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Beyond the Gold Coast

Residential developers cross socio-economic lines to satisfy a range of customers

Modera 55 Morristown.

Demand for multifamily residential and mixed-use development is strong in New Jersey, but high-priced, luxury residences in places like Hoboken, Jersey City and parts of Newark account for only part of the story, said Edwin Cohen, a principal in the real estate firm Prism Capital Partners LLC. “The state lacks supply for middle-income individuals,” he said. “That’s the market we’re focusing on, mainly at or near train stations and other mass transit.”

One such project is Dunellen Station, the repurposing of the former Art Color industrial facility into a mixed-use, transit-oriented community. Located close to the borough’s downtown business district and directly across from the train station, plans call for some 250 one- and two-bedroom apartments, along with 10,000 square feet of retail. Adjacent to Dunellen Station, a “national homebuilder” will put up 130 townhouses for sale, Cohen added. “Dunellen Station residents will enjoy a full amenities package including a clubhouse, meeting rooms, fitness center, outdoor pool with patio and entertainment area. The design reflects the character of the former Art Color building, with the retail component and clubhouse complementing the neighborhood with a transit theme. They’re top quality, but the units won’t carry a Gold Coast price point.”

Transit-oriented communities “are a big deal,” he said. “They appeal across demographics, from millennials to baby boomer downsizers who are selling their home. But there’s a shortage of these kind of quality-built units in this price range.”

Dunellen Station.

Mill Creek Residential, one of the nation’s largest multifamily developers and operators, has also built some communities in New Jersey that are located adjacent to major transportation centers that offer bus, light rail, and New Jersey Transit access.

“While much emphasis has been placed on the Gold Coast by other developers, Mill Creek has also established transit-oriented communities in other suburban locales like as Parsippany and Morristown,” said Russell Tepper, senior managing director at Mill Creek Residential.

“We’re bullish on northern New Jersey suburban markets,” he said. “They’re very popular among millennials and others who work in New York City.”

Don’t ignore infrastructure

The commercial-industrial, office and residential developments going up in New Jersey may be geographically and demographically dispersed, but they all have one thing in common — access to infrastructure — according to Greg Lalevee, business manager of International Union of Operating Engineers Local 825 and chair of the Engineers LaborEmployer Cooperative (ELEC).

“Projects like the elevation of the Bayonne Bridge [which was raised by about 64 feet, to allow larger ships to pass under] and the widening of the New Jersey Turnpike [from Exit 6 to 9] led to more warehouse development down south to exit 6 and beyond, as well as other kinds of development,” noted Lalevee. “Infrastructure investment has a direct, positive effect on real estate activity.”

He was encouraged last year when Gov. Phil Murphy signed legislation that greatly expands the ability of public agencies to enter into public-private partnerships (P3s) for capital projects aimed at reinforcing the state’s infrastructure. “The new P3 legislation may open up opportunities to build more train station and other development, like the Hoboken Yards project,” he said. “When you bring the private sector in, you’re bringing in additional funding and creating more jobs; and the projects can then drive new tax revenue.”

Walkable Morristown and Asbury Park

Rendering of Asbury Ocean Club.

Two such Morristown developments are Modera 44 and Modera 55, a total of more than 400 units on Prospect Street. “They’re walkable to downtown, and each development offers multiple amenities,” he said, including a 24-hour fitness center, a resident clubhouse with multiple ‘social zones,’ and a coffee bar-internet café at Modera 44; and a 7,000 square-foot rooftop deck with outdoor kitchen and bar, lounge seating at Modera 55.

“Our residences appeal to millennials, empty-nester baby boomers and others,” Tepper added. “Today, many people want to live in a place that’s walkable to a train station and walkable to downtown.”

Recognizing those kinds of trends spurred iStar, a REIT, to build Asbury Ocean Club, a high-rise luxury residential development and hotel where apartments start at close to $1 million.

Each unit features oceanfront views with a wraparound terrace and floor-to-ceiling windows. Residents also get 24/7 concierge service, a terrace with a 65-foot by 30-foot pool overlooking the ocean, a full-service pool bar and grill, a garden pavilion with reflecting pool and an outdoor lounge with fireplace. Other amenities include a fitness center, demo-kitchen, cinema, library and billiards room, business center and spa.

Cheripka

“We are constantly hearing from buyers that they are drawn to walkable communities with a diverse and vibrant downtown that is easily accessed by mass transit, and this is exactly what Asbury Park has to offer,” according to iStar Senior Vice President of Land & Development Brian Cheripka. “You have the serenity of the ocean and beach complemented by the energy of a thriving downtown scene and nearby public transportation. To be able to leave the hustle and bustle of Manhattan, get on a train and arrive in Asbury Park in 70 minutes and have your toes in the sand in 80 minutes is very compelling, particularly given that the Hamptons takes three times that long.”

Prospective buyers include residents from “across New York, Pennsylvania and New Jersey including Mercer, Bergen, Hudson and Monmouth Counties,” he added. “There has been strong interest from New Hope, Pennsylvania where the food and music scene is very similar to the energy of Asbury Park.”

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