all of my rentals are flying off the shelves and every time I get a vacancy I raise the rents no problem.

I know The beacon has been having wonderful open houses for sales and the rentals from owners have been going steady.

New Jersey Rentals Remain Robust

New York Times
By ANTOINETTE MARTIN
Published: October 4, 2008

RIGHT now, the housing market in New Jersey is being described by those in the know as ?stable,? ?vital? and ?trending upward.? The rental market, that is.


ADDED RENTAL HOUSING A rendering of 800 Madison, which will provide several hundred new units in Hoboken. Rents will range up to $5,495.

The overall occupancy rate for rental buildings in the state is currently 97 percent, reported Jose Cruz of Cushman & Wakefield, which provides advice to real estate investors. Given the persistent stress on the home-buying market, Mr. Cruz said, the high rental occupancy rate is expected to stay where it is for the immediate future, or perhaps even tighten further.

Perhaps not coincidentally, monthly costs for renters are steadily rising ? at an average pace of 4 percent to nearly 7 percent a year, according to various analysts? calculations. Cushman projects that average monthly rent for all of 2008 will be up by 6.8 percent over 2007 (rising to $1,541 by year?s end, from $1,443 last year).

Developers like these statistics so much that many are pressing forward with new multifamily rental projects, at a time that many condominium projects are being tabled or shelved.

AvalonBay Communities, a national developer and owner of exclusively rental buildings, is setting out to expand its presence in New Jersey ?in any way possible,? said its state division chief, Ron Ladell. ?These are definitely boom times for us here.?

AvalonBay, which owns 3,850 rental apartments in 12 New Jersey communities, will break ground this month on a 164-unit rental complex with attached retailing in North Bergen.

It also recently took over as the lead developer of the 406 rental units and adjacent retail space proposed at Westmont Station in Wood-Ridge.

The Westmont project was created by Somerset Development, and is still planned to include more than 800 residential units and a new rail station. But until AvalonBay stepped in, a lack of financing had stalled progress for about two years. Construction is set to start in January.

The Value Companies, another large player in New Jersey?s rental market, is a month away from opening 140 Mayhill, a 158-unit complex in Saddle Brook in Bergen County. It anticipates a quick lease-up. ?People there are desperate for new quality rentals,? said Andrew Abramson, the company?s president. ?I?ve been in the business 55 years, and this is as good a time for rentals as I?ve seen.?

In Hoboken, the Tarragon Corporation has begun marketing several hundred new rental units at an amenity-laden building called 800 Madison. It is the sixth residential building at the Upper Grand development on the city?s west side. Two older buildings are condos, but the others are rentals.

At 800 Madison, monthly rents will range from $2,375 to $5,495, for one-, two- and three-bedroom units of differing sizes and configurations. Those rates are steep, considering that the complex is not near the waterfront ? and only months ago, they were not quite as high.

Last summer, Tarragon was offering leases ranging from $2,250 to $5,000 a month. Cushman?s market analyst, Mr. Cruz, noted that Tarragon was following the pattern it had established when another building, 1000 Madison, opened last year at Upper Grand. ?At first, Tarragon figured on charging $2.80 per square foot, but they ended up leasing at $3.15 per square foot? because demand was strong.

Still, this won?t continue indefinitely, said Jeffrey G. Otteau, whose Otteau Valuation Group keeps tabs on the residential market for many builders and brokers.

?The number of units in the pipeline in the state is, well, dramatic,? said Mr. Otteau, adding that, in fact, it was already time to start thinking about the issue of overbuilding.

If the supply of rental housing grows too fast, it will meet or even outstrip demand, and the market will stall ? exactly as it now has stalled for condominiums, to the detriment of various projects in northern New Jersey.

Looking just at downtown Jersey City, where city officials have encouraged a raft of new residential projects, a total of 5,122 rental units, at 22 different sites, are under construction.

Another 8,533 units, at 46 construction projects, have been approved by Jersey City officials for the downtown area, so that developers could proceed with them at any time.

Projects can certainly be switched from condo to rental, or vice versa, even after construction has begun, and plans can be dropped along the way, several New Jersey developers pointed out.

Mr. Otteau agreed that it was unlikely that all 13,655 rental apartments would hit the market within the next few years in downtown Jersey City.

?Still,? he said, ?it?s a general caution to keep in mind.?

Several developers ? including Michael Barry, a principal with the Applied Development Company based in Hoboken ? said the demand for rental units was much greater than the supply, and would stay that way for some time.

?Even now, with the overall economic uncertainties and people on Wall Street losing their jobs, the demand is holding up ? and certainly could increase, for that same reason,? said Mr. Barry, whose company?s high-end rental properties in Hoboken, Jersey City and Long Branch have consistently been fully rented. ?We see more people who have the ability to buy a home nonetheless choosing to stay on the sidelines, and rent, until things settle down.?

Mr. Abramson, of the Value Companies, which is based in Clifton, said his company had seen a surge of interest in its rental properties recently, as it became clear that the days of subprime mortgage lending were truly over.

?There is a now a whole new class of potential renters ? those who were incorrectly granted mortgages in the past,? Mr. Abramson said. ?Those people are permanently out of the for-sale market, and will never get mortgage financing. Whether they like it or not, they are renters for life ? and some appear to have realized it.?

In the first two weeks of September at Value?s 903-unit Gateways at Randolph complex, Mr. Abramson said, the number of inquiries concerning available apartments suddenly jumped by 50 percent.