New Jersey’s Real Estate & Business Executives Outlook | The Stoler Report

New Jersey’s Real Estate & Business Executives Outlook | The Stoler Report


♪ [THEME MUSIC] ♪>>IT IS CALLED THE GARDEN STATE. I DON’T KNOW WHY IT IS CALLED THE GARDEN STATE BECAUSE THERE IS STILL SOME FARMING AND OTHER PRODUCTS, BUT LOTS OF THINGS ARE HAPPENING. ALL DIFFERENT TYPES OF DEVELOPMENT ARE TAKING PLACE. DUE TO THE HELP OF MY EXECUTIVE PRODUCER, KEVIN CUMMINGS WHO IS THE CHAIRMAN AND CEO OF INVESTORS BANK, WE ARE PRESENTING A GROUP OF INDIVIDUALS TO TALK ABOUT WHAT IS HAPPENING AND THE OUTLOOK FOR THE REAL ESTATE MARKET IN THE GARDEN STATE OF NEW JERSEY. AS I SAID, MY GUESTS INCLUDE KEVIN CUMMINGS, THE CHAIRMAN AND CEO OF INVESTORS BANK, STANLEY KOREYVA, WHO IS THE PRESIDENT AND CEO OF P.R.C. GROUP, CAREY TAJFEL, WHO IS THE PRESIDENT AND CEO OF HOTELS UNLIMITED AND TFE PROPERTIES. AND LAST BUT NOT LEAST, JEFF BASTOW WHO IS A PARTNER AT CLAREMONT DEVELOPMENT. BANKER, SINCE YOU ARE THE GUY WHO LENDS MONEY TO THESE PEOPLE, HOW DO YOU SEE THE MARKET IN NEW JERSEY?>>WE SEE THE MARKET PRETTY STRONG IN NEW JERSEY. ESPECIALLY NORTH JERSEY. SOUTH JERSEY, PHILADELPHIA DOES NOT DO WHAT NEW YORK CITY DOES FOR NORTH JERSEY. WE THINK THE TRANSIT CENTERS ARE STRONG. JERSEY CITY, HUDSON COUNTY IS VERY STRONG. JUST LAST NIGHT I WAS AT A FUNCTION WITH — IN NEWARK — HONORING OUR MAYOR, AND NEWARK IS COMING BACK STRONG.>>A LOT OF THINGS ARE HAPPENING IN NEWARK, THE WALKER TOWERS, HAHNE’S DEPARTMENT STORE. THERE HAS BEEN A RESURGENCE IN NEWARK. LET’S TALK ABOUT AREAS NEAR NEWARK, YOU ARE DEVELOPING IN NEWARK, RIGHT?>>WE ARE BUILDING SOME INDUSTRIAL DOWN BY THE PORT. OFFICE BUILDING THAT IS PURPOSE BUILT FOR A SINGLE TENANT USER. WE HAVE STUDENT HOUSING, OTHER SIMILAR SITES THAT ARE ALL AROUND DOWNTOWN NEWARK. WE THINK IT IS GREAT. THERE IS A LOT OF POSITIVE ENERGY THERE. WE LOOK FORWARD TO GETTING THESE THINGS OUT OF THE GROUND.>>WE ARE MORE CORE CENTRAL NEW JERSEY, MOSTLY IN MONMOUTH, MIDDLESEX, OCEAN AND MERCER COUNTIES WITH SOME EXCEPTIONS. WE ARE FINDING THE MARKETS TO BE VERY STRONG AND CONSISTENT.>>YOU HAVE EIGHT HOTELS?>>WE HAVE 11 HOTELS IN THOSE FOUR COUNTIES.>>LET’S TALK ABOUT THE HOSPITALITY MARKET. ARE YOU GEARING TOWARD THE TRAVELER, OR THE BUSINESSPERSON, OR THE CORPORATE EXECUTIVE?>>I WOULD SAY WE CROSS OVER AND COVER ALL FACETS OF TRAVELERS. SOME OF OUR HOTELS MAY BE MORE TO ONE SECTOR THAN THE OTHERS, SOME ARE CLOSER TO THE JERSEY SHORE THAN OTHERS. DEPENDING ON WHICH SPECIFIC PROPERTY WOULD PERHAPS YIELD A BIT MORE OF ONE OR THE OTHER, BUT NO ONE HOTEL IS RELIANT ON ANY ONE SECTOR.>>ONE AREA — BECAUSE OF THE E-COMMERCE WORLD IS THE LOGISTICS AND THE INDUSTRIAL. HOW ARE YOU LOOKING AT THAT MARKET TODAY?>>UP AND DOWN THE TURNPIKE, LOGISTICS ARE VERY HOT. THE RENTS HAVE GONE UP SIGNIFICANTLY AND THERE IS NOT ENOUGH SUPPLY TO MEET THE DEMAND.>>ANYONE SITTING HERE BUILDING ANY NEW INDUSTRIAL?>>YEAH BY THE PORT, AND ANOTHER ONE IN MIDDLESEX COUNTY. I FEEL LIKE EVERY TIME I CALL THE LEASING BROKER THE RENT HAS GONE UP 25 OR 50 CENTS TO — WE ARE STARTING TWO PROJECTS NEXT YEAR. 750,000 SQUARE FEET, IT IS A GREAT MARKET I WISH I HAD MORE OF THEM.>>THERE’S A PERCEPTION THAT RETAIL IS DEAD. YOU WERE TALKING TO ME BEFORE THAT ONE OF YOUR DEVELOPMENTS — YOU ARE TAKING OVER A FORMER KMART. HOW DO YOU LOOK AT RETAIL IN THE GARDEN STATE?>>I WOULD SAY YOU HAVE TO BE CREATIVE AND NOT RELY NECESSARILY ON TRADITIONAL PAST RETAIL USERS, BUT BE CREATIVE. A LOT OF CENTERS ARE PUTTING IN GYMS. THERE IS A LOT OF GYMS GOING INTO CENTERS THAT WERE FORMER SUPERMARKETS OR OTHER LARGE SPACES. A LOT OF MOVEMENT TOWARD CHILDREN ACTIVITY CENTERS. WE GENERALLY DEAL WITH A CHILDREN ACTIVITY CENTER THAT IS GOING TO TAKE 32,000 SQUARE FEET. ROCKCLIMBING, BOWLING, A MIX OF THAT. IN THE SAME TOWN THERE IS A FEW OTHERS COMING IN, HOPEFULLY THERE’LL BE ENOUGH ROOM FOR EVERYBODY.>>A NUMBER OF PEOPLE ARE SEEING NEW ENTRANTS IN THE RETAIL. HOBBY LOBBY HAS COME IN FROM THE MIDWEST. ONE OF THE BIG AREAS WE TALKED ABOUT BEFORE IS THE AMERICAN DREAM WHICH IS DEVELOPMENT TAKING PLACE IN BERGEN COUNTY, IN THE MEADOWLANDS WHICH HAS PROBABLY BEEN ON THE BOOKS FOR APPROXIMATELY 20 YEARS. HOW DO YOU LOOK AT THAT OVER THERE? I KNOW YOU ARE NOT A — BANK — SPECIFICALLY INVOLVED IN THE DEVELOPMENT, BUT IT TOOK A LONG TIME TO GET FINANCING.>>THERE HAS BEEN A COUPLE OF WRITE-OFFS FOR BANKS INVOLVED IN THAT PROJECT. IT HAS BEEN — FITS, STOPS AND STARTS. I THINK THEY ARE EXPECTED TO OPEN IN THE LATE FALL. IT IS GOING TO BE SIMILAR TO WHAT CAREY JUST SAID, YOU HAVE TO BE CREATIVE. I THINK THE NUMBERS NOW ARE 60% RECREATIONAL. A LOT OF RESTAURANTS. AND THEN CORE RETAIL. I THINK A VERY COMPETENT GROUP OF INVESTORS AND OPERATORS, THEY HAVE THE BIG PROJECT, THE MALL OF AMERICA IN MINNEAPOLIS. AND ONE SIMILAR PROJECT IN CANADA. THE PROBLEM IS THE TRAFFIC. SUNDAY FOOTBALL, THE SUNDAY — RULES IN BERGEN COUNTY. I LOOK AT IT — WILL THE PEOPLE IN MANHATTAN WANT TO COME OVER TO NEW JERSEY TO SEE THIS? AND HOW OFTEN? IF I AM AN EXECUTIVE FROM FRANKFURT, AND I AM VISITING MANHATTAN ON BUSINESS TRIP, WITH MY FAMILY, IS THERE TOO MUCH TO DO IN NEW YORK PROPER? WILL I TAKE THE TRAIN AND GO TO EAST RUTHERFORD, NEW JERSEY?>>WITH REGARD TO THAT, SINCE YOU ARE THE OFFICIAL TEAM IN NEW JERSEY, ARE A LOT OF PEOPLE TAKING THE TRAIN FROM YORK CITY TO GO OUT TO NEW JERSEY FOR THE FOOTBALL GAMES?>>YES. WHEN YOU SEE THAT TRAIN COMING IN FROM — I GUESS HOBOKEN, IT IS FULL AND PEOPLE ARE USING IT.>>WHAT ARE YOU DOING THESE DAYS IN NEW JERSEY?>>RIGHT NOW WE ARE A CENTRAL NEW JERSEY PROPERTY MANAGEMENT, WE HAVE 2100 APARTMENTS. WE ARE EXPANDING IN NORTH JERSEY. WE HAVE A DEVELOPMENT ON THE WEST SIDE, NEAR NEW JERSEY CITY UNIVERSITY, WE ARE BUILDING 144 APARTMENTS THAT ARE OPENING UP IN OCTOBER, ALONG WITH CLAREMONT, ANOTHER BUILDING NEXT DOOR ANOTHER 198 UNITS WE ARE STARTING. WE ARE ALSO STARTING IN BAYONNE, 162 APARTMENTS ACROSS THE RAIL LINE. I THINK THAT IS A GREAT MARKET THAT IS STILL BEING TAPPED. THEY ARE VERY WELCOMING IN BAYONNE AND THIS WILL BE A GREAT PROJECT FOR US. WE ARE ALSO IN NEWARK, WE ARE WORKING WITH DR. JOEL BLOOM OF NJIT IN AN OPPORTUNITY ZONE, TO PUT ANOTHER 99 APARTMENTS ON –>>I AM HAPPY YOU BROUGHT UP THE TERM OPPORTUNITY ZONE. FEW PEOPLE UNDERSTAND WHAT TO DO WITH THE OPPORTUNITY ZONES. IT IS A TOPIC OF DISCUSSION, BUT MY PROBLEM IS SINCE I AM OLDER AND I REMEMBER THE — THAT THEY ARE GOING TO BE GOOD BAD AND INDIFFERENT WITH REGARD TO OPPORTUNITY ZONES. TALK TO ME ABOUT YOUR INVOLVEMENT IN OPPORTUNITY ZONE DEVELOPMENT.>>THIS HAPPENED TO BE PERFECT TIMING AS THE OPPORTUNITY ZONE LEGISLATION CAME OUT. ONE OF THE BUILDINGS IN THE WHOLE AREA NEAR NJIT, IS WHERE WE ARE LOOKING AT THE OPPORTUNITY ZONE. WE GET CALLS DAILY ABOUT, WE WANT PRIVATE INVESTMENT IN THAT. WE ARE NOT EVEN AT THAT POINT YET, BUT WE ARE GETTING CALLS KNOWING THAT’S WHERE IT IS THAT WE WANT TO BE YOUR INVESTOR.>>IT IS A DEFERRAL — TAX DEFERRAL UP TO SEVEN YEARS. HOW DO YOU AS A BANK LOOK AT OPPORTUNITY ZONES?>>I WAS TALKING TO ONE MAJOR DEVELOPER IN NEW JERSEY AND HE CALLED AT TAX LAW CHANGE THE BIGGEST OPPORTUNITY SINCE THE REAGAN TAX LAW CHANGE IN THE 80s WHEN THEY ACCELERATED DEPRECIATION. THE REGULATIONS ARE NOT OUT YET.>>THEY ARE OUT, BUT THEY HAVE CHANGED EVERY COUPLE OF MONTHS.>>I THINK IT IS GOING TO CREATE A LOT OF OPPORTUNITIES — A LOT OF OPPORTUNITIES IN THESE OPPORTUNITY ZONES. I THINK IT IS GOOD FOR REDEVELOPMENT. LONGER-TERM INVESTOR –>>THAT’S THE QUESTION, THAT THE INVESTOR HAS TO STAY THERE FOR A LONGER TERM. IT IS EASY TO SAY I WANT TO DEFER MY TAXES, BUT I MAY WANT SOME CASH FLOW, THE FINAL RECENT REGULATION SAID YOU CAN’T GET CASH FLOW FROM REFINANCINGS. WITH REGARD TO THAT, HOW ARE THE LENDERS BESIDE MY FRIEND MR. CUMMINGS, OFFERING FINANCING IN THE GARDEN STATE? DO YOU SEE AVAILABILITY?>>YEAH. WE JUST CLOSED AN OPPORTUNITY ZONE DEAL LAST MONDAY. 220 APARTMENTS IN ENGLEWOOD. IT WORKED VERY TRADITIONAL. LIKE EVERYONE ELSE, DEVELOPERS NEW JERSEY –>>WHERE DO YOU GET INVESTORS FROM?>>A FAMILY OFFICE.>>THEY ARE TAKING THEIR CAPITAL GAINS THAT THEY TOOK SOMEWHERE ELSE AND PLOWING IT OVER THERE?>>IT’S A BIG PROJECT. IT TOOK ABOUT $20 MILLION IN GAINS. OBVIOUSLY WE INVESTED, WE ARE CLOSING A LOAN TOMORROW.>>IT IS NOT LIKE THE 1031 WHERE IT HAS TO BE REAL ESTATE REAL ESTATE, YOU CAN — TECH COMPANY HAVE A HUGE GAIN AND YOU CAN PLOW IT BACK INTO OPPORTUNITY ZONES.>>THIS MONEY WAS SUPPOSED TO BE USED FOR SMALL BUSINESSES TO CAPITALIZE AND OPERATE NEW BUSINESSES. THAT IS WHAT IT IS. IT WAS AN ADJUNCT THAT THE WORD CHANGED IN REGARD TO REAL ESTATE BECAUSE PEOPLE DID NOT REALIZE — THE RULES WERE OUT 9 OR 10 MONTHS AND PEOPLE SAID THERE IS OTHER OPPORTUNITIES, DIFFERENT APPROACHES AVAILABLE.>>I THINK THE IDEA WAS TO CREATE JOBS. YOU HAVE TO CREATE SOME CONSTRUCTION JOBS, PUT PEOPLE BACK TO WORK.>>ONE AREA THAT PEOPLE TALK ABOUT IS THE JERSEY SHORE. HOW DO YOU SEE THE OPPORTUNITIES TAKING PLACE IN THE JERSEY SHORE, DIFFERENT TYPE OF ASSET CLASSES WITH REGARD TO THE OFFICE MARKET, TO THE RESIDENTIAL MARKET, TO THE HOSPITALITY MARKET?>>FROM A HOSPITALITY STANDPOINT IT IS STRONG. LONG BRANCH WHICH IS ONE OF THE TOWNS BY THE JERSEY SHORE HAS HAD CONTINUED DEVELOPMENT BY PIER VILLAGE. NEW PHASE’S BEING WORKED ON. THERE’S A NEW HOTEL THAT OPENED MEMORIAL WEEKEND. IT IS 64-67 ROOMS WITH VERY HIGH PRICES. FROM $540 PER NIGHT. WE HAVE A SHERATON HOTEL THAT IS NOT ON THE BEACH, BUT WE ARE EXCITED TO HAVE HOTELS THAT START AT RATES AT 540 BECAUSE THAT DRIVES UP RATES OF HOTELS FIVE MILES AWAY.>>ASBURY PARK, THE NEW HOTEL IS OPENING UP NEXT WEEK.>>THE HOTEL PART IS OPENING UP, A THINK THE CONDOMINIUM PORTION OF IT IS GOING TO OPEN ONE MONTH LATER.>>BUT THE RESIDENTIAL IS ALSO STRONG. THERE IS MAJOR RESIDENTIAL RIGHT NOW IN ASBURY, AND IN LONGBRANCH WE ARE BUILDING 26 LUXURY TOWNHOMES FOR ANOTHER ONE OF OUR CLIENTS RIGHT ON THE SHORELINE NEAR PRESIDENTS PARK. THESE ARE TOWNHOMES THAT ARE GOING TO LOOK PLUS OR MINUS IN THE $2 MILLION RANGE.>>SPORTS BETTING IS DOING WELL AT THE MEADOWLANDS. HAS THAT HELPED SPUR DEVELOPMENT IN MONMOUTH AND OCEAN COUNTIES?>>I WOULD SAY, EVEN ON THE HOTEL SIDE I THINK IT IS MORE LOCAL PEOPLE ARE GOING TO GAMBLE THERE. IT IS CERTAINLY HELPING AREA BUSINESSES BECAUSE PEOPLE ARE COMING THERE FOR SPORTS BETTING, STOPPING FOR COFFEE, STOPPING AT RESTAURANTS. I THINK IT IS HELPING THE AREA, BUT NOT NECESSARILY ACROSS ALL BUSINESS TYPES.>>WHAT ABOUT THE DEVELOPMENTS NEAR FORT MONMOUTH?>>I WAS TALKING TO A CUSTOMER YESTERDAY AND HE JUST GOT AWARDED A GOLF COURSE IN FORT MONMOUTH. THE OFFICE OF HOUSING — NEAR HOLES 9 AND 11, HE IS GOING TO LEVEL THE OFFICE OF HOUSING AND PUT UP 60 TOWNHOMES. THAT IS DEVELOPING. THERE IS A NEW SCHOOL DOWN THERE, THAT TOOK A PIECE OF THAT PROPERTY — THE OLD FORT MONMOUTH PROPERTY. THERE’S A TECH COMPANY THAT BUILT ON THERE. THEY ARE DEVELOPING THAT IN PIECES, YOU ARE PROBABLY MORE FAMILIAR WITH IT.>>WE ARE HAVING RIGHT NOW WHAT IS KNOWN AS SQUIRES HALL. WHAT WE CALL THE SOUTHERN CAMPUS THAT IS NOW LOCATED AT BROOKDALE. A YEAR FROM NOW, SEPTEMBER FOLLOWING YEAR THEY ARE OPENING UP THEIR EASTERN CAMPUS. WE ARE RENOVATING THAT AS WE SPEAK.>>JERSEY WAS ALSO KNOWN FOR PHARMA. WHAT IS HAPPENING WITH THE PHARMA BUSINESS THERE?>>– WAS ACQUIRED BY BRISTOL-MYERS I BELIEVE. THERE HAS BEEN CONSOLIDATION. WE HAVE A RELATIVELY NEW GOVERNOR. HE IS COMMITTED TO TRY TO BRING BACK THE BIOTECH. IF YOU LOOK AT THE HISTORY OF NEW JERSEY, YOU LOOK AT BELL LABS, THE BIOTECH WE HAD IN THE — ADMINISTRATION, WE HAVE LOST THAT OVER THE YEARS BECAUSE OF THE HIGH COST OF LIVING AND MOVING UP TO MASSACHUSETTS, AND CALIFORNIA. SOME OF THAT SMART DEVELOP AND — NEW JERSEY BECAUSE OF ITS LOCATION IS A TRANSPORTATION HUB. A NUMBER OF ENGINEERS, SCIENTISTS PER SQUARE MILE IN NEW JERSEY IS PROBABLY BETTER THAN ANYWHERE IN THE WORLD. THE EDUCATIONAL SYSTEM WE HAVE — WE ARE TRYING TO BRING BACK THAT BIOTECHNOLOGY, PHARMA, BACK TO THE GARDEN STATE.>>WITH REGARD TO HEALTH CARE. THE BARNABAS SYSTEM IS HUGE, THERE ARE OTHER DEVELOPMENTS AS WELL. SUMMIT MEDICAL GROUP HAD A RESURGENCE. ARE YOU SEEING THAT SIGNIFICANTLY CHANGING IN HEALTH CARE?>>HEALTH CARE IS ONE OF THE AREAS WE ARE FOCUSED ON. WE ARE HIRING HEALTH CARE PROFESSIONALS. WE SEE THAT AS AN OPPORTUNITY. WE HAVE THE AGING POPULATION, WE HAVE ASSISTED LIVING AND NURSING HOMES IS A NICE AREA OF BUSINESS WITH THE RIGHT OPERATORS. I THINK YOU ARE CERTAINLY GOING TO SEE — HEALTH CARE SUMMIT MEDICAL I THINK IT’S GOING TO BE INVOLVED IN A TRANSACTION WITH VENTURE CAPITAL MONEY. THEY HAVE GROWN –>>YOU BRING UP AN INTERESTING POINT. THE AGING POPULATION IN THE REGION, SENIOR HOUSING, ARE ANY OF YOU INVOLVED WITH BUILDING ANY SENIOR HOUSING? WHICH IS NOT ASSISTED LIVING, I MEAN SENIOR HOUSING.>>WE HAVE A PROJECT WE HAVE APPROVED FOR SENIOR HOUSING, BUT IT IS SINGLE HOMES, NOT A RENTAL PROJECT.>>THAT’S WHAT I HAVE SEEN. SENIOR HOUSING IS BEING COVERED BY THE PUBLIC. PRIVATE DEVELOPERS LIKE US GET THE APPROVALS AND CAN MOVE ON. THERE’S STILL A NEED FOR SENIOR HOUSING. THAT WAS RICH IN 2005-2008, IT DIED WITH THE DOWNTURN. THERE IS A TREMENDOUS AMOUNT OF BABY BOOMERS EVERY DAY LOOKING TO CHANGE OVER FROM SINGLE-FAMILY HOMES TO SENIOR HOUSING.>>ONE OF THE BIGGEST PROBLEMS IS AFFORDABLE HOUSING. HOW IS NEW JERSEY HANDLING THIS AFFORDABLE HOUSING?>>EACH TOWN HAS THEIR REQUIREMENTS. OVERALL, FAIR SHARE IS TAKING CONTROL AND THE COURTS ARE TAKING CONTROL, THE SETTLEMENTS THAT ARE HAPPENING AS WE SPEAK. I AM LOOKING AT A SETTLEMENT RIGHT NOW THAT HAS TO BE DONE BY THIS MONTH. THEY ARE SAYING IT NEEDS TO BE INCLUSIONARY. NO MORE JUST PAYMENT IN LIEU OF CO-HOUSING. MOST OF IT IS THE 8020 RULE, 20% ARE AFFORDABLE.>>ON-SITE?>>10% HAS TO BE ON-SITE, AND 10% CAN BE OFF-SITE, BUT THERE IS NO MORE JUST PAYMENT. IT IS THE RIGHT ANSWER, THERE SHOULD BE INCLUSIONARY HOUSING WITH THESE PROJECTS. THAT IS WHAT WE ARE SEEING AS WE LOOK AT PROJECTS THROUGHOUT THE STATE.>>ONE OF THE AREAS THAT WAS HURT 10 YEARS AGO WITH THE RECESSION WAS THE OFFICE MARKET. HAS THAT IMPROVED? OR, ARE THERE DEVELOPERS MAKING CHANGES AND CONVERTING THESE BUILDINGS RATHER THAN KNOCKING THEM DOWN, BUILDING RESIDENTIAL OR MIXED-USE?>>THERE’S A COUPLE OFFICE MARKETS THAT ARE FANTASTIC, JERSEY CITY, SUMMIT, MORRISTOWN. OUTSIDE OF THAT, WE ARE TEARING DOWN A JUST UNDER 300,000 SQUARE-FOOT OFFICE BUILDING IN PARSIPPANY AND BUILDING A TOWN CENTER. 470 APARTMENTS, 100,000 FEET OF RETAIL. WE ARE RE-ABSORBING SPACE THAT IS FUNCTIONALLY AND PHYSICALLY OBSOLETE AND REPURPOSING IT INTO –>>I THINK IT DEPENDS ON MARKETS WITHIN NEW JERSEY. THERE ARE TOWNS — IT DEPENDS ON THE VACANCY RATE. IF IT IS OVERBUILT, IT IS GOING TO GET REPURPOSED. IF IT IS A TOWN, THE VACANCY FACTOR MAY BE 15%-18%, I THINK THE SUPPLY COULD — WE ARE CONVERTING A — FLOORS TO 2-9 IN WHAT WAS A LARGE OFFICE BUILDING WE ARE CONVERTING FROM OFFICES TO APARTMENTS.>>WHAT ARE YOU SEEING WITH REGARD TO THE CO-WORKING SPACING IN NEW JERSEY?>>I WOULD SAY THE MULTIFAMILY THAT IS BEING BUILT TODAY, THE LUXURY STUFF IS INCORPORATING ASPECTS OF THAT. HAVING SOMETHING THAT IS MORE BUSINESS CENTERED, PRIVATE ROOM SO PEOPLE CAN MEET AND WORK FROM HOME. I DON’T THINK IT IS TO THE LEVEL YOU WOULD SEE IN NEW YORK CITY.>>I JUST TOURED A PROPERTY WITH PAUL AND ERIC — THEY JUST DID A PROJECT IN JERSEY CITY RIGHT ACROSS FROM CITY HALL. THEY HAVE RETAIL, ON THE FIRST FLOOR, AND THE SECOND FLOOR IS LIKE THE WeWORK’S CONCEPT. WHERE YOU CAN LEASE AN OFFICE, A DESK, A PHONE, CONCIERGE SERVICES.>>AS A BANKER, HOW DO YOU LOOK AT THE CO-WORKING SPACE?>>IN THIS SITUATION I THINK IT IS AN AMENITY.>>IT IS PART OF THE APARTMENT. I AM TALKING SPECIFICALLY CO-WORKING SPACE.>>WE SIGNED UP FOR SPACE IN BROOKLYN, WE ARE GOING TO HAVE SIX BANKERS WORKING OUT OF IT. AS A TENANT.>>AS A LENDER?>>AS A LENDER WE FINANCED THE PROJECT IN BROOKLYN ALREADY. I THINK IT WAS A PRETTY GOOD TRANSACTION.>>LONG ISLAND CITY RECENTLY, A LARGE APARTMENT HOUSE, ONE THIRD OF THE BUILDINGS IS CO-LIVING SPACE. ARE YOU SEEING CO-LIVING IN NEWARK OR OTHER MARKETS?>>PEOPLE HAVE TALKED ABOUT IT, BUT I HAVE NOT SEEN ANYTHING.>>ME EITHER.>>IN JOURNAL SQUARE, TOWARD — BUILDING AND HE HAS SOME OF THOSE MICRO APARTMENTS. WHEN YOU LOOK AT IT IT IS BASICALLY LIKE A HOTEL ROOM. IT IS COMPACT, BUT IS $30 A NIGHT. AND YOU LIVE IN THERE, I THINK FOR SOME OF THE MILLENNIALS THAT ARE NOT SPENDING A LOT OF TIME IN THEIR APARTMENT, THEY LIKE THE COMMON AREAS, THEY SPENT TIME THERE, THEY ARE WORKING HARD IN NEW YORK, TECHNOLOGY TYPES, CONSULTING, YOUNG PROFESSIONALS. I THINK IT IS A GOOD BANG FOR THE DOLLAR.>>WHERE DO YOU SEE THE BEST OPPORTUNITIES FOR THE GARDEN STATE TODAY AS A DEVELOPER OR OTHER THINGS? ARE YOU SEEING FOREIGN INVESTORS COMING INTO NEW JERSEY? ARE WE SEEING THE MIDDLE EAST, THE INDIAN, THE CHINESE? CHINA CONSTRUCTION HAS A MAJOR DEVELOPMENT IN JERSEY CITY ON HUDSON STREET. A COUPLE OF OTHER PEOPLE I KNOW — WHICH IS AN AMERICAN COMPANY BUT THEIR MONEY COMES FROM ISRAEL, IS ALSO INVESTING IN JERSEY CITY. ARE WE SEEING PEOPLE FROM OTHER PARTS OF THE COUNTRY COMING TO NEW JERSEY?>>CONSIDERING WHO WE ARE, WE ARE AN APARTMENT CONSTRUCTION DEVELOPER FIRST. THE HOUSING MARKET IS STILL UNDERDEVELOPED FROM THE 2008-2012 DOWNTURN. NOTHING HAPPENED FROM THAT 4-5-YEAR PERIOD. WE ARE STARTING TO CATCH UP. WE WILL EVENTUALLY OVERDEVELOP AND THERE WILL BE AT A BOUNCE AGAIN, BUT AT THIS POINT WITH THE NEW MILLENNIALS AND THE NEXT GENERATION, THEY ARE NOT LOOKING FOR HOUSING FOR OWNERSHIP UNTIL THEY ARE 30-35. 21-25, AND COMING OUT OF COLLEGE, THEY LIKE THE NEW APARTMENT.>>WHAT ABOUT THE SINGLE-FAMILY HOUSING? ARE YOU SEEING DEVELOPMENT OR DEVELOPERS BUILDING IN NEW JERSEY?>>ABSOLUTELY. — IS ALWAYS BEEN A BELLWETHER. THEY REDUCE THEIR FOOTPRINT FROM 6500 SQUARE-FOOT TO 4500 SQUARE-FOOT. K HOUSE BRAND IS THE FOUR SEASON, THE BABY BOOMERS AGAIN MOVING INTO THE MARKET. THEY DO IT WELL. THE PRIVATE DEVELOPERS, LIKE US, WE ARE MOVING TO THE APARTMENTS BECAUSE THAT IS WHERE YOU SEE IT. WE ARE NOT GEARED UP TO DO WHAT THEY DO — THE AMENITIES WE TALKED ABOUT –>>THE BABY BOOMERS MOVING OUT OF THEIR HOUSE IN SUBURBIA. AND MOVING –>>THEY WANT TO DOWNSIZE.>>THE OLD — IN MOORESTOWN, I KNOW THREE COUPLES FROM SUMMIT MOVED THERE. I THINK THAT IS MORE THE TREND RIGHT NOW IS THAT PEOPLE WHO WANT TO DOWNSIZE THEIR SUBURBAN HOME, MOVE INTO HOBOKEN AND MAYBE HAVE A HOUSE DOWN JERSEY SHORE FOR THE WEEKEND.>>AS I LOOK AT MY APPLE OVER HERE, IT SEEMS VERY BRIGHT AND SHINY IN THE STATE OF NEW JERSEY. I WOULD LIKE TO THANK MY EXECUTIVE PRODUCER KEVIN CUMMINGS FOR BRINGING HIS FRIENDS FROM NEW JERSEY. STAN, CAREY, JEFF, THANK YOU, I WILL SEE YOU NEXT WEEK. ♪ [THEME MUSIC] ♪

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