[NYguy]

northjersey.com

The two towers

Thursday, June 22, 2006
By HUGH R. MORLEY


Two 500-foot towers with 901 housing units will rise above the Jersey City waterfront as a more affordable alternative to Manhattan, two developers announced Wednesday.

Red Bank's K. Hovnanian and Chicago-based Equity Residential said they each will build a tower on a 1.76-acre parcel bought from Hartz Mountain Industries of Secaucus for $70 million.

The two will target different markets. Hovnanian will build 420 condominiums, mostly one- and two-bedroom apartments. At the lower end, studios are expected to sell for $300,000. And a small number of penthouses will go for $2 million. Equity Residential's tower will contain 481 apartments. Studios will likely rent for upward of $1,900 and two-bedroom units will probably go for more than $3,000, the company said.

The towers are scheduled to be completed in spring 2009.

Both developers said they expect considerable demand for the units, despite indications that the real estate market is slowing down.

"We believe it will appeal to working professionals seeking proximity to Manhattan, without Manhattan prices," said Megumi Brod, an Equity Residential vice president.

She said it is too early to say how much cheaper the New Jersey units would be than those in New York. But Hovnanian said it expects the condominiums to be 40 percent to 60 percent cheaper than comparable apartments across the Hudson River. The company said that's one reason it is bullish on New Jersey's residential market, especially along the Hudson County water-front.

Another reason is a trend of suburbanites moving to the city, including many older couples whose children have left home, said Randy Brosseau, Hovnanian's area vice president.

"They no longer need the larger residence," he said.

"And they are looking to downsize and have a terrific access to the city in a terrific new modern condo or town home.

At the same time, he added, Jersey City has become a more attractive place to live.

"We have reached a tipping point," he said.

"We see a lot of improvement in retail and lifestyle, and it's generally a much better place to live now than it was 20 years ago, even five years ago."

Still, there is plenty of local competition for buyers. Just a few blocks away, Donald Trump is building more than 850 up-market units in two towers.

Farther north along the coast, Hovnanian this weekend will begin selling 268 loft apartments and 68 town houses that the company is building in West New York, among several other projects under construction on the waterfront.

Scott Selleck, a broker at NJ Gold Coast Real Estate in West New York, noted that the Montgomery Green condominiums nearby has yet to sell out.

"It's a risky situation," he said. "There is a possibility of oversupply. It may be difficult to move those condos."

He said there is a big demand for rental units in that area, however.

Hartz Mountain said it had planned to build offices on the site since 1999.

James Hughes, dean of the Edward J. Bloustein School of Planning and Public Policy at Rutgers University, said: "It doesn't seem as if there is a need for new office construction along the waterfront."

In contrast, the high residential prices in Manhattan have created a significant spillover demand in Jersey City, as people look for cheaper alternatives, he said.

Noting that the Trump building is nearby, Hughes said:

"It's going to be competitive, probably. But it suggests there is a new confidence on the waterfront that it is now a viable, established market for residences."