Using this map that is slightly outdated as a reference (April 2014): there will be 7,205 units currently being built in the DTJC neighborhood that will be utilizing the Grove St and/or Exchange place stations.

You should focus on the 6000 apts that are being built not on the proposed 18000 apts most of these which may never get built.

Summer Dawn Hortillosa | The Jersey Journal

Jersey City is seeing a record level of new apartments being built, with booming development in Downtown and Journal Square, according to one report.

The Wall Street Journal says Jersey City has 5,609 units under construction in the Journal Square and Downtown this year. Last year, WSJ says the city only had 3,009 projects under construction.

This is a new record, beating 5,122 projects in 2008, says WSJ, which consulted City Hall for its findings.

So what's boosting JC now? They say the city's convenient transit options and Millenial-friendly environment are key factors.

While Downtown has long been a focus of revitalization and development, Journal Square is only recently finally seeing results from developers' plans formed long ago. Last month, JSQ got its first high-end residential building, Kennedy Lofts, ironically where the former Hudson County welfare office was located on Newkirk.

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those white collar professionals paying 3k-5k rents ARE the struggling middle-classes.....

CdeCoincy - The question as to why developers don't build is a complicated one. It has little to do with demand (there is clearly demand for condos in dtjc - I couldn't say how many, but based on my recent condo purchase experience and following the market for the past two years, I would say the city could support at least one new condo building and probably several). I think as all of these of people moving into the new rental buildings fall in love with the city (hopefully) and want to avoid / postpone moving to the suburbs as they get older and have families, the demand will exponentially increase give the huge numbers of new higher end stock under construction or recently completed.

As a developer, it is far more risky to build condos than rentals. You need to put together the deal based on today?s market assumptions knowing that you will not actually be selling the condos for another 12-18 months and then closing on the condos another 12-18 months after that. A lot can happen over that time frame that could put the developer in a difficult situation (or get completely wiped out) and lenders typically prefer financing a rental building as there is far less risk for the deal to blow up. Even if the market worsens substantially and the lenders need to take back a rental building, they can operate it themselves for a few years and then sell the building when the market begins to recover. Compare that to a busted condo deal and the lenders may be stuck with a vacant / half completed condo building that is making no money and needs substantial capital invested in order to complete

If everything comes together and the Developer can make a huge profit from the condo sales, but then any future appreciation in the condo real estate would accrue to the buyers of the condos rather than the developer. Typically, condos are either built by up and coming developers who don?t have a huge net-worth or large publicly traded builders who are in business to do as many projects as possible. They need to monetize their investment in order to do their next project. Compare this to large privately owned real estate companies (Kushner for example) that have relatively large amounts of net-worth and don?t need to the immediate cash from selling a condo. They would prefer to own a rental building long-term (perhaps indefinitely) and benefit from the long-term real estate appreciation and tax benefits of owning real estate.

That is a relatively simple explanation of why almost all of the new buildings in JC have been rental instead of condos. There are a lot of nuances and situations that could differ from what I outlined above. At a certain point, the value proposition of new condos will be so great that you will see a shift to condos. Unfortunately, this will likely lead to a situation where there are too many condo projects in the works for the market to absorb, but that is unfortunately how these things tend to go.

On another note, here is another take on the real estate market - this article was posted in the WSJ Today:


http://online.wsj.com/articles/jersey ... g-boom-expands-1411354679

Jersey City's Housing Boom Expands
New Residential Construction Has Spread to Downtown and Journal Square

By ROLAND LI
Sept. 21, 2014 10:57 p.m. ET

Kenneth Pasternak stands on the roof of the old Jersey Journal headquarters building that he plans to redevelop with Kushner Cos. Peter Grant/The Wall Street Journal
Jersey City's residential construction boom is spreading beyond its waterfront area to neighborhoods farther inland where planners and developers have long dreamed about building with little to show for it until now.

In August, for example, Kushner Real Estate Group and National Realty Advisors broke ground on the first of three planned towers at a giant development in Journal Square, known as Journal Squared, which will have a total of 1,840 units and 36,000 square feet of retail. Builders are currently excavating and underpinning the project's foundation.

"We really believe in the market," said Jonathan Kushner, president of Kushner Real Estate Group, citing Jersey City's transit options and growing night life.

Also in the Journal Square area, renters will soon start moving into Kennedy Lofts, a converted office building. There is already a waiting list forming for the units?which run from $1,500 a month for a studio to $2,100 for a two-bedroom, says Heriberto Camacho, with Keller Williams City Life Realty.

Other Journal Square projects are close to moving forward. A venture of developer Kenneth Pasternak and Kushner Cos.?a different branch of the Kushner family?are planning to convert the building that used to house the Jersey Journal, into a mixed-use project including rental apartments.

That same group also is purchasing a huge site across the street from the Journal building. It is approved for a tower that could soar 60 stories.


"We see some of the same dynamics of Brooklyn here at half the price point," said Mr. Pasternak, whose real-estate company is named KABR Group.

Overall, Jersey City is seeing a record level of new apartments being built. There are 5,609 units this year under construction in the Journal Square and downtown areas compared with 3,009 last year and 5,122 in 2008, which had been the peak year until now, according to statistics provided by the mayor's office.

Jersey City is being bolstered by its proximity and convenient transit options into Manhattan, including the ferry and PATH train. Also, like many other urban areas throughout the country, Jersey City is attracting young people as more rural parts of the state have shed jobs and lost population, said James Hughes, dean of the Edward J. Bloustein School of Planning and Public Policy at Rutgers University.

"Millennials don't want to work in suburban office campuses," said Mr. Hughes. "They want edgier environments."

Until recently, the Jersey City waterfront area, and its downtown just to the west, was the prime beneficiary of the Manhattan spillover effect. Developers have built thousands of apartments and millions of square feet of office space to house Wall Street titans like Goldman Sachs Group Inc. and J.P. Morgan Chase & Co.


Cousins Anthony Carrino and John Colaneri at the Telco building, which their family is redeveloping. Peter Grant/The Wall Street Journal
New towers are being built near the waterfront by developers including the Kushner-Pasternak group and a venture of Ironstate Development Co., and Mack-Cali Realty Corp. CLI -0.61% Numerous new restaurants and bars are popping up in the downtown area including Barcade, an offshoot of the Brooklyn pub, and Thirty Acres, run by a former chef of popular noodle restaurant Momofuku.

"Even 12 months ago, you didn't see the activity in the street that you do now," says Anthony Carrino, whose family is converting the Telco building into 16 loft apartments and two restaurants featuring chef Dale Talde.

But in this boom, development also is spreading inland to neighborhoods that used to be associated more with urban problems than upscale eateries.

One reason for this is that Jersey City Mayor Steven Fulop, who assumed office last year, has made it a priority to attract more development in areas outside the waterfront. He overhauled the city's tax-abatement program by creating a tier system that restricts the length of tax abatements to a maximum of five years for waterfront developments.

More-inland Jersey City neighborhoods can have tax abatements lasting up to 20 years, while new properties in the Journal Square area can have abatements lasting up to 30 years. "We've been proactive in encouraging people to invest in other parts of the city," Mr. Fulop said.

Jersey City neighborhoods that are further inland also are benefiting from an expanding arts scene. Earlier this year, city officials said that AEG Live, a company that books talent, will manage the Loew's Jersey Theatre overlooking Journal Square and that $30 million to $40 million would be spent to overhaul the aging venue.

Mana Contemporary, in converted factory and warehouse space that is off-the-beaten path in Jersey City, also has created a buzz in the arts world. It is a 2-million-square-foot complex of artists, studios, galleries and exhibition space that was developed by Moishe Mana, who is best known for his moving and storage businesses.

In August, Jersey City developer the Shuster Group opened leasing at the Art House, a 119-unit building with paintings for sale displayed throughout the hallways, in the historic Powerhouse Arts district. The building is close to 50% leased, with rents starting at $1,995 a month for a studio.

"There's a lot of forces bringing new population into the area," says Eyal Shuster, founder of the Shuster Group.

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Are condos not being built because of perceived lack of demand or reluctance on the part of banks to finance them? From my own perspective, rowhouses are the most desirable housing in dtjc, but some of us who bought in the 70s and 80s find ourselves with too many stairs, facing a second renovation (central a/c would be nice) and maybe wanting to packup for a few months during the winter. A full service condo, maybe even one geared to empty nesters, might find a ready market in DTJC.

And if you are wondering why I want to stay here:
https://www.youtube.com/watch?v=50zL8TnMBN8

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It can't go up forever, though. Manic thinking will get you burned.

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Wish this was true but it is not as there are still many undesirable businesses (dollar stores, nick nack stores) and people (longtime homeless paco and taco cone to mind). The middle class is not struggling in dtjc, heck, i wish there were more middle class in dtjc and less customers of those cheapo stores then maybe dtjc would be a viable option outside of hoboken in nj.

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I think what the article is basically saying is that construction is relying on rents continuing to move upwards rapidly, whereas we're probably headed towards a period where rents don't rise much if at all for a few years as all of the new towers are absorbed into the market. "Cooling off" in this sense doesn't mean that rents will drop, only that the massive increases we've seen recently will slow down a bit. That's probably a fair assessment, but I think there's plenty of room for developers to make money even if rents are flat for a few years--provided they already own the land they're building on rather than having to buy land at current land prices.

Jersey City could also use a new condo building. There's a lot of pent-up demand for new condos and no serious supply. Just one large condo building could do extremely well if it opened in, say, 2017. Not sure the market could support more than two or so, though.

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The reality of gentrification and attracting white collar professionals; everything becomes more expensive to price out 'undesirables' ... which appears to include the struggling middle-classes.

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This. Exactly. Housing in DTJC is insane. York at Warren was almost fully leased in a month. The Art House is selling like crazy and will be fully leased in what is essentially a month. And, these places are NOT cheap. Rents in DTJC for new construction are surpassing four and five thousands dollars. It is really crazy.

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From my understanding many apartments in Paulus Hook have an agreement with many financial, insurance and IT institutions in downtown Manhattan - I recall AIG has heaps of expats located in Paulus Hook with exclusive deals... Many of Newport apartments also have that connection.

As much as I want this to be true it just isn't going to happen in Paulus Hook. Buildings here are at 99% occupancy. It's crazy!

"Any market that gets super hot eventually has got to cool off," said William Procida, founder and president of Procida Funding & Advisors LLC in Englewood Cliffs. "Construction costs being what they are now make it very difficult to make a multifamily ground-up construction even work anymore, and rents aren't spiking with them."

On the Hudson River's Gold Coast, which spans Jersey City to Fort Lee, 16,540 residential units are either under construction, proposed or in the planning stages, according to Cushman & Wakefield of New Jersey Inc. There are about 6,000 residential units set for Bergen County, according to Cushman's data.

Some real estate officials are predicting the Jersey City submarket is heading toward a housing glut, with supply overtaking demand for apartments. Others are upbeat on Jersey City, but bearish on multifamily dwellings planned for suburban towns, away from the Hudson, in Bergen.

- See more at: http://www.northjersey.com/news/busin ... 2825#sthash.OBUi28pj.dpuf