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Experts Address Industry Trends at MAREJ-hosted N.J. Apartment/Multifamily
Summit
Panel Discussions Include New and Emerging Trends and the Future of
Residential Development
ISELIN, N.J., Oct. 7, 2016 – The Mid-Atlantic Real Estate Journal’s (MAREJ) 3rd
Annual New Jersey Apartment/Multifamily Summit recently brought together more than
100 of the region’s top commercial real estate professionals, along with five panels of
industry leaders, to examine current trends and what the future holds for New Jersey’s
apartment market. The morning event took place at the APA Hotel in Iselin.
Multifamily Investment: Where is the Action and What’s Next?
A panel entitled, “New Jersey Multifamily and Investment Update & Opportunities,”
was moderated by Brian Whitmer, senior director of Cushman & Wakefield of N.J.
Panelists including Elie Rieder, founder and CEO of Castle Lanterra Properties (CLP);
Timothy Touhey, team leader of Investors Bank; Mark A. DeLillo, founder and managing
partner of BlueGate Partners; and Nathan Franco, vice-president of acquisitions and
development for HAP Investment Developers.
Hudson County, particularly Jersey City, has led the state in multi-family construction in
recent years. The proximity to New York City and exceptional transportation
infrastructure makes it a viable alternative to renters who no longer want to pay high
Manhattan rents. Even so, panelists agreed there is growing interest among investors in
communities to the south and west. Harrison and Montclair were offered as examples of
communities with potential for growth and greater value play as compared to Jersey
City. Philadelphia is reportedly attracting interest from local and international investors
alike, with foreign investment increasing as Europe experiences negative/zero interest
rates.
Invariably, the best projects in the best locations will continue to attract developers,
investors and renters. One community experiencing a surge in multi-family investment
activity is Bayonne, an “up and coming area” according to Rieder, whose firm
specializes in identifying investment opportunities in multi-family properties. He points to
CLP’s recent acquisition of Alexan CityView (renamed Harbor Pointe), a 544-unit
apartment complex on the Bayonne waterfront.
“We purchase properties that we believe have intrinsic value, and then identify
opportunities to add value through repositioning and recapitalization, said Rieder. “At
Harbor Pointe, we are not only drawing new residents from those who have been priced
out of lower Manhattan, but also from Hoboken and Jersey City, where rents have
climbed dramatically in the last several years. We feel that Class-A luxury properties in
Bayonne, particularly those on the waterfront such as Harbor Pointe, will be able to
capitalize on this flight to value.
To meet this growing demand, we’ve added and upgraded amenities at the property,
such as adding a new fleet of shuttle buses (with free WiFi) to transport residents to and
from Jersey City where they can connect to the PATH train and light rail system. We’ve
made extensive upgrades to the pool area to give it more of a resort feel, and we intend
on undertaking a major renovation project to upgrade the already impressive 90,000square-foot clubhouse, resident lounge, and fitness center. Ferry service to lower
Manhattan from the peninsula in which Harbor Pointe is situated is also in the planning
stages. We are working closely with the City of Bayonne to promote its continued
growth, and are excited to be at the forefront of this expansion.”
Other investment trends discussed included the slowdown in acquisition activity, the
uptick in refinancing existing properties and “age 55 and over” communities gaining
momentum in the multi-family landscape.
Development Trends: Public Private Partnerships and a Newark Renaissance?
In a panel called “Building a Successful Project from Start to Finish: Development
Trends,” moderator Timothy R. Larson, leader of Citrin Cooperman’s international tax
practice, led a panel of experts including Barry Poskanzer, partner, Poskanzer Skott
Architects; Carmelo G. Garcia, executive vice-president and chief real estate officer of
Newark CEDC; and James Caulfield, partner at Fields Development Group.
Panelists agree that Newark is undergoing a tremendous renaissance due in part to its
tremendous infrastructure and proximity to Newark Liberty International Airport. This
infrastructure caters to millennial renters, many of whom are slow to move towards
home ownership in favor of apartment housing situated in walkable communities near
public transportation. In addition to Panasonic and Prudential headquarters, Newark
also is home to several institutes of higher education, and many of these schools’
graduates are choosing to remain in the city after graduation. The panel predicts that as
cities become more walkable, demand for rental housing will increase.
Importantly, panelists said Newark officials are committed to seeing the city grow and
propel it in a healthier direction. New development projects here also will create
construction jobs and bolster the city’s tax base.
Panelists concurred that the relationship between developer and city administration is
paramount, as is understanding how the process differs in small cities and suburbs
versus larger cities. “It’s a very different planning process,” said Poskanzer, explaining
that larger cities have planning departments while smaller towns don’t. He also
explained that new developers and offshore investors in particular experience “cultural
differences,” not understanding that planning is often “a quiet back and forth,” while
institutional and foreign investors are very “by the books.” Underscoring the importance
of public/private partnerships to the success of a project he added, “by the time a
project gets to us, it means everything.”
Apartment development upticks impact suburbia as well: As millennials start having
families, they often move from urban to more suburban locales. “Cities such as Jersey
City are still going strong but newer developments also are becoming increasingly
common in the suburbs,” said Poskanzer, citing suburban bedroom communities in
Bergen County as just one example where this trend is occurring. “In these
communities, multifamily housing provides an option for older native residents who are
ready to downsize, but wish to remain in the area. As a result, this makes single-family
housing stock available for growing millennial families,” said Poskanzer.
While several northern New Jersey towns offer rail access to New York City, Poskanzer
also advises that parking and higher density housing go hand in hand. “It’s a mistake to
think that because of mass transit access, only one car per family is needed. Outside of
commuting, family members still need a car for travel to shopping destinations and a
range of other activities. In cities where space limitations exist, garaged parking offers a
viable yet expensive alternative.”
Panelists also discussed affordable housing (AH) in the multifamily sector, citing AH as
a housing need that has grown exponentially in the last five years and is likely to
continue. Panelists said more AH stock has been built in the past two years than in the
last decade and this trend will continue. To that end, developers need to become more
familiar with AH and the obligations required when building these units.
Other panels at the 3rd Annual New Jersey Apartment/Multifamily Summit included
“Capital’s Comeback: The Evolution of Apartment Financing,” “Apartment Market
Overview,” and Affordable Housing Market – State of the Industry.”
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Visit www.marejournal.com/events for more photos.
Photo caption left, l-r: Brian Whitmer, senior director/Cushman & Wakefield of N.J.;
Elie Rieder, founder and CEO/Castle Lanterra Properties; Mark A. DeLillo, founder and
managing partner/BlueGate Partners; Nathan Franco, vice-president of acquisitions and
development/HAP Investment Developers; Timothy Touhey, team leader/Investors
Bank; Linda Christman, publisher of Mid Atlantic Real Estate Journal
Photo Caption right, l-r: Barry Poskanzer, partner/Poskanzer Skott Architects;
Carmelo G. Garcia, executive vice-president and chief real estate officer/Newark CEDC;
James Caufield, partner/Fields Development Group