First they conquered Hudson Yards; then they came for Jersey City.
The Related Companies and Panepinto Properties have closed on a $58 million acquisition loan for Hudson River land in Jersey City, N.J., with plans to build a high-rise residential property with up to 750 units, Commercial Observer has learned.
JP Morgan Chase supplied the financing, while Cushman & Wakefield (CWK) arranged the transaction on the behalf of the seller, Veris Residential. Newmark (NMRK)’s Doug Harmon and Adam Spies represented both the buyer and the seller.
Pre-development costs are expected to reach $80 million, with the total cost expected to reach about $600 million, according to Related.
Related picked up the 1,338 acre site, also known as Harborside 4, from Veris for $58 million in July, as CO previously reported.
The development will be Related’s first foray into the New Jersey market, despite building millions of square feet of office and residential space just across the Hudson River at Hudson Yards, the massive real estate development on Manhattan’s far west side.
“We’ve been looking at sites in Jersey City for a long time. It’s a market that really interests us,” said Frank Monterisi, executive vice president of Related. “The thing about Jersey City is we realized how proximate it is to Manhattan, and we noticed that a lot of our residents, people living in our portfolio, were either former Jersey City residents or people coming from that market and coming into our buildings.
“We look at Jersey City as an extension of our New York metropolitan area development strategy,” he added.
The riverfront site is expected to utilize at least 800,000 square feet of space in the new development.
Related President Bruce Beal said that his firm plans to build a mixed-use residential tower up to 60 stories, as city zoning amendments allow for that height as of right, and that the final unit count would be roughly 750 apartments, with rentals at the lower floors and for-sale units likely at the top. A retail component with a combination of restaurants, food and beverage, parking and retail is also planned for the base of the building, he said.
“Jersey City is a market that continues to grow, and if you’re looking out the window here at Hudson Yards, it’s hard to not be connected to Jersey City,” Beal said. “This transaction will hopefully be one of many.”
Beal expects the developers to seek a $350 million to $400 million construction loan to get to work on the project, expected to start next fall or before the end of 2024.
“We’ll go to our stable of construction lenders,” he said. “We’ll capitalize with one of our joint-venture equity partners and with Related’s equity and Panepinto.”
Both Related principals praised the cooperation of Jersey City Mayor Steven Fulop, the Jersey City Council, and the Jersey City Planning Board, who they said helped streamline the project through various bureaucratic hurdles.
“At times people complain about challenging processes or administrations that don’t want things to grow, but the leaders and political environment over there have created a platform to invest in the area,” said Beal. “They’ve done a very good job of proactive planning development there, and it’s clearly working.”
Despite having more than 1,000 units in two buildings currently under construction in the Journal Square neighborhood of Jersey City, Joseph Panepinto Sr., the 78-year-old patriarch of one of Jersey City’s largest family-owned development companies, is eager to start construction on the Harborside 4 site.
“I think this is the last and best waterfront site that can be developed for residential purposes down here,” he said. “It will probably be over 60 stories, and I think this will be very successful.”
Brian Pascus can be reached at email@example.com.