Harrison Redevelopment

[tbal]

According to the flyer at the link below, the building referred to as "Building 3" on leasing maps is scheduled to break ground before the end of this year, in addition to the hotel and second rental building. Building 3 is the building on the opposite side of Building 1 from where the hotel and second rental building will be going U/C in a few weeks; it's between Railroad Avenue and the center street in Harrison Commons (formerly Middlesex Street). According to the flyer, it will have 275 residential units (condos?) and another 13,000 square feet of retail space to match the amount in Building 1. This is ontop of the 132 units that the building to be constructed next to the hotel and around Harrison Parking Center will have.

So it looks like there will be over 400 apartments and about 140 hotel rooms under construction just in Harrison Commons alone by year end (add to that about 600 in Riverbend, 140 in Riverpark, and 60 in HUR's Harrison Station, and you have just under 1,350 ratable units in 8 buildings under construction simultaneously in an area of less than half a square mile!).

Link to flyer: http://www.mwilkconsulting.com/image...on%20Flyer.pdf

(and for those of you who missed the previous page, Hoboken's Sparrow Wine & Liquors, Dunkin Donuts, and GNC have all declared intent to sign for space in Building 1 and the hotel!).

[Accordian]

So its now 4 months later after my brief analysis of what the development schedule looked like in Harrison and now everyone is coming to realize that maybe I was right?

Here was the estimate from a while back;

OK FOLKS LETS COUNT THEM UP:
IRON STATE/PEGASUS --- 400 units
RUSSO BLocks C&D--------450 units
HArtz site ----------------300 units
Riverpark------------------200 units
BLOCKS E&F---------------600 units
Tops Diner site-------------200 units
total ---------------------2,150 units

The new count below reconciles to my count as follows:

Russo phase 2 --- 225 units
over count on the tops diner and riverpark 200 units
already built ---- 200 units

Kinda close, dont you think?

again, not all jobs will start and not all jobs will get financed as some people have legacy problems and some banks will get nervous about absorption. Notice that NONE of the major REITs are players yet. When someone like AvalonBay, Archstone or Equity Residential enters this market that becomes validation. Right now they are concened about market depth

So lets keep the acrimony in check and watch to see what happens.

According to the flyer at the link below, the building referred to as "Building 3" on leasing maps is scheduled to break ground before the end of this year, in addition to the hotel and second rental building. Building 3 is the building on the opposite side of Building 1 from where the hotel and second rental building will be going U/C in a few weeks; it's between Railroad Avenue and the center street in Harrison Commons (formerly Middlesex Street). According to the flyer, it will have 275 residential units (condos?) and another 13,000 square feet of retail space to match the amount in Building 1. This is ontop of the 132 units that the building to be constructed next to the hotel and around Harrison Parking Center will have.

So it looks like there will be over 400 apartments and about 140 hotel rooms under construction just in Harrison Commons alone by year end (add to that about 600 in Riverbend, 140 in Riverpark, and 60 in HUR's Harrison Station, and you have just under 1,350 ratable units in 8 buildings under construction simultaneously in an area of less than half a square mile!).

Link to flyer: http://www.mwilkconsulting.com/image...on%20Flyer.pdf

(and for those of you who missed the previous page, Hoboken's Sparrow Wine & Liquors, Dunkin Donuts, and GNC have all declared intent to sign for space in Building 1 and the hotel!).

[tbal]

Accordian, I'm not a mean guy, but you honestly don't have the slightest clue about what you're talking about, and I think it would be appreciated if you stop spamming this board. The numbers you mentioned are complete nonsense; there was never anything brought before the Planning Boards in Harrison & East Newark to even suggest the numbers you have as 'estimates' above (with the exception of Riverbend Blocks E & F, which matches what you wrote by some miracle). It almost seems like you're counting sheep each night and writing down the last number you remember and associating those numbers with random developers.

Since Russo first got involved in Harrison, the plan has always been for less than 300 units in the first building, and Russo upped the count by 20 units from the original plan (Russo doesn't even have the development rights for Block D, let alone proposed a building for that site!). Ironstate originally was going to build 132 residential units in the next phase, now the count is 275 (that's also what we humans call an increase). Riverpark didn't even announce plans to build until mid-March, and the number slated for the next phase (which matches the number proposed back in 2004/2005) is 140. Riverbend Blocks E & F are slated to have 296 units each, with construction to start later this year. The Tops Diner site was never proposed to have 200 units, the original proposal (go back to the East Newark Planning Board minutes from last year) called for 60 units, which is what they have under construction right now. As far as construction start dates are concerned, nothing has been pushed back to date in this next wave of construction.

And it seems like you don't understand how a master redevelopment process works. Perhaps instead of wasting time trolling the board, your time would be better spent taking a continuing education course in real estate process. The truth is that every redeveloper involved in Harrison has increased the unit count for their next phase of construction or moved their start date earlier. And the lease-up rate in the first HC building was much faster than originally forecast, with an absorption rate of 275 units in 7 months; if that was when the building had a single retail tenant, nothing surrounding it but empty lots, and several massive decaying graffiti-covered abandoned warehouses full of broken windows across the street, you can see why developers are optimistic about the market here.

(Oh, and btw - in case you didn't realize, neither Archstone nor Equity Residential have ever been big players in Hudson County; Ironstate has more projects slated to break ground this year alone than Equity Residential has built in the last 3 decades in all of Hudson County).

[Accordian]

Perhaps you should re-read my comments before you respond. My comments reconcile where it appeared we were several months ago to where we are today. The #s reflect what has been built + what is on the boards and show a few over estimates that I made at that time. NOTE Riverbend Russo is ultimately a 2 phase project, always was. Follow the math and don’t be so defensive.

Also you can approach development as an academic or as a planner. When you approach it as someone who will actually put their net worth on the line to get something built, you know that actual completions only happen when strong guys get funding. IF you are out there today, you know that even strong guys are finding it more difficult to put their capital in place. My Classic example is Mike Facitelli telling an audience a little over a year ago that HE CAN'T GET A CONSTRUCTION LOAN.

As to AvalonBay, They have been on a tear lately all over NNJ. Probably started just as many projects as anyone else over the last 24 months. They don’t need project level financing --- they have one of the best financial statements in the industry

Point is --- with Russo, Heller, Ironstate and Roseland there are 4 significant privately held strong balance sheets involved in the Harrison re-development. The markets will regulate deliveries for the time being, which is good for everyone.

As to taking remedial courses. Don’t need to. I actually do this stuff. Learned by observing. Go to different markets (i.e. NOT NJ). Talk to good solid developers. Talk to really good governmental professionals that actually have the skills to hold their jobs. Find out why projects did or didn't work. Find out how they actually operate after the glory of the ground breakings and the grand openings are over, done and paid for. Do a couple of 5 year post mortems on MXD projects and learn that where the trash compactors are located, How the food operations are vented and how sound attenuation was mitigated actually do make a difference in the residential operations.

The planning board charrettes and the big name architects are great, but solid operating guys building in your town are better. Fortunately, we have a few here.

Let’s leave it at that.

PS -- Al Gore created the internet to be free for everyone's use.

[tbal]

My whole point was that the estimates you mentioned have no basis - numbers as high as those were never passed before the Planning Board ever. And yes, AvalonBay is a successful redeveloper with a large portfolio, but I wouldn't base a judgement of the success of Harrison's redevelopment on whether or not AvalonBay is developing here (to be honest, Avalon has been the largest failure of a company in the sphere of urban redevelopment in NJ - at Avalon Cove in JC, they ended up selling off the tower portion of the project years after it was built because competing developments by Roseland and Applied/Ironstate were of much higher quality and better managed; in Lyndhurst, they were only able to put one building up before they realized they overestimated market demand and the rest of the redevelopment project fizzled; and if you look at Avalon Cove, people began migrating to Roseland's Monaco in droves once it opened its doors because Avalon was seen as such lackluster development by comparison...and wait, isn't Roseland building in Harrison?). If you want to extrapolate anything, extrapolate the data we have - one large building in the biggest sh*thole of a neighborhood on the PATH system that leased up with incredible speed (and that neighborhood is rapidly aggregating all the elements it needs to become a desirable place to live). There's a reason why Ironstate has accelerated it's development plans, and Ironstate, unlike AvalonBay, has a stellar track record in urban redevelopment in this type of market (in fact, Ironstate was deeply involved in Hoboken's transformation long before any other developers, and in case you haven't heard of Hoboken lol, I wouldn't exactly call its redevelopment a failed effort).

[Accordian]

Heard of Hoboken, have close friends who invented redevelopment there in the late 70's early 80's.
Ironstate is a great developer.
Roseland is a great developer.
We're lucky to have them.

Lease up of Harrison Station was exemplary. Even better than projected.
Trick now is how to phase in new projects so that over supply doesnt cause concessions on renewals for exiiting properties.
NNJ is a strong market, 10% rent growth in some major properties, however, when you take a new market like Harrison you need to be cautious.

Unlike you, I am in the market every day with assets that I own that need financing and refinancing.
its not peaches and cream out there, even in the most liquid asset class, Multifam.
MXD cash flows offer challenges to Agency refi's which offer challenges to the developer, unless someone wants to guarantee 50+% of a $40 Million construction loan.

YA GOT $20 Mill to lay on the table for a high risk deal? then you can play.

[Nexis4Jersey]

My Harrison photos from yesterday...


DSCN4673 by Nexis4Jersey09, on Flickr


DSCN4677 by Nexis4Jersey09, on Flickr


DSCN4679 by Nexis4Jersey09, on Flickr


DSCN4680 by Nexis4Jersey09, on Flickr


DSCN4683 by Nexis4Jersey09, on Flickr


DSCN4697 by Nexis4Jersey09, on Flickr

[tbal]

Nice photos Nexis - you beat me to it! I noticed that the town finally began taking down the old traffic lights at the intersection of Cangemi (former Middlesex St) and they're also finally cleaning up the shoulder area on Rodgers, digging up the old curb to widen the street & repaving. Things are looking good - can't wait for that hotel to break ground and see some action at the Russo site in the coming weeks, and I hear that Heller might be done with demo ahead of schedule and construction might begin a few months early where the old Hartz factories are coming down.

[vajt]

Thanks for all the updates tbal. I don't want to put down DD but what a shame another coffee place didn't open up instead. We already have DD in town so a new player would have been welcome.

Today I walked by the apartments and noticed a new "Pronto coming soon" poster...took long enough.

That area will look great in a few more years.

-----JT-----

[tbal]

I hear ya, vajt. Perhaps a starbucks will open at the other end of Harrison Commons (near the river) once the area is more developed, and there is all that retail on the other side of the PATH station too...so don't lose hope yet ;-)

I also noticed the new sign in the window for Pronto Marketplace; hopefully they open soon - I can't wait to see some more signage on that building to give the area more character. I also can't wait for the other tenants to move in - Sakura sounds like it will be a great place for a nice dinner on a Saturday night.

[vajt]

I also went to Shoprite this weekend and noticed they are making good progress on the new complex next to Tops Diner. Maybe this will be the opportunity to get a new tenant in the now empty Pathmark lot...funny, if Pathmark only lasted a little longer, they may have had a new group of customers just a few blocks away. I used to like Pathmark, much better parking and more spacious...oh well. I still have hope for a Trader Joe's

-----JT-----

[tbal]

Yup - I noticed last weekend that all of the enclosures for the stairwells were complete; looked like they were ready to begin construction on the upper floors of the building. I've been wondering about the plans for that area in particular if that building is in fact a success - will they purchase the site that is for sale across the street (former concrete plant)? I'm also wondering if they would redevelop the actual diner site, but it might be more likely that they'd go for redeveloping the former BASF site and concrete plant site first since the diner has a serious following.

Anyway, the Planning Board was supposed to have a meeting this past Tuesday for the Heller site plans; not sure if it actually happened, but NK Architects, the firm designing the buildings, posted the following on Tues. It looks like they are mirroring the streetscape that Pegasus/Ironstate created with Harrison Commons by having retail along Rodgers Blvd and a large open plaza area at the intersection of Rodgers and Cangemi/Middlesex St (all content below courtesy of NK Architects):

NK Architects is working with Heller Industries on a redevelopment project in Harrison. The goal of this project is to create a vibrant mixed-use, transit-oriented, pedestrian-friendly, archite...cturally sensitive and inviting complex that will become a strong neighbor to the other developments planned for the waterfront.

The complex of six new buildings and site improvements will provide 26,000 gross square feet of retail space, 747 apartment units, parking and landscape elements throughout which collectively creates an exciting environment for its users. The six buildings consist of four five-story buildings and two nine-story buildings which will be constructed in phases.

The first building to be constructed will be situated on the southernmost portion adjacent to the Harrison PATH Station of the site. It will comprise 92 residential units, 13,000 gross square feet of retail and resident amenity spaces, as well as parking spaces for both residential and retail use.

[dennis200dz]

Tbal, it is disappointing that all 747 housing units in the Heller Development are going to be rentals. This is not great news for the town. I am quite unimpressed by all of this "so called" development news. Right now, nothing is being built although the Heller Site is being demolished and cleared. In the last few months, there has been a flurry of press releases, but no actual building. The only thing being constructed are "press releases." Why hasn't Russo started construction yet ? It is all BS and no building. I hope that the coming months prove my statements to be wrong.

[tbal]

Tbal, it is disappointing that all 747 housing units in the Heller Development are going to be rentals. This is not great news for the town. I am quite unimpressed by all of this "so called" development news. Right now, nothing is being built although the Heller Site is being demolished and cleared. In the last few months, there has been a flurry of press releases, but no actual building. The only thing being constructed are "press releases." Why hasn't Russo started construction yet ? It is all BS and no building. I hope that the coming months prove my statements to be wrong.

Hey Dennis - I know what you mean; there certainly has been alot of talk and very little activity thus far. But keep in mind that since the Russo development was announced, the plan was to start vertical construction in May or June; since the Element hotel plan was made public, the plan has always been to start construction in June or July. Summer is historically peak season for groundbreakings in the NYC area (actually Building 1 in Harrison Commons broke ground in August of 2010). I feel that activity has been accelerating in Harrison (actually, all over Hudson County) - a year ago, there was nothing going on except finishing touches on the first Harrison Commons building. In the past month alone, we've had infrastructure construction, major demolition, PATH station construction, and retail construction/fit-out taking place all around the PATH station area. That's quite a bit of economic activity. I could be totally wrong, but I think what we've seen so far is just a preview of some incredible things to come for Harrison (you can quote me in a few months if I'm totally wrong about all this!).

I think we're in for some major changes in the area by September (Heller property significantly demolished; IDVG building in East Newark topping out; Walmart expansion & Wawa topping out; groundbreakings at Element, Russo, and Riverpark; several new retail shops/restaurants opening at Harrison Commons). Of course, time will tell, but there's been increasing chatter in the development community and there are several fundamental factors (such as a relatively peaceful suburban-ish setting very close to several major job centers - Newark, Clifton, Jersey City, Hoboken, Manhattan) that will draw people to the area once we have a few more plots of land filled in.

As far as rentals are concerned, keep in mind that over 80% of residential units in Manhattan are rentals, and I doubt that has hurt property values (Manhattan condos happen to have the highest price/sf in the U.S.); you'll see a similarly high proportion of rentals in other cities where people want to spend their time (such as Chicago and Washington DC).

One last thing: the mix of rentals vs. condos actually hasn't been determined yet as far as I know. All that is known is that apartments will be filling the upper floors instead of retail/office/institutional space.

[ASchwarz]

As far as rentals are concerned, keep in mind that over 80% of residential units in Manhattan are rentals, and I doubt that has hurt property values (Manhattan condos happen to have the highest price/sf in the U.S.); you'll see a similarly high proportion of rentals in other cities where people want to spend their time (such as Chicago and Washington DC).

Manhattan is something like 70% rental. DC is around 50% rental. Chicago is about 45% rental.

But, you're right, rentals don't seem to hurt the housing market. Manhattan has, by far, the highest property values in the U.S. San Francisco, the city with the second highest property values, also has the second highest proportion of renters.