\n<\/a>
\nBut that doesn’t mean that the New York City metro is out of deals.<\/p>\n
Just 10 minutes from the World Trade Center in Lower Manhattan, Jersey City\u2019s Journal Square neighborhood is undergoing a dramatic transformation, creating fertile ground for upstart investors to pocket big gains.<\/p>\n
(In fact, in less than six months, a recent triplex\u00a0acquisition has appreciated by nearly\u00a075%. We have a three-unit mixed-use going on the books — we foresee refinancing at a 50% gain here, based on the NOI.)<\/p>\n
The evidence of gentrification is evident: new retail, new faces, and\u00a0new developments are going up daily. As a result, so are surrounding property values.\u00a0(Read more here — Journal Square then and now.<\/a>)<\/p>\n Here are 10 reasons why Journal Square is the next booming Northeast real estate market.<\/p>\n A stone’s throw from Journal Square, “The Beacon,” a 1,200-unit luxury development spread across 2M square feet of residential and retail space, has helped kick off a redevelopment resurgence in the neighborhood<\/a>.<\/p>\n As a result, working professionals from Manhattan have started to come over, changing the scope of the neighborhood dramatically. The property opened in April and it’s already changed the rental and sales levels in the surrounding areas.<\/p>\n Related:<\/strong> Real Estate News Roundup: Most Expensive U.S. Markets Have Appreciated 2x as Fast as Least Expensive in Past 30 Years<\/a><\/em><\/p>\n The Beacon Developers, including the Kushners, have broken ground on Jersey City projects, with 30% short-term appreciation projections. With new projects projected to finish,\u00a0Mayor Fulop expects Jersey City to surpass Newark<\/a> as the state’s most populous city by the end of the year.<\/p>\n Jersey City has kickstarted developments in and around Journal Square. Here are some of the highlights:<\/p>\n At the\u00a0nearby McGinley Square area, there are currently plans in place to erect THREE high-rises with Class-A multifamily units<\/a>. In addition, a new university will be built with the aim to \u201ctransform\u201d McGinley Square<\/a>, as they so modestly put it.<\/p>\n In addition to the three high-rises, ground has broken on a new plaza, including a movie theater.<\/p>\n Because of the new properties, price levels are literally changing every day.\u00a0Twelve months ago, I viewed a Class-A 2-bedroom unit, which then went for $1,600 a month.<\/p>\n Here are comps for condos at the Beacon — sales and rentals — which sits directly across that unit, a\u00a0significant driver of the rental market boom in the area.<\/p>\n Sales comps<\/strong><\/em><\/p>\n Rental comps<\/strong><\/em><\/p>\n In the surrounding neighborhood, bars have started to open to provide an alternative to nearby Hoboken. In addition, a Burger King, Popeyes, Subway, Starbucks<\/a> (and we know what Starbucks does to property prices<\/a>), Taco Bell, plus several commercial banks have opened in the area.<\/p>\n Related:<\/strong> The Big Difference Between Those Who Tank & Those Who Survive in Down Markets<\/a><\/em><\/p>\n We recently picked up a remodeled triplex, vacant, in the area for $750k through a broker — no off-market, under-the-table wheeling and dealing. Just a regular ole transaction.<\/p>\n In weeks, it appreciated by $50k — while still vacant, as The Beacon had just opened. Now, since we\u00a0bought it, a Citi Bike station — known as the \u201cgateway to gentrification\u201d<\/a>\u00a0— has opened right outside the door.<\/p>\n Nationwide, Class A cap rates range from 4.8%-5.5%<\/a>, with NYC and Northern Jersey sitting between 3.75%-5%.<\/p>\n If you use the triplex deal as a benchmark, judging by current\u00a0NOI and a 5% cap rate — standard\u00a0for the NYC Metro — the current valuation of the property is $1,296,000 — with room to grow as the area continues its daily gold rush.<\/p>\n That’s a ridiculous 73.3%\u00a0ROI\u00a0in less than six months.<\/p>\n Some more numbers to consider:<\/p>\n In other words,\u00a0while NYC’s cap rates hover around 3-4%, there are still deals to be had looking East.<\/p>\n As NYC rental prices continue to skyrocket, working professionals are being priced out of Manhattan, Brooklyn, and even Queens.<\/p>\n With the PATH, the commute to Manhattan is shorter, and it\u2019s directly linked to the Subway. (You can use your Subway card for the PATH and vice versa.)<\/p>\n1. The Beacon Effect<\/h2>\n
2.\u00a02016 is BOOMING<\/h2>\n
3.\u00a0The City of Jersey’s Redevelopment Plans<\/h2>\n
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4. The City\u2019s Grand Plans to Redevelop McGinley Square<\/h2>\n
5. Comps Suggest Further Growth<\/h2>\n
6. The Retail Factor<\/h2>\n
7. Properties Appreciate Daily<\/h2>\n
8.\u00a0Cap Rates Indicate There are Still Deals to Be Had<\/h2>\n
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9. The NYC-PATH Factor<\/h2>\n
10. MTA-PATH\u00a0Integration?<\/h2>\n
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