Jones Lang LaSalle
Residential projects dominate landscape
Monday, April 17, 2006
By JARRETT RENSHAW
JOURNAL STAFF WRITER
Jersey City's office market boom has hit a wall, making way for a surging housing market that will change the face of the city's Downtown for decades to come, city officials and experts say.
While the 1980s and 1990s saw financial companies such as Goldman Sachs, Merrill Lynch and JP Morgan Chase transform Jersey City's shores into the Gold Coast, today's market is dominated by housing giants like Toll Brothers, K. Hovnanian and Donald Trump.
More than 15,000 residential units are expected to flood the Downtown area over the next several years, putting pressure on municipal services, according to the city's Division of Planning. Though more than seven million square feet of office space was developed from 2000 to 2005, planning officials say the current office market is very sluggish and will remain so for the foreseeable future.
"There are currently no office projects under construction, and none planned," says a planning report authored by Planning Director Robert Cotter earlier this year. Those two opposite trends have prompted at least one expert to declare that "the job growth era is over in Jersey City."
From 1992 to 2000, the state created 243,000 high-paying office jobs, driven by Jersey City's growth on the waterfront, says James Hughes, dean of Rutgers University's Edward J. Bloustein School of Planning and Public Policy.
But since 2000, there has been a net loss across the state, thanks to increases in the state income tax and other business taxes, said Hughes.
"New Jersey has become an unfriendly place to do business," Hughes said.
The most recent sign of this trend is 77 Hudson St., where Hartz Mountain Industries just scrapped plans to build a 32-story office tower because the
company believed that Jersey City cannot absorb the new space.
The company sold the land for $65 million to K. Hovnanian, which now plans to build two 48-story towers, with more than 1,300 condo and rental units combined.
City officials and experts say Manhattan is driving the housing trend, as it previously did with the growth of the office space market in Jersey City.
The high costs of buying a home and living in Manhattan, combined with the market demand for luxury condos in the region, has created such high demand for housing in less costly Jersey City.
"If everything that is being constructed were built tomorrow, we still would still not satisfy the housing demand," said Downtown city Councilman Steven Fulop, who also works in the financial industry.
Mega mogul Donald Trump summed up the city's housing surge when he visited the waterfront last year to announce his $415 million project that will feature the Garden State's two largest residential towers, at 55 and 50 stories - Trump Plaza Jersey City
"I am the largest developer in Manhattan, and I am coming to Jersey City. So a lot of people come the other way, and I am coming this way, and I am pretty good at predicting trends, so let's hope that's a trend," Trump said.
And when the Athena Group and Golden Tree InSite Partners announced a $110 million condo project on the Hudson waterfront in October of last year, the president and CEO of the Athena Group said "Jersey City is in the midst of a phenomenal housing boom."
With the boom in residents come issues that need to be addressed, says Fulop.
"We need to continue to hire more police officers, but we need to make sure we're hiring more than we are retiring," said Fulop.
© 2006 The Jersey Journal
© 2006 NJ.com All Rights Reserved.
Residential projects dominate landscape
Monday, April 17, 2006
By JARRETT RENSHAW
JOURNAL STAFF WRITER
Jersey City's office market boom has hit a wall, making way for a surging housing market that will change the face of the city's Downtown for decades to come, city officials and experts say.
While the 1980s and 1990s saw financial companies such as Goldman Sachs, Merrill Lynch and JP Morgan Chase transform Jersey City's shores into the Gold Coast, today's market is dominated by housing giants like Toll Brothers, K. Hovnanian and Donald Trump.
More than 15,000 residential units are expected to flood the Downtown area over the next several years, putting pressure on municipal services, according to the city's Division of Planning. Though more than seven million square feet of office space was developed from 2000 to 2005, planning officials say the current office market is very sluggish and will remain so for the foreseeable future.
"There are currently no office projects under construction, and none planned," says a planning report authored by Planning Director Robert Cotter earlier this year. Those two opposite trends have prompted at least one expert to declare that "the job growth era is over in Jersey City."
From 1992 to 2000, the state created 243,000 high-paying office jobs, driven by Jersey City's growth on the waterfront, says James Hughes, dean of Rutgers University's Edward J. Bloustein School of Planning and Public Policy.
But since 2000, there has been a net loss across the state, thanks to increases in the state income tax and other business taxes, said Hughes.
"New Jersey has become an unfriendly place to do business," Hughes said.
The most recent sign of this trend is 77 Hudson St., where Hartz Mountain Industries just scrapped plans to build a 32-story office tower because the
company believed that Jersey City cannot absorb the new space.
The company sold the land for $65 million to K. Hovnanian, which now plans to build two 48-story towers, with more than 1,300 condo and rental units combined.
City officials and experts say Manhattan is driving the housing trend, as it previously did with the growth of the office space market in Jersey City.
The high costs of buying a home and living in Manhattan, combined with the market demand for luxury condos in the region, has created such high demand for housing in less costly Jersey City.
"If everything that is being constructed were built tomorrow, we still would still not satisfy the housing demand," said Downtown city Councilman Steven Fulop, who also works in the financial industry.
Mega mogul Donald Trump summed up the city's housing surge when he visited the waterfront last year to announce his $415 million project that will feature the Garden State's two largest residential towers, at 55 and 50 stories - Trump Plaza Jersey City
"I am the largest developer in Manhattan, and I am coming to Jersey City. So a lot of people come the other way, and I am coming this way, and I am pretty good at predicting trends, so let's hope that's a trend," Trump said.
And when the Athena Group and Golden Tree InSite Partners announced a $110 million condo project on the Hudson waterfront in October of last year, the president and CEO of the Athena Group said "Jersey City is in the midst of a phenomenal housing boom."
With the boom in residents come issues that need to be addressed, says Fulop.
"We need to continue to hire more police officers, but we need to make sure we're hiring more than we are retiring," said Fulop.
© 2006 The Jersey Journal
© 2006 NJ.com All Rights Reserved.
posted by Jones Lang LaSalle NJ News Blog at 1:39 PM
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