United Water Management & Services Quidsi Forbes Media IMS Health FM Global Greenberg Traurig

480 Washington Blvd. 30 Hudson St. 90 Hudson St. 2 Giralda Farms 461 From Rd.

Jersey City Jersey City Jersey City Madison Paramus

Hudson Waterfront Hudson Waterfront Hudson Waterfront Route 24 Bergen Central

226,200 190,100 159,100 150,000 116,400

Sublease New New New New

10 Exchange Pl. 499 Washington Blvd. 100 InterPark Blvd. 300 Kimball Dr. 500 Campus Dr.

Jersey City Jersey City Parsippany Parsippany Florham Park

Hudson Waterfront Hudson Waterfront Parsippany Parsippany Route 24

94,020 92,720 62,000 55,220 47,040

New New New New New

Source: JLL Market Research Services’ data covering Northern New Jersey. 38 JUNE 2015 WWW.THEREALDEAL.COM

RBC Capital Markets leased 190,100 square feet at the Goldman Sachs Tower. CONTINUED ON PAGE 40

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OFFICE MARKET w New Jersey Market Report

CONTINUED FROM PAGE 38

Q1 2015 MAJOR OFFICE LEASES TENANT

ADDRESS

Securitas 9 Campus Dr. Langan Engineering 300 Kimball Dr. Arthur J. Gallagher & Co. 115 S Jefferson Rd.

CITY

SUBMARKET

SQ. FT.

LEASE TYPE

Parsippany Parsippany Whippany

Parsippany Parsippany Parsippany

81,280 71,540 51,000

New New New

Source: JLL Market Research Services’ data covering Northern New Jersey.

Charles Komar & Sons moved into 90 Hudson Street.

JPMorgan had been the sole tenant since 2000, when the building opened. Though the price appears to be a bargain, brokers say, JPMorgan may have also been enticed to put down roots by a hefty $224 million in tax breaks, phased in over time in exchange for job retention and creation. Other financial firms have also flocked to the area; 2014’s second largest deal was the Royal Bank of Canada’s 190,100 square feet lease at the Goldman Sachs Tower, a tapered high-rise on the water that at 40 stories is New Jersey’s tallest building. RBC won about $79 million in state aid to relocate from lower Manhattan. Also lured across the river was Forbes Media, the magazine publisher, which last year got $27 million in exchange for bringing 350 jobs to 499 Washington in Newport, another LeFrak address. (In 2010, Forbes sold its longtime home on Fifth Avenue in Greenwich Village to New York University for $65 million.) But far more typical are deals like the one announced in April, when New York Life Insurance Company said it would move to the Goldman tower from Parsippany and other locations, enticed by $34 million in incentives from the New Jersey Economic Development

300 Kimball Drive in Parsippany 40 JUNE 2015 WWW.THEREALDEAL.COM

Corporation, to be phased in over a decade. While many landlords struggle to fill floors, a handful are plowing ahead with new projects, like SJP Properties, which in November opened its Waterfront Corporate Center III, a 500,000-square-foot, 14-story mid-rise in Hoboken, and the third piece of a three-tower complex. So far, Pearson, the publishing company, has leased 200,000 square feet across five floors, and will say goodbye to a 400,000-square-foot facility in Upper Saddle River. Pearson, which also has a location in Old Tappan, won $66 million in state tax credits for remaining in New Jersey. Other tenants in the tower include Jet. com, an online retailer, on a full floor, and Regus, an office suite provider, which also has a floor. The remaining four floors are listed in the high $40s per square foot, said Jeffrey Schotz, an executive vice president of SJP, which is headquartered in Parsippany. In general, the Hudson waterfront submarket, which includes Jersey City and Hoboken, outperforms the rest of the state. In the first quarter of this year, its vacancy rate was 16 percent, according to JLL, versus 26 percent across Northern New Jersey. In the I-280 corridor, near Newark, meanwhile, the vacancy rate in the first quarter was 36 percent, the firm said. “The waterfront is part of the core of the Big Apple, and when the Big Apple is healthy, the waterfront is healthy,” Schotz, of SJP, said. Otherwise, Parsippany, which sits deep in suburbia at the junction of I-287 and I-80 in Morris County, appears to be on the upswing. Two of 2014’s largest deals — IMS Health, with 62,000 square feet, and FM Global, with 55,000 square feet — took place there. And in the first quarter, Securitas, a security firm, leased 81,000 square feet in a Class A complex owned by the Mack-Cali Realty Corporation; at the same time, Langan Engineering inked a deal for 72,000 square feet in a nearby office park where rents are in the mid-$30 range, in a relocation from Elmwood Park. Still, sluggishness remains. “The office sector has taken the longest to bounce back,”

Richard LeFrak, LeFrak Organization Chairman and CEO

said Elie Sofair, a sales agent with Cranberry Realty, which owns a pair of ofﬁce buildings in Parsippany that are slated to be carved up to cater to smaller tenants. Similarly, at 500 Campus Drive in Parsippany, landlord KBS, a real estate investment trust, is renovating Park Avenue at Morris County, a six-building 1990s complex, with a slew of new amenities designed to woo younger tenants. A gym with a yoga room was installed in 2014, said Heller of Avison Young, and a basketball court will go in this year. KBS also recently launched a shuttle service, via Mercedes-Benz Sprinter vans, to ferry workers to a train station and mall. In 2014, Greenberg Traurig, the law ﬁrm, leased 47,000 square feet there, though it moved from nearby. “There is so much space that’s a dime a dozen,” Heller said. “Suburbia has to reinvent itself.” TRD

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RETAIL TRENDS w New Jersey Market Report

Jersey’s malls buck national trend Wealthy Garden State residents make for low vacancy and strong sales at upscale shopping centers BY KERRY MURTHA

hile malls across the country struggle to survive, their more chichi brethren — upscale shopping centers — are thriving, raking in sales that more than double the national average. Industry insiders like Howard Davidowitz, chairman of retail consulting and investment banking ﬁrm Davidowitz & Associates, say a shrinking middle class is at the root of the disparity. “Middle-level malls are disappearing but those that cater to luxury shoppers are succeeding,” Davidowitz told The Real Deal. Nowhere is that more evident than in New Jersey, a shopping mecca with more malls per square mile than any other state in the country, some of which are home to the nation’s poshest department stores. Malls that house retailers with the most expensive price tags — accounting for approximately 10 percent of the Garden State’s 62 shopping centers — are faring the best. And they have no problem leasing their space.

The Mall at Short Hills in Millburn, New Jersey, is one of the most proﬁtable malls in the state.

“Middle-level malls are disappearing but malls that cater to luxury shoppers are succeeding.” —Howard Davidowitz, Davidowitz & Associates Vacancy rates at upscale malls in Northern New Jersey average 3 percent, according to CoStar Group, a provider of commercial real estate and marketing information. This compares to a rate of up to 20 percent at malls housing lower-priced retailers. “It’s a no-brainer,” said Davidowitz. “New Jersey has a lot of wealthy people and that is who malls need to cater to.” Westﬁeld Garden Plaza in Bergen County does just that. The 2-millionsquare-foot shopping center counts higher-end department stores like Nordstrom

NUMBER OF SHOPPING MALLS IN NEW JERSEY :

and Neiman Marcus among its 335 shops. The Garden Plaza averages nearly $775 in retail sales per square foot, $320 above the national average. It’s one of ﬁve shopping malls in Paramus, which together account for $5 billion in sales annually. But housing top-tier retailers is only part of the equation. “Patrons of these malls expect service and come for the shopping experience,” said Jeremy Ezra, executive vice president at RKF, a Manhattan-based commercial real estate agency.

TAKING STOCK: MALL PERFORMANCE IN 2014

Source: International Council of Shopping Centers

10% of which are considered upscale

42 JUNE 2015 WWW.THEREALDEAL.COM

National average for healthy malls National average for failing malls Average for upscale New Jersey malls Source: CoStar Group

RETAIL SALES PER SQUARE FOOT

VACANCY RATE

$475 $300 $800

10% 20% 3%

RETAIL TRENDS New Jersey Market Report

Westﬁeld Garden Plaza in Bergen County counts Nordstrom, Neiman Marcus and Tiffany & Co. among its tenants.

Rockaway Townsquare Mall in Hibernia

“Our shoppers tend to meet friends here for lunch and spend the day,” said Michael McAvinue, general manager of The Mall at Short Hills in Millburn, one of the most profitable malls in the state with average retail sales of $1,000 per square foot. Among Short Hill’s value-added perks are valet parking, restaurant reservation services and complimentary strollers — even for pets. “We are constantly trying to better serve our customers’ needs,” said McAvinue, who makes sure the mall’s common areas are adorned with fresh-cut flowers each day. Short Hills, at 1.3 million square feet, is the only mall to house Saks Fifth Avenue, Bloomingdale’s, Chanel and Cartier all under one roof. McAvinue added that “you would have to go to Manhattan for that kind of luxury.” By contrast, the malls that rely on midpriced anchor stores, like JCPenney and Sears — both of which recently closed a number of stores due to sluggish sales — are faltering. According to the real estate research firm Green Street Advisors, mid-

market malls account for nearly half of the 1,050 national total. Of those malls, about 25 percent are struggling, with sales below $300 per square foot. New Jersey’s dense population has helped its mid-level malls to fare slightly better than average. The Rockaway Townsquare Mall in Hibernia and the Woodbridge Center in Woodbridge, which both count JCPenney and Sears among their anchor stores, have reported around $400 in sales per square foot recently. David Albertson, senior marketing director at the Woodbridge Center, said management is always looking for new ways to enhance the mall’s performance. “Retailers are constantly evolving with new concepts, or in most occasions, reinventing themselves,” said Albertson. He said the mall has opened 10 new stores over the past year. A recent addition is Boscov’s, a Pennsylvania-based middlelevel store, which rebuilt itself after filing for bankruptcy in 2008. Thanks in large part to the success of upscale malls, some recent news offers hope for malls nationwide. The International Council of Shopping Centers and the National Council of Real Estate Investment Fiduciaries reported signs of growth in the industry in 2014. A recent report cited a 21 percent increase in net operating income for malls across the country and a rise in sales per square foot to $475. “The 2014 data paints a strong picture for the year ahead,” said Jesse Tron, ICSC spokesperson. “Record growth in these key indicators signifies a healthy outlook and the ability of the industry to innovate to fit the needs of today’s consumer.” TRD

Malls relying on mid-priced anchor stores are faltering. WWW.THEREALDEAL.COM JUNE 2015 43

ON THE RISE w New Jersey Market Report

Squeezing high-end housing into Hoboken’s waterfront Developers build more luxury condos to satisfy both New York transplants and growing young families BY ANNE FIELD

t first glance, you’d think Hoboken couldn’t squeeze in another square inch of residential construction. Not only is it just one square mile, but development in the former industrial city has been going on for decades. Currently, only around 7 percent of the construction of apartment buildings with 40 or more units in Hudson County is taking place in Hoboken, according to real estate market research firm Reis. But there’s still plenty of action underway in the city with a population of 50,000. Driven in large part by mushrooming prices in New York City and an easy commute to the Big Apple, there are at least five large apartment buildings and mixed-use developments in the works, along with many smaller projects. An estimated 1,804 residential units were approved by the zoning and planning boards from 2010 to this year, according to the mayor’s office. Developers are building to satisfy demand from young professionals moving in from across the Hudson, and the desires of growing families looking to stay in the city. “It’s a small place, but we’re still seeing development in the works,” said Henry Waller, vice president of Toll Brothers City Living, which is developing two large properties in Hoboken. As you’d expect, many of the most luxurious developments are going up by or near the waterfront, with a mix of rentals and condos. Toll Brothers, for example, has two condo projects in the works on the northern end of the waterfront. Both were started in 2005, are partially completed and feature amenities including pools, fitness clubs, attended lobbies and residence clubs. There’s the Hudson Tea building, a former Lipton Tea factory converted to rentals in the 1990s that Toll Brothers then bought in 2005 and turned into a condo

44 JUNE 2015 WWW.THEREALDEAL.COM

“It’s a small place, but we’re still seeing development in the works.” —Henry Waller, Toll Brothers Red Bridge Group

development with 525 units. The company then built a 116-unit addition, followed by another 157-unit building, and is now constructing a larger, 236-unit building. Another, which will be around 100 units, is in the design phase. The other development, known as Maxwell Place, will be a four-building condo complex. So far, 755 units are completed. The third building, which the company started closing about a year ago, is about 80 percent sold, according to Waller. The last building, which is in pre-design phase, will have around 100 units. Apartments in both projects command about $900 to $1,000 a square foot; two went for $1,300, according to Waller. That’s compared to an average price of about

$2,586 per square foot for luxury condos and co-ops in Manhattan, according to Jonathan Miller, president and CEO of real estate appraisal ﬁrm Miller Samuel. Hoboken-based developer Bijou Properties is ﬁnishing up a mixed-use, 12-story, 212-unit waterfront-area rental known as Park + Garden. Previously, the site housed a textile factory and then a parking garage. The LEED Gold-rated property has 15,000 square feet of retail and 32,000 square feet of educational space, which will contain a charter school and a fully automated garage. Rents are still being determined for the building, which should come on the market in July, according to Larry Bijou, managing partner. He describes them as

Maxwell Place, which will be a four-building condo complex on the Hudson River, has 755 units completed so far. CONTINUED ON PAGE 46

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ON THE RISE w New Jersey Market Report

“very high end.” Top of the line rents in the area generally go in “the mid-40s” a square foot, according to Bijou. Perhaps the biggest project in the works near the waterfront is a plan to develop about 50 acres along the city’s NJ Transit tracks, spanning both Hoboken and Jersey City. “This is underutilized property owned by NJ Transit that can be repurposed into a vibrant mixed-use development,” said Jim Driscoll, senior vice president of LCOR, which was selected eight years ago to be the developer. Driscoll expects the lengthy approval process of the development by multiple

Photo credit: David DiCello Photography

CONTINUED FROM PAGE 44

New luxury condo developments will soon join the W Residences in Hoboken.

government agencies to take two years, with ﬁnal completion of the project in 2019. The complex probably will be a rental, though that hasn’t yet been determined. There’s also development on Hoboken’s west end, which has become increasingly trendy since NJ Transit opened up a light railway station there 10 years ago. On the site of a former vacant lot there, Bijou Properties is working on 900 Monroe, an 11-story, 135unit mixed-used luxury rental, which is a joint venture with Intercontinental Real Larry Bijou of Hoboken-based Bijou Properties

Bijou Properties is ﬁnishing up a mixed-use, 212-unit waterfront area rental known as Park + Garden. 46 JUNE 2015 WWW.THEREALDEAL.COM

Estate Corp. Slated to be completed in the fall, it will have 13,500 square feet of retail space, including a day-care center and a 135car parking facility. Also, in the west and southeast of Hoboken, many smaller-scale developments are underway. Red Bridge Group, for one, is developing five small high-end projects, which range from two to four units. All are tear-downs of existing structures. The apartments in one two-unit building have already sold — one for $1.7 million and the other for $1.8 million — even though the development hasn’t been completed yet. “Hoboken is an especially good fit for our niche,” said managing partner John Heidenry. There is an additional hassle for developers in Hoboken, however. Because so much of the city was industrial, many projects require environmental clean-up work. One major example is Willow14, a sevenstory, 140-unit mixed-use building on the site of a former gas manufacturing plant. Developer Advance Realty, which closed on the property in 2011, faced what managing director of development Michael Sommer calls “a very challenging clean-up.” In order to remove the potentially contaminated soil, builders had to go all the way down to the bedrock, an unusual move. The building, which Sommer expects to begin renting in March 2016 and is the developer’s first property in Hoboken, will also include 20,000 square feet of retail space and 363 parking underground parking spaces. “In Hoboken, there’s always some environmental remediation,” said Bijou. TRD

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TRADING BUILDINGS w New Jersey Market Report

Top 10 building sales in Northern Jersey Some of the region’s hottest retail, commercial and residential properties changed hands over the past year

1) 651 KAPKOWSKI ROAD (MILLS AT JERSEY GARDENS), ELIZABETH

2) 575 WASHINGTON BOULEVARD (THE CHASE BUILDING), JERSEY CITY

Property Type: Retail Sale Price: $951.6M Listing Brokerage: N/A

Property Type: Ofﬁce Sale Price: $315M Listing Brokerage: N/A

Sale Date: 1/15/15 Buyer: Simon Property Group Seller: Glimcher Realty Trust

Sale Date: 6/6/14 Buyer: J.P. Morgan Seller: LeFrak Organization

3) 67 CHAPIN ROAD, MONTVILLE

4) 1130-1133 GRAND STREET, HOBOKEN

5) 900 CREST LANE, FORT LEE

Property Type: Multi-family Sale Price: $136M Listing Brokerage: Kislak

Property Type: Multi-family Sale Price: $125.5M Listing Brokerage: HFF

Property Type: Multi-family Sale Price: $120M Listing Brokerage: HFF

Sale Date: 7/11/14 Buyer: Cammeby’s Seller: Garden Homes

Sale Date: 6/9/14 Buyer: J.P. Morgan Seller: PNC

Sale Date: 12/8/14 Buyer: Pantzer Seller: Capri

6) 1 MEADOWLANDS PLAZA, 7) 5 LAWRENCE STREET, EAST RUTHERFORD BLOOMFIELD

8) 2050 CENTRAL ROAD, FORT LEE

9) 229 EAST 22ND STREET, BAYONNE

10) 120 YORK STREET, JERSEY CITY

Property Type: Ofﬁce Sale Price: $108.7M Listing Brokerage: CBRE Sale Date: 6/27/14 Buyer: Vision Properties, Quarry Capital Seller: KBS REIT II

Property Type: Multi-family Sale Price: $97M Listing Brokerage: BlueGate Partners Sale Date: 12/1/14 Buyer: GID Seller: BNE Real Estate

Property Type: Retail Sale Price: $89.4M Listing Brokerage: Eastdil Sale Date: July 2014 Buyer: Kite Realty Group Seller: Inland Diversiﬁed Real Estate Trust

Property Type: Multi-family Sale Price: $79M Listing Brokerage: BlueGate Partners Sale Date: 12/1/14 Buyer: GID Seller: BNE Real Estate Group

Property Type: Multi-family Sale Price: $104M Listing Brokerage: CBRE Sale Date: 11/12/14 Buyer: Clarion Partners Seller: Prism Capital Partners, Greenﬁeld Partners

Source: Data from CoStar and Real Capital on sales in Bergen, Passaic, Morris, Sussex, Hudson, Union and Essex counties from May 1, 2014 to May 14, 2015. 48 JUNE 2015 WWW.THEREALDEAL.COM

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NY VS. NJ w New Jersey Market Report

How rival states stack up BY JENNIFER WHITE KARP

certain subset of New Yorkers (read: hipsters with growing families) likes to think they recently “discovered” New Jersey. While this is clearly a myopic — and maybe even an antagonistic — perspective, there’s truth to the idea that Northern New Jersey is having its moment in the sun, and that some of that

is due to New Yorkers, tired of their tiny but expensive homes, immigrating to the Gold Coast. But it is not love at ﬁrst sight: New York and New Jersey have long enjoyed a rivalry of epic proportions. Here’s The Real Deal’s take on how the states stack up.

9,000 vs. 6,500 The approximate number of residential units currently being built along New Jersey’s Gold Coast compared to the number of new condo units expected to open for sale below 96th Street in Manhattan in 2015.

Marlon Brando in “The Godfather”

$150 vs. $271 The average hotel price paid in Atlantic City compared to New York City, from a survey of the top 50 most popular domestic destinations in 2014 visited by U.S. travelers.

18 Frick Drive, Alpine, N.J. Bruce Springsteen

$49 million vs. $150 million

Governor Chris Christie

The priciest listing in New Jersey, which belongs to a 30,000-square-foot, fourlevel stone mansion at 18 Frick Drive in Alpine — one of the country’s most expensive zip codes — compared to the priciest listing in New York City, a triplex penthouse at the Chetrit Group’s 550 Madison Avenue.

Mets, “The Godfather,” Bruce Springsteen vs. Mets, muscle cars, Jon Bon Jovi

$323,400 vs. $710,000 The median value for a home in Essex County in 2015 compared to the median price of a one-bedroom apartment in Manhattan. The median value for a home in Bergen County is $414,500.

New Jersey Governor Chris Christie’s favorite sports team, movie and musical artist pitted against New York Governor Andrew Cuomo’s top picks for entertainment.

550 Madison Avenue

$2.1 billion vs. $600 million The amount New Jersey committed to corporate subsidy programs in 2014, compared to the sum spent by New York City since 2010 for similar purposes.

130 miles vs. 127 miles New Jersey’s coastline, where a visit is called “down the shore,” compared to New York’s coast, where the same phrase causes confusion.

Muscle cars

The Alexander Group at Douglas Elliman, one of the many broker teams based in NYC.

2,497 vs. 13,375 The number of brokers in Hudson County, compared to the number of brokers in Manhattan in 2014.

Jon Bon Jovi Governor Andrew Cuomo

Sources ﬁrst column: 1) Hotel.com, 2) Zillow.com, TRD, 3) WSJ.com, 4) Wikipedia. Second column: 5) TRD, Corcoran, 6) TRD, 7) Department of Banking and Insurance in New Jersey, New York State Department of Licensing. Third column: 8) Washington Post, NJ.com, New York Daily News. 50 JUNE 2015 WWW.THEREALDEAL.COM

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