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A lesser-known Kushner bets big on Jersey
Kushner on his $1 billion luxury development Journal Squared, and where he thinks the market is headed
Jonathan Kushner may live in Manhattan, but the 37-year-old president of the Kushner Real Estate Group is betting big on Jersey City. His Bridgewater, New Jersey-based company owns and manages around 12 million square feet of commercial and residential real estate in New York, New Jersey and Pennsylvania, with roughly 80 percent of it in the Garden State. Kushner’s more famous cousin, Jared, is also developing real estate in Jersey. But a family rift that began a generation ago seems to endure between the two.
Among many other projects, Kushner is hard at work on Journal Squared, a $1 billion luxury rental complex under construction in Jersey City. When finished, the three-tower complex will have 1,838 apartments and 40,000 square feet of ground floor retail. The first phase, with 538 apartments, will be ready in fall of 2016. The tallest of the towers will have 70 floors and stand 700 feet tall.
How does Journal Squared stack up to your previous projects?
It’s the largest project we will have built to date and one of the tallest in Jersey City. There are other groups saying they will be building the tallest. We don’t care as long as it’s the best leased.
How will rents compare to Manhattan?
We trend around half the cost of similar “amenitized” product in Manhattan. Starting rents will be $1,600 to $1,700 for studios, going up to around $4,200 to $4,300 for higher floor two-bedrooms.
What about three-bedrooms?
There won’t be three-bedrooms in the first tower. Only in the third tower will we go after families. The market now in Jersey City is young and hip and having fun. Eventually those people will have kids.
Journal Square is a less gentrified area and a PATH stop farther from Downtown Manhattan. Is that a risk?
If you’re leasing at half the cost of Manhattan and you’re very close to the train, you will be successful in Jersey City. The mayor is doing all the right things to grow the town, helping to secure a greater school system and a better life for people who want to go out at night. And the transportation is much better than anything across the river.
What other projects are in the works?
In Jersey City we have several other projects. We’re in the design stage of a two-tower complex on the corner of Grand and Grove in Liberty Harbor North with 688 units, right near City Hall. We just completed 18 Park, a 555,000-square-foot apartment building in Liberty Harbor North. We also just completed construction of a new Boys and Girls Club of Hudson County. We’re also building the largest project in the state of Pennsylvania, in Bethlehem. It’s 832 units with 155,000 square feet of retail. And we recently completed two other projects in Pennsylvania and have two more in design phases now.
How does your investment company operate?
We started that business 10 years ago, KRE Capital Partners. We provide equity for operating partners to build and buy real estate. That totals another 2 million square feet of investment we have in other people’s projects.
Let’s get back to Jersey City. How has it changed in the last five years?
Five years ago we were talking about bringing nightlife and a streetscape. Now we have both. We have active farmers’ markets. We have young couples moving there and at the same time we’re starting to see an older demographic come into our buildings — empty nesters, people who want to be close to Manhattan but can’t afford it. Jersey City is the next Brooklyn; it’s already happening.
How are your existing properties doing in the area?
Incredibly well. We have very little vacancy, every week we outpace the prior week’s numbers on traffic. All of our rentals are 40 percent to 60 percent less than the price in Manhattan.
What do you see going forward for the market?
If job growth continues in New York City, and interest rates stay where they are and don’t jump too much, we’ll keep on building. Already if you look back at Google maps year over year, the change in development and the amount that’s coming into town, it’s amazing. JPMorgan just announced it was moving 5,000 jobs there. There’s good news every day.
What is your biggest challenge?
Trying to figure out where the next batch of young people are going to want to live.
Are you looking at new markets?
We’re looking at a bunch of other places.
Your cousin Jared is also building in Jersey City. Are you in touch?
We’re on different sides of Journal Square. They’re on the western side, we’re on the east side. We’re not partners on each other’s projects.
Would you ever move to Jersey?
No. My wife and I are really happy raising kids in Manhattan.