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The only solution to high prices is, and with apologies to Sarah Palin, "Build, baby, Build!"

What we should want to be is an alternative to ridiculous rental prices in Manhattan and Brooklyn.. not hell bent on matching them.

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What's so hard to understand about *average*? The article plainly lays out its data and claims: despite areas that are definitely BELOW that threshold, the areas that command prices above that level do so at a very high level.

The two examples they used (The Art House JC and Warren at York) are very much on point, both asking (and getting) rents in the $4/sf range. Just because you can find a rental somewhere in JC for $2 per sq. ft., it does not negate that, when taken as a whole, Hudson County real estate is super hot right now. I totally believe what the article is saying because what they claim is exactly what I experienced over the past year while shopping for a new place. Every new building that has come onto the market over the past year, and those coming online in the next year or two, will all command these rents.

You mean that $3000 is the average asking rent? I still don't believe it, there are large swaths of Hudson that are not Hoboken or Downtown JC.

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Did you read as far as the 3rd line of the article?

I presume this is for downtown properties only. Anyone know about the costs for condos and rentals at the Beacon?

http://www.njbiz.com/article/20150316 ... 69993/The-$3000-apartment

By Joshua Burd, March 16, 2015 at 10:45 AM

You don't need to be a real estate expert to know that multifamily on the Gold Coast is white hot.

And you might not bat an eye at the thought of a unit renting for $3,000 a month.

But when that's the average asking rent for all of Hudson County ? the county that makes up a major chunk of this booming market ? it might be time to go back and take another look.

With the county projected to reach that benchmark next year, experts say it's just another resounding sign of just how hot the Gold Coast is. And that's an average that includes less-expensive parts of the county, meaning rents along the waterfront are even higher ? bringing the number up to the $3,000 mark.

It's why insiders see no signs of a slowdown in the near future when it comes to competition among developers and investors seeking to cash in on the market or plant their flag there.

?I don't see anything that's going to derail it at this point,? said Jose Cruz, a senior managing director at the brokerage firm HFF, who notes that there are ?plenty (of buildings) where it's pushing $4 (per square foot),? which translates to $4,000 for a 1,000-square-foot apartment.

?It has a positive effect all the way around,? said Cruz, who is based in HFF's Florham Park office.

Average asking rents for Hudson County have grown every year since 2009 ? when they were just above $2,500 ? and are projected to top $3,000 in 2016, according to the New York-based research firm Reis Inc. And the firm projects that trend to continue through 2019, with average annual growth of about 2.4 percent during that period.

Those projections may be tempered by an influx of new options ? HFF tracks a pipeline of more than 10,500 new units through 2018, from Jersey City to Fort Lee in Bergen County ? but experts say demand from renters is almost eye-popping. Look no further than The Art House in Jersey City, a 119-unit property that was delivered last year by The Shuster Group and leased nearly 100 of its 119 units in three months.

Or the 11-story Warren at York, developed by Millennium Homes, which was 50 percent leased within a week of opening.

That pace is enough to catch the eye of developers and investors when they're gauging a market, said George Vallone, president of Hoboken Brownstone Co. After all it's one of the ?three key metrics? they look for when it comes to multifamily development.

?The first is, 'What's it going to cost you?' The second is 'What are you going to rent it for?' or 'What are you going to sell it for?'? said Vallone, the incoming president of the New Jersey Builders Association. ?And the third ? equally important ? is 'How fast is the market going to absorb it?'

?And the absorption rate on rental product in Jersey City has been nothing less than spectacular.?

All this adds up to a market that is only becoming more attractive to developers and investors ? one where development sites are increasingly scarce, experts say. That has forced real estate firms to both be creative with finding property and explore other neighborhoods away from the waterfront.

That's especially true in places such as Hoboken, said David Gaber, principal and chief financial officer of Bijou Properties. The firm in 2013 opened a 35-unit, six-story building known as Edge Lofts in the northwestern edge of the Mile Square City ? the neighborhood's first new residential building in recent years ? and leased up the property in about four months.

Bijou is now constructing two other buildings in Hoboken, a 135-unit project on the city's western edge known as 900 Monroe and a 212-unit, 12-story tower toward the northern end known as Park + Garden. But finding additional sites is not quite so simple.

?We're always looking and we have a few other development sites where we're in the entitlement process,? said Gaber, whose firm is based in the city. ?It's very competitive. When there is a development site that comes up in Hoboken, everybody's looking at it, everybody's bidding on it ? so the price has gone up substantially just over the last year or two.?

The competition is being felt up and down the Gold Coast, experts say, and it's becoming especially heated as well-heeled institutions increasingly look to break into the market. That's one driver for another budding trend by investors: acquiring older properties and renovating them to add value.

Cruz pointed to two recent examples from last year: JP Morgan Chase's acquisition of the 240-unit Curling Club Apartments in Hoboken and Pantzer Properties' purchase of the 351-unit Crest at Fort Lee. The deals, which both topped $120 million, were made by buyers who plan to make modest upgrades to interior units and common areas in order to achieve higher rents.

?This is the hybrid between the stable deal and the new construction,? said Cruz, who brokered both deals.

The challenge with such ?value-add? opportunities is simply finding them, he said. But he noted they could still become a growing option simply because, on the Gold Coast, buildings could be ripe for repositioning much sooner than in other markets.

?I think today that demanding renter on the waterfront wants a very nice apartment,? he said. ?And to the extent that the apartments are five, seven, 10 years old, the renter that's willing to pay more for location wants a very nice place. ? They'll pay more to have a renovated unit.?

E-mail to: joshb@njbiz.com