This week's guest: Debra Tantleff Founding Principal Tantum Real Estate

0:00 Speaker 1 Good morning. This is Mike Stoler for the Stolar real Estate Report on the Cats Around Table this morning. I have probably one of the most active, well respected real estate developers consultants in the state of New Jersey, my friend Debb Tantliffe, who is the founding principle of Tantum real Estate. As opposed to me reading what Tantum real

0:20 Estate is, I’m going to ask Debb to tell me about it.

0:23 Speaker 2 Well. First, Michael, it’s always a treat to see you. Thank you for having me.

0:27 Speaker 3 We are a multi family and mixed juice developer and development advisory firm in New Jersey.

0:32 Speaker 2 So we work on a range of projects.

0:35 Speaker 1 Do you are you allowed to come over the bridges and the tunnels?

0:37 Speaker 2 So we’re allowed, but we try not to. We really specialize in Jersey.

0:41 Speaker 3 Jersey is a very high barrier to entry market and the process is very different, and so when I do step foot on the other side of the river, I really feel like I’m out of water.

0:51 Speaker 2 Okay, So we work on.

0:53 Speaker 3 A range of projects in a variety of capacities I would say twenty units to three hundred acres and everything in between all throughout the state. Primarily focused on ground up redevelopment and mixed use.

1:06 Speaker 1 Now, you are a certified Women’s Business enterprise. What does that mean.

1:11 Speaker 3 It means that I’m a wholly owned business and I’m a woman. And there are a lot of benefits to being a certified business in that respect, in terms of abilities to access financing and meet a lot of corporate and public diversity and equity initiatives.

1:30 Speaker 1 And most of your work is residential development.

1:33 Speaker 3 Correct, Yes, sometimes with a commercial component, but everything is anchored in housing.

1:37 Speaker 1 So let’s talk a little bit about the developments that you’ve been involved with in what’s happening in New Jersey now? Because always the big projects were in Jersey City, maybe even Hackensack and Hoboken. What’s happening today?

1:51 Speaker 3 So Jersey is seeing an influx of countless number of new construction multi family projects, which was really spearheaded on the heels of our last round of affordable housing obligation, and so a lot of municipalities entered into settlement agreements to allow these projects to be built.

2:10 Speaker 1 For the layman, explain what that means.

2:12 Speaker 3 So we are in dire housing shortage, hundreds of thousands of units short and New Jersey municipalities each have a legal obligation to develop and serve their communities with a certain number of affordable housing inventory that is a deed restricted product for people making you know, below an eighty percent average media and income and what’s.

2:35 Speaker 1 The average median income in the Jersey and.

2:38 Speaker 3 It changes, it changes by market, so that that’s also the challenge of doing these developments is everything is underwritten based on the incomes for the for that region and what are.

2:48 Speaker 1 The developers get in exchange of providing the affordable housing.

2:52 Speaker 3 So there’s you know, there are standalone one hundred percent affordable housing projects and then there are inclusionary that our market rate with an an included component similar to what you have in New York.

3:02 Speaker 2 As an eighty twenty project.

3:06 Speaker 3 You don’t get anything other than your approvals and the ability to do your job. But as part of those approvals, you are frequently able to negotiate long term financial agreements that benefit in the form of tax abatements and establish set rents, set tax payments. There are other financing incentives available that allow you to you know, have a little

3:27 bit more of.

3:28 Speaker 2 A sophisticated capital stack.

3:30 Speaker 3 But it’s really about helping the financial math of the deal makes it.

3:33 Speaker 1 What about the condominium world, how do you do that?

3:37 Speaker 3 There are pockets of condominium development in New Jersey. There is plenty of horizontal town home and single family development. The condominium products are a little more few and far between. They also any for sale and rental all come with an affordable an affordable housing.

3:55 Speaker 1 Obligation of building units on site.

4:00 Speaker 3 Yeah, the trend has really been that they have to be included on site. Sometimes they are in the same building, sometimes they are a separate building. But the process and the days of paying into a fund or developing them off site or rehabbing or other inventory is less less preferred at this point.

4:20 Speaker 1 Okay, before the show, we discussed the transit oriented or near transit oriented development. I want to explain that.

4:28 Speaker 3 Sure, so you know, when people think of transit oriented development, they think of trains. We have a lot of trains in New Jersey, but we have a lot more buses and we have some light rail. In terms of transit oriented development, it is a It is a key indicator for investment opportunity. It is a opportunity to create critical mass.

4:50 There is a good component of those transit oriented development projects that actually benefit from their proximity and their transit network to bring people into Manhattan. But there is much about intermodal opportunities and accessing Newark or Princeton or other corporate centers. But in New Jersey, as a mostly suburban state, it is really about creating critical mass around that mass transit.

5:15 Speaker 1 With regard to that, you’ve been not a proponent or i’d say an advocate against parking requirements. If we want to explain the parking requirements for residential.

5:26 Speaker 2 They’re too high. That’s the simplest explanation.

5:29 Speaker 3 Our state requirements require on average just shy of two parking spaces per unit, regardless if it’s a studio or a three bedroom. That kind of that that becomes the blend on your project. There are different ratios for each unit type, but on the average, and the reality it is is that we we build too much parking because

5:49 not everybody is buying those cars. They much prefer walkable, walkable communities and accessing their mass transit systems. And if we don’t have to build that much as much parking, we can use the foot for more housing, and we can use those dollars to build more housing as opposed to distributing to our housing cos.

6:05 Speaker 1 And you can also reduce the rent on.

6:08 Speaker 2 The property absolutely, you know.

6:10 Speaker 3 I’m involved with the real Estate Center at Rutgers and we issued a white paper and it shows that on average, if you eliminate and reduce your parking requirements, you could bring your rents down, you know, four to five percent.

6:21 Speaker 1 Let’s talk about the Jersey Shore, which you’ve been involved with recently.

6:25 Speaker 3 Sure, so we again, we worked throughout the state. We recently just finished a project down in Mammouth County and we are working on some entitlements in another community.

6:35 Speaker 2 The Jersey Shore is a beautiful.

6:38 Speaker 3 Component of the state and it is a landscape where there’s a lot of different smaller communities. Each have their own personality and their own dynamics, but they are anchored in access to the waterfront. And some communities are more seasonal and some are more year round residential base. And so it posts COVID used a huge influx of people

7:00 down into Mammoth County. Open space, open you know, fresh air, the sea, you know, and and water. It is a it is a tremendous opportunity. It’s a beautiful quality of life in Mammoth County and and the shore brings with it a lot of different entertainment and recreational elements to lifestyle that really interplay quite nicely with house.

7:23 Speaker 1 What about Long Branch and Asberry Park.

7:25 Speaker 3 So they are two of the most desirable communities within Mammoth County.

7:29 Speaker 2 We are currently working on something in Long Branch.

7:32 Speaker 3 Asberry Park is one of those communities that is seeing condo development and they are they are selling condos, you know, a thousand dollars a square foot, which is pretty high for New Jersey, and and you’re seeing a lot of New York and Manhattan buyers come and have it as a second second you know, beach house, but you’re also

7:51 seeing more year on people there as well. But they have very walkable downtowns with a lot of community events as well.

7:56 Speaker 1 What about supportive housing and you know the veterans housing you’ve been involved.

8:00 Speaker 3 With, so that is really all overlaid as part of the affordable housing initiatives and different elements of affordable housing that speak to targeted underserved population that need additional support services and elements that take away from their ability to afford quality housing product and a lot of those you know, health issues and mental issues all cycle around and revolve

8:25 around quality housing.

8:28 Speaker 1 Is any work being done with like Rutgers specifically or New Brunswick with new residential developments.

8:38 Speaker 2 New Brunswick as a city is transforming by the day.

8:43 Speaker 3 Defco, which is led by Chris Palladino, is a nonprofit development arm for the city that works in public private partnership with the city and they are implementing tremendous high rise residential construction they partnered and there was a performing arts center recently built. And there is a tremendous life science commercial component that is now being developed in partnership

9:07 with s JP and and there are some major life science tenants that will be coming in.

9:14 Speaker 2 Nokia is coming in as well.

9:16 Speaker 3 And so the the synergy of the anchor educational institution and a very large corporate center makes New Brunswick and the surrounding communities in Middlesex County a very desirable place.

9:27 Speaker 1 What about the Fort Monmouth where Mammouth.

9:29 Speaker 3 Is seeing a variety of redevelopment, film studio, market rate housing, affordable housing. There’s a slew of different programs and uses that are going into.

9:40 Speaker 2 The base by a variety of developers. It’s really exciting to.

9:43 Speaker 1 See the revival of New York. What’s happening there.

9:47 Speaker 3 Uh, high rise after high rise. It is a very different city than it used to be. Newark is seeing a lot of market rate high rise redevelopment. It is seeing an influx of affordable housing redevelopment. The city has taken a lot of proactive initiatives to facilitate a wider tier of developer and accessing some smaller local and minority

10:08 developers to facilitate some affordable housing. They just implemented a new program where they were able to coordinate with underserved and lower income residents in the community to buy vacant houses for a dollar and help them build.

10:23 Speaker 1 On home ownership, which is what happened in New York about twenty five years ago, thirty years ago.

10:28 Speaker 3 Yeah, Newark is really seeing a tremendous amount of investment. It’s really quite marvelous.

10:33 Speaker 1 So in general, with the exception of the availability of capital, which is my last question.

10:40 Speaker 3 So capital is an interesting time. There is a lot of capital that wants to deploy. There’s a lot of capital that came over the river from New York. There’s a lot of local, state based capital. It doesn’t necessarily want to deploy at these interest rates and at the equity requirements that are needed. But the demand for the

11:03 inventory and the long term value and opportunity that comes with the investment is there, and so the investment is continuing. It is starting starting to loosen up, and it’s just a question of when you need to sign your loan and when you.

11:17 Speaker 2 Really need to put a shovel in the ground.

11:19 Speaker 3 So I’m content to spend twenty twenty four doing land use approvals and not signing a loan, okay, but twenty five is my year to go in the ground.

11:27 Speaker 1 Good. I’d like to thank Dean Cliff for being here and I’ll see you next week.

11:31 Speaker 2 Good to see you, Thank you for having me.