New Jersey apartment market still very active

New Jersey apartment market still very active - The Boroughs/Suburban MarketsReal Estate Weekly, June 9, 1999 E-mail Print Link Marcus & Millichap Real Estate Investment Brokerage Company recently released its Apartment Research Report for the Northern/Central New Jersey market, which continues to be active, according to David E. Thurston, regional manager. The following are the most significant aspects of the report:
January's unemployment rate for the area was 4.4 percent, marking the 15th consecutive month at less than 5 percent.
After a long decline during the 1980's, Jersey City is booming. Despite a drop in manufacturing jobs, the city's employment level grew by more than 4 percent between 1993 and 1997. The finance and insurance sectors continue to gain jobs as companies move to the area. These changes have strengthened demand and forced vacancies in all product types into the single digits. As availability tightens, developers have begun to break ground on numerous projects all over the city.
Related Results NJ apartment market... Tarragon Corporation... Kislak Company, Inc.... Apartment buy makes cents Decision Resources,... Most Popular Articles in Business Research and Markets ...Do Us a Flavor - Ben ...eBay made easy: ready ...Katrina's lawsuit ...Wal-Mart's newest ...More » More than 100 companies have moved to the state in recent years, a trend that is expected to continue.
The Lefrak Organization recently completed its second of four residential complexes that comprise the Towers of America. The 445-unit complex became fully occupied in less than six months. Other residential projects include Avalon Cove II, a 220-unit tower, and the Marbella and Portofino, with a combined total of 561 units. New office and hotel projects include the American Financial Exchange, 90 Hudson Street and Courtyard by Marriott, with many others in the pipeline.
Approximately 5,400 multi-family units were permitted in 1998, the highest number in eight years.
Permits for new multi-family buildings of five or more units in the five-county region have been averaging 2,907 per year since 1993. Hudson and Bergen counties have been most active, averaging 274 units permitted per year during the same period. During the past year, 4,013 new units have been authorized in the region, an 80 percent increase from 1995's 2,229 units. In Hudson County, along the waterfront, 1,234 permits have been issued, while 780 units have been approved in Bergen County. Union County registered a small increase, while both Essex and Passaic counties have slowed considerably, by 85 percent and 82 percent, respectively.
Vacancies tightened further in 1998, with virtually no availability of upscale apartments along the Gold Coast.
Although construction activity continues, overall vacancies should decline slightly. Increased demand from New York City professionals seeking more affordable housing should offset the increased supply of new luxury units. The Gold Coast offers lower rents and residents can reach Manhattan in minutes via ferries and PATH trains.
Rental rates will increase modestly in 1999 as demand persists and new supply remains in check.
Strong employment has been a major factor in forcing rents upward. As with vacancies, however, rental rates vary across submarkets. Along the Gold Coast, where demand is strongest, rental rates continue to lead the market. Monthly rents for one-bedroom apartments range between $1,050 and $1,300. Two-bedroom apartments command between $1,550 and $1,850 per month, while rents for three-bedroom apartments can reach as high as $3,600. Rates for Class A luxury apartments are approximately 2 to 3 percent higher.
The number of apartment sales transactions dropped slightly in 1998, with Hudson and Essex counties registering the most activity once again.
Apartment sales volume throughout the region declined 8.3 percent between 1997 and 1998. Union County recorded the only increase in sales velocity during the period, of 24 percent. During the past year, a total of 209 properties in excess of $250,000 changed hands, 82 of which were in Hudson County. In Essex County, 52 properties sold, while Bergen and Passaic counties registered 29 and 21 sales, respectively. Hudson and Essex counties recorded the most sales activity in 1998.
Marcus & Millichap Real Estate Investment Brokerage Company is the largest national commercial real estate firm that specializes in the brokerage of investment property. The company has 32 offices nationwide and in 1998 had sales of $5.1 billion.
COPYRIGHT 1999 Hagedorn PublicationCOPYRIGHT 2004 Gale Group
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