Developers in Jersey City are building apartments as fast as they can to capitalize on New York’s relentless appeal and astronomical cost of living, but a tipping point of one sort or another is on the horizon.
Although the city’s apartment pipeline is robust, absorption remains healthy among even the most expensive multifamily buildings, according to a Marcus & Millichap second-quarter report on Hudson County. But the opposite is true for the office market, where average rent is down and vacancies are increasing, according to a Savills Studley report on the Gold Coast.
Those diverging trends could be taken to mean that Jersey City’s multifamily market is increasingly dependent on commuters. Panepinto Properties Chief Investment Officer and Director of Operations Gordon Gemma estimates that 60% to 70% of his company’s multifamily tenants are employed in New York.
“The number is higher than I’d want it,” Gemma said. “The amount of residential here, and the price of it in the downtown is [appropriate for] an office worker who’s making a good buck. We should be able to capture and retain those offices here in New Jersey and not have to commute over to New York.”