The Stoler Report with Michael Stoler: Debra Tantleff

0:00 Speaker 1 Good morning. This is Mike Stola for the Stolar Real Estate Report. What’s happening in New Jersey. A lot of things have been taking place in Jersey. New governor, new laws, new regulations. So who’s building, who’s developing, and what’s happening in different aspects in New Jersey. I’m fortunate to have the founding principle of Tatum real Estate, Debra Tantlet. Thanks

0:23 for being here.

0:24 Speaker 2 Always special to see Michael.

0:25 Speaker 1 So tell me what’s happening on the other side of the river.

0:29 Speaker 3 So it’s an interesting time in the market. As you said, we have a new governor who ran on a campaign based on affordability.

0:36 Speaker 2 We are at the tail end.

0:37 Speaker 3 Of the legislative battle that took place in terms of the next round of affordable housing, and so all of the municipalities in the state have just kind of outlined their plans going forward on how they’re going to deliver more housing to the market.

0:52 Speaker 1 So how are they planning to do that?

0:55 Speaker 3 So towns basically had to proactively go ahead and plan areas that they intended to redevelop or where they were going to identify areas to locate housing and affordable housing. Every town you know, had to go through a calculation of an obligation and determine what their local number was.

1:12 And so there were certain towns that you know, drag their feed and contested. But for the most part, unlike the last round that we had, most of the municipalities bought into the process. It was a very clear legislative process that was outlined. And so it’s spurring a whole round of new redevelopment plans and new pipeline for the market.

1:34 Speaker 1 Let’s talk about some redevelopment plans. You have a number that taking place throughout the state.

1:40 Speaker 2 Yeah, so we are active in Mammouth County.

1:43 Speaker 3 We’ve we’ve developed some projects in red Bank and Bellmar there that are leased up and stable and residents are very happy and the communities are doing very well.

1:52 Speaker 1 What are you renting these units for?

1:55 Speaker 3 They very They vary anywhere from you know, thirty five hundred dollars to forty five one hundred dollars in Belmar. We’ve got some units in Red Bank that are renting north of five thousand dollars. And so for for Mammouth County on a square foot basis, those are those are pretty healthy rents.

2:11 Speaker 2 Those are more boutique communities.

2:13 Speaker 3 That cater to a little bit of a more established professional and an empty nester. We are actively in construction on a project in Long Branch that’s in the downtown corridor. There’s been a historic focus on the Ocean Front with very high end condos selling you know, north of eleven hundred and fifteen hundred dollars a foot, and our project

2:32 is one of the key anchors that’s going to animate the downtown corridor. So we’ll be delivering that in the spring.

2:39 Speaker 1 What about affordable apartments in that development.

2:41 Speaker 3 So Long Brand, it’s one hundred percent market rate building. Long Branch is a is a diverse community where they have a lot of existing affordable housing, so they are able to meet their obligation by rehabbing existing communities and existing homes. We also have another project that’s in the approval pipeline and Long Branch that’s on the western side

3:01 of the boulevard towards the Ocean that kind of connects the Ocean Corridor down to the Downtown corridor. So you’re seeing a lot of You’re seeing a lot of expanding of the radius in Long Branch because the community has such a great reputation, but it’s really becoming more than just the ocean, and where Peer Village has historically been

3:18 kind of the destination, Well.

3:21 Speaker 1 What about the other Asbury Park?

3:23 Speaker 3 Asbury Park is very active, is going to continue to be active. There’s a mix of rentals happening there. There’s some high end condos happening there. You’re seeing second homes from New York residents, but you’re also seeing you know, you’re seeing seasonal rentals and you’re seeing full time, full time residence there as well. A very healthy, active market.

3:40 But the secret to successful developments in New Jersey is animating your downtowns and your communities. And so you’ve got to find that ingredient of what’s that special sauce that makes your community the desirable place to live. So a town like a city like Long Branch, where they’re really focusing on activating their downtown corridor, their commercial business district.

4:01 Speaker 2 You know, it’s the farmer’s markets.

4:03 Speaker 3 It’s the it’s the food festivals, but it’s also the train station to Manhattan, and it’s also the ocean, so they have the mix of everything. Mammoth County is unique that it has a very significant employment driver Bell works.

4:16 What’s a redevelopment of the old Bell Labs facility. It’s over a million square feet. So there’s a wide range of employers, incubator startups and larger companies. And the Fort Mammoth Military base is also being redeveloped and Netflix is coming there. So there’s an influx of significant employment drivers that are generating reasonable household incomes and so now it’s

4:37 just about delivering a diversity of product at different sizes and different price points.

4:41 Speaker 1 In addition to Netflix are and other movie chains coming out there.

4:45 Speaker 3 There’s another production there’s a production company going into Bayonne. There’s a production company working in Carteret. The state has done a very aggressive tax credit program to incentivize the film industry.

4:59 Speaker 1 So what type of incentives do they give.

5:01 Speaker 3 It’s based on the number of employees and so it correlates to the dollar investment and the number of employees that are going to be generated by the business and then so then it offsets project costs.

5:12 Speaker 1 What’s happening in Middlesex County Middlesex is really interesting.

5:16 Speaker 3 We are working on a project in Highland Park, which is the sistering neighbor community to New Brunswick, which is where Rutgers University is located. New Brunswick as the urban core of Middlesex is going through really incredible renaissance. Devco, which is a nonprofit development partner for a lot of anchor institutions, is working on a major life science and

5:40 biotech redevelopment. So they just announced the helix has several towers to it and the Hub is a component within the helix, and they just announced their first cohort of incubator biotech companies. And so between Rutgers University, the pharmaceutical corridor in Middlesex County and this real intended focus between Robert with Johnson Hospital and some of these other pharmaceutical

6:06 companies and life science companies, there’s a significant bandwidth for valuable jobs and incomes into the state. And again, all these people need quality, diverse places to live.

6:20 Speaker 1 What about Marstown.

6:22 Speaker 3 Marstown is doing great again. You know, they are an interesting community that has both the employment base as the county seat and has a little suburban downtown feel to it. What’s happening in suburbia in Mars County as a whole is we’ve taken down a lot of square footage of office space. New Jersey as a whole has lost about

6:45 ten million square feet of office base over the years, and so there are pockets of Mars County that are seeing hundreds of apartments in communities that never had them before. And so while there is still a demand because there’s such a significant population base, those communities are renting up at more significantly subconcessions and at a little bit of

7:04 a slower velocity and a slower pace than you’re seeing in some of the more premium established urban markets or some of the more boutique, higher end suburban markets like in Essex, like a like a Millbourne or a glen.

7:17 Speaker 2 Ridge or something like that.

7:18 Speaker 3 With the developers now, but people like me, it’s we still have the core, the core group of developers that are mostly local based and state based. We have a couple of national national developers like an Avalon Bay, but most of the multi family shops in the state are New Jersey based. It’s a very entrenched and difficult barrier

7:40 to entry market in terms of the development process and the approval process, and so it’s a very intense relationship driven, locally homegrown type of industry. We are seeing investors from New York we’re seeing some institutional investors, but we’re seeing a lot of generational wealth and family funds that are you know, the back end capital.

8:02 Speaker 2 For a lot of these projects as well.

8:04 Speaker 1 So what what’s your thoughts what’s going to happen within the next year in New Jersey, different markets by different categories, you know.

8:12 Speaker 3 So we’re also working actively in South Jersey, which I think is really seeing a lot of attention that historically hasn’t been paid.

8:18 Speaker 2 So we have a large.

8:19 Speaker 3 Community in the approval pipeline there that we hope to break around on next year.

8:23 Speaker 1 I think you’ll ca what do you consider South Jersey. South Jersey.

8:26 Speaker 3 We are projects down in Gloucester County in Woodbury, which is also the county seat, so it’s near Rowan University and it’s part of it’s in the Inspira Hospital Network system is a big anchor institution in that market. But that’s like a twenty minute drive out to Philly. So we’re seeing a lot of activity in the South Jersey

8:47 market because land is a little bit cheaper, they haven’t had the dense amount of development that has happened in the northern half of the state, so some investment attraction is happening down there. In general, I think you’re going to see the towns that have adopted their fourth round affordable housing plans is where you’re going to see projects.

9:07 And if you’re not in those affordable housing plans, you’re probably not in the pipeline Q for those municipalities in the next ten years, the focus is really going to be on what they have identified to zone and to locate.

9:19 And so if you’re lucky to own property there or have access to properties in those plans, you’re in great shape. If not, you have a little bit of a longer hurdle in terms of just getting getting the attention and getting getting the investment and getting the approvals.

9:32 Speaker 1 Last questions, what’s up with the retail?

9:35 Speaker 3 Retail is local? Retail is service? Retail is restaurants? I would I would I should have started that. Retail is restaurants. You know, we most communities want to put a mixed juice component in and animate that downtown corridor because it is all about activating that foot traffic. So you’ve got to find the retail that brings people out, and people

9:55 are shopping online and you know, package room deliveries to buildings are getting larger. And larger, so so it’s about creating the entertainment spaces and the destination spaces, and the restaurants are always kind of those anchors.

10:06 Speaker 2 To those uses.

10:07 Speaker 1 I’d like to thank dev for being here and I know I’ll have you back in the future.

10:11 Speaker 2 Always great to see you.

10:12 Speaker 1 Thanks, thank you.