At first glance, you’d think Hoboken couldn’t squeeze in another square inch of residential construction. Not only is it just one square mile, but development in the former industrial city has been going on for decades. Currently, only around 7 percent of the construction of apartment buildings with 40 or more units in Hudson County is taking place in Hoboken, according to real estate market research firm Reis.
But there’s still plenty of action underway in the city with a population of 50,000. Driven in large part by mushrooming prices in New York City and an easy commute to the Big Apple, there are at least five large apartment buildings and mixed-use developments in the works, along with many smaller projects. An estimated 1,804 residential units were approved by the zoning and planning boards from 2010 to this year, according to the mayor’s office.
Developers are building to satisfy demand from young professionals moving in from across the Hudson, and the desires of growing families looking to stay in the city.
“It’s a small place, but we’re still seeing development in the works,” said Henry Waller, vice president of Toll Brothers City Living, which is developing two large properties in Hoboken.
As you’d expect, many of the most luxurious developments are going up by or near the waterfront, with a mix of rentals and condos.
Toll Brothers, for example, has two condo projects in the works on the northern end of the waterfront. Both were started in 2005, are partially completed and feature amenities including pools, fitness clubs, attended lobbies and residence clubs.
There’s the Hudson Tea building, a former Lipton Tea factory converted to rentals in the 1990s that Toll Brothers then bought in 2005 and turned into a condo development with 525 units. The company then built a 116-unit addition, followed by another 157-unit building, and is now constructing a larger, 236-unit building. Another, which will be around 100 units, is in the design phase.
The other development, known as Maxwell Place, will be a four-building condo complex. So far, 755 units are completed. The third building, which the company started closing about a year ago, is about 80 percent sold, according to Waller. The last building, which is in pre-design phase, will have around 100 units.
Apartments in both projects command about $900 to $1,000 a square foot; two went for $1,300, according to Waller. That’s compared to an average price of about $2,586 per square foot for luxury condos and co-ops in Manhattan, according to Jonathan Miller, president and CEO of real estate appraisal firm Miller Samuel.
Hoboken-based developer Bijou Properties is finishing up a mixed-use, 12-story, 212-unit waterfront-area rental known as Park + Garden.
Previously, the site housed a textile factory and then a parking garage. The LEED Gold-rated property has 15,000 square feet of retail and 32,000 square feet of educational space, which will contain a charter school and a fully automated garage.
Rents are still being determined for the building, which should come on the market in July, according to Larry Bijou, managing partner. He describes them as “very high end.” Top of the line rents in the area generally go in “the mid-40s” a square foot, according to Bijou.
Perhaps the biggest project in the works near the waterfront is a plan to develop about 50 acres along the city’s NJ Transit tracks, spanning both Hoboken and Jersey City.
“This is underutilized property owned by NJ Transit that can be repurposed into a vibrant mixed-use development,” said Jim Driscoll, senior vice president of LCOR, which was selected eight years ago to be the developer.
Driscoll expects the lengthy approval process of the development by multiple government agencies to take two years, with final completion of the project in 2019. The complex probably will be a rental, though that hasn’t yet been determined.
There’s also development on Hoboken’s west end, which has become increasingly trendy since NJ Transit opened up a light railway station there 10 years ago. On the site of a former vacant lot there, Bijou Properties is working on 900 Monroe, an 11-story, 135-unit mixed-used luxury rental, which is a joint venture with Intercontinental Real Estate Corp. Slated to be completed in the fall, it will have 13,500 square feet of retail space, including a day-care center and a 135-car parking facility.
Also, in the west and southeast of Hoboken, many smaller-scale developments are underway. Red Bridge Group, for one, is developing five small high-end projects, which range from two to four units. All are tear-downs of existing structures. The apartments in one two-unit building have already sold — one for $1.7 million and the other for $1.8 million — even though the development hasn’t been completed yet. “Hoboken is an especially good fit for our niche,” said managing partner John Heidenry.
There is an additional hassle for developers in Hoboken, however. Because so much of the city was industrial, many projects require environmental clean-up work.
One major example is Willow14, a seven-story, 140-unit mixed-use building on the site of a former gas manufacturing plant. Developer Advance Realty, which closed on the property in 2011, faced what managing director of development Michael Sommer calls “a very challenging clean-up.”
In order to remove the potentially contaminated soil, builders had to go all the way down to the bedrock, an unusual move. The building, which Sommer expects to begin renting in March 2016 and is the developer’s first property in Hoboken, will also include 20,000 square feet of retail space and 363 parking underground parking spaces.
“In Hoboken, there’s always some environmental remediation,” said Bijou.