By Sabina Mollot
In Jersey City, where residential rents have been soaring as those across the Hudson do the same, developers of multifamily properties with retail spaces have started to see their commercial tenants as a key ingredient in the ongoing amenity war.
Retail is also a factor in creating community, they said, while sharing their thoughts at The Jersey City Summit for Real Estate Investment, held last Monday at the local Hyatt Regency.
Paul Silverman, co-founder and principal at Silverman, said before even finishing a recent development, Park Francis, the owners knew they wanted a Cuban restaurant. After approaching Rumba Cubana, they ended up holding the space for six months for the restaurant before a lease was signed, with Silverman explaining, “Residents like to see that.”
The owners also intended a basement space under development specifically for a bowling alley. “It’s something that attracts excitement and attention and differentiates the building,” Silverman said.
Ken Pasternak, founder of real estate investment firm The KBR Group, suggested retail has become as much about being an amenity for residents as a source of revenue, while observing it’s resulted in a cityscape that’s far less blighted than the scene in Manhattan.
“I don’t see empty storefronts like I do on Broadway on the Upper West Side where I happen to have a pied-a-terre,” said Pasternak. Still, he feels that Jersey City is still “under-retailed” for basic needs like schools as well as specialty types of services.
Chris Weilminster, executive vice president and COO of Urban Edge Properties, a REIT focused on redeveloping retail, said developers are looking for retailers who provide services to the neighborhood. “What does the community need? Is it a Target? A grocery store, entertainment? It’s not a replication of what’s there. It’s a complement.”
Jose Cruz, senior managing director and co-head at brokerage JLL; noted that quality retail is especially needed in areas beyond the waterfront like Jersey City’s West Side and Journal Square neighborhood.
“They don’t get the same recognition as the waterfront does,” he said.
But wherever one does end up, Weilminster warned developers not to try to sidestep the community’s existing residents before bulldozing on in.
“We need to build partnerships with those communities or it’s not going to happen,” he said. “You can’t just pass go.”
Paul Kermizian, CEO and co-founder of the eight-location bar chain Barcade, said it’s appreciated when owners are willing to work with him on how a retail space will turn out. And these days, because Barcade is an established business, with one of its earliest locations in Jersey City, he’s been able to have involvement in the process.
“We can share in some of the (building) costs, which is great because it’s a huge undertaking to do a space from scratch,” said Kermizian. “(Before) we’d go into a place with where we didn’t have any say over HVAC or main systems.”
Parking was also discussed with Yair Goldberg, executive vice president of sales and marketing, with U-Tron, an automated parking service; calling it a differentiator in buildings.
“Everyone’s pushing product with no parking so if you have parking, you have an edge,” he said. “We are building walkable communities, but cars are not going away. That also applies to millennials. They don’t want to drive, but they’re not parting ways with their cars.”
Goldberg added that a big part of what his service is called on to do is coordinate peak driving times to prevent gridlock in buildings’ garages as well as get acquainted with a new demand for “smart parking,” consumers calling for their cars via an app.
“You can be in your home or office and know how long it’s going to take,” he said. “Automated parking is no longer an afterthought but it being seen as central. It should be considered upfront. It’s something everyone expects to have which is control over their everyday life.”
Moderating the panel on mixed use/retail was Donald Pepe, partner at commercial real estate law firm Scarinci Hollenbeck.