Key Take Aways from Northern New Jersey’s July, 2021 Meeting
• Joe Mele (Dresdner Robin) reported on two pending NJ legislations: 1) large warehouse development affecting nearby communities and 2) electric vehicle charging stations. He also noted that the price of lumber has come down over the last few weeks. Charles Hecht stated that Jersey City is still very pro-development, with much urban redevelopment also in Hudson, Bergen, and Morris counties. Some towns are hesitant to move forward with affordable housing units.
• According to Paul Fiorilla (Yardi Systems), NJ multifamily continues to grow, with rents up 4% to average of $62 per month compared to $23 nationally. Over the last 3 months, central Jersey has experienced 6% year-over-year growth while northern NJ remains flat. Other economic factors reported: rebounding economic growth, jobs up, personal savings up by $2.7 million nationally. Multifamily absorption in NJ has been strong in the last 12 months with continued demand for single homes to own or buy/rent.
• Jonathan Kristofich (NAI James E. Hanson) described the metamorphosis of downtown Hackensack, including the completion of more than 1200 apartments and new retail over the past 5 years. 2,000 additional apartments are under construction, including a 14-story brick building on Main Street. The dynamic redevelopment of Hackensack will feature a 20-acre site with a river walk along the Hackensack River plus 700 additional apartments and 500 SF of retail.
• Gregory James (NAI James E. Hanson) summarized several markets: Industrial continues to be hot, especially in the I-95 corridor. Five office complexes are in play: Merck’s Kenilworth property; half of Novartis East Hanover campus; IBM’s Franklin Lakes property; two Prudential buildings in Roseland (‘80s vintage & needing rehabilitation). Office work still trending toward split weeks (2-4 days in office/1-2 days virtual). Some migration of large offices from NY/NJ to states with lower rents and taxes. Fluctuating lumber pricing ($320/ft. in Jan. to $1650/ft. March-May to current $612/ft.) is impacting cost of construction; 4 or 5 deals currently on hold. Land pricing for multifamily down 10-20%; offerings at $50-70K per door. 10-year commercial rates coming down from $185 in spring to $140-145. Banks more cautious: 10-year commercial financing @ 2.96 to 3%; 5-year retail and office at 3-3 ½% for 5 years.
• Guest Paul Abramson (SolarKal) provided an overview of his firm’s commercial solar energy programs for a variety of businesses including retail, commercial, industrial, and xxx. He reported that NJ’s Board of Public Utilities has recently announced a 50% reduction in TRECs (Transition Renewable Energy Certificates), effective August 27th.
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