The story of Jersey City's waterfront has been written over three decades — and you could easily tell it through the eyes of LeFrak.
The revered development firm has been there since the mid-1980s, transforming what were blighted rail yards into the 600-acre, mixed-use Newport neighborhood that's still growing today. There's no denying it's a measured approach to building out a master-planned community, but LeFrak executives say it's been about responding to the market and filling different needs — from apartments and hotels to office towers and amenities.
“That's been the case from the beginning, and we're still expanding in all directions,” said David Thom, LeFrak's vice president of design and development. He later added: “Doing it incrementally — certainly it does require some patience, but it lets us adjust as we go along.”
The most recent addition to Newport is Laguna, a lavish 158-unit apartment tower that opened last summer and was fully leased by December. And the 19-story building abuts a 2-year-old park dubbed Newport Green, an amenity that Thom said is key to unlocking the remaining sites on the northern end of the property.
So as LeFrak prepares for its next move on the waterfront — in the midst of a citywide building boom for Jersey City — executives with the firm spoke to NJBIZ about the Newport community and the market as a whole.
David Thom is LeFrak's vice president of design and development and has been working in Jersey City for LeFrak for the past 14 years.
Richard Wernick is LeFrak's executive leasing director.
NJBIZ: What's been the overall response since Laguna opened?
Richard Wernick: It's been right around a year since the first residents started to take occupancy. The response has been great. ... We've had very strong tenant retention there, and the units that are turning over are renting very quickly, so there continues to be demand for a product such as Laguna in the market there.
NJBIZ: Has the project taught you anything about how the market has changed over the last few years?
RW: I think the market has just become more sophisticated as the area has become more developed. At Newport we continue to grow and we continue to see that there is room to push on the boundaries of the asking rents and the rents per square foot, and with that there are expectations for a higher-end product. So we continue to see it moving upward.
NJBIZ: Are rents continuing to rise as you continue to build luxury units?
RW: We certainly see healthy rent growth year in and year out there, and having more high-end product continues to kind of push that. You know, a rising tide lifts all boats, so we're seeing nice increases on the lower end of our price point, as well.
NJBIZ: Are there amenities or features that are becoming important now that weren't as prevalent in years past?
David Thom: The answer to that is yes. … When we develop buildings now, we do look to program them with more amenities than was the case in the past. These range from the more common programming such as small gyms, playrooms and roof terraces. We've also started including things like screening rooms and barbeque areas.
RW: Ten or 15 years ago people were really happy to have a doorman. Our recent projects have been more on the luxury side, and with those prices come the expectations of having these amenities in the building. So it's more important to have it to be able to attract the tenancy that's going to be able to afford the rents in the higher-end properties.
NJBIZ: What is the next big project now that Laguna has opened?
RW: There are more sites for future development, and we'll address those as opportunities come up in the future.
DT: The general theme here is that development of the park, which opened in 2012, really activated the northern end of Newport for us. And in the preceding (years), a lot of the development centered around slowly filling up sites that were surrounding the PATH station and the town square at the southern end of Newport. And now that the park has been open — and has been doing very well — it's really activated that area. It's created a number of additional development sites that we're constantly evaluating in the northern end of the development.
NJBIZ: How important is it to be deliberate in how the site gets developed?
DT: I think it's a fairly straightforward strategy where the infrastructure had to come first, which was certain key infrastructure — power, sewer and so on, (and) the skeleton of the road network. We've generally responded to the market and we've generally tried to have sites available so that, when the market suggests a need for it, we have something that can work for that need, whether it's hotel and residential or commercial buildings, or site amenities.
Newport started growing around the PATH station and it's been growing sort of in all directions since. We continue to grow west and north. … If you actually walk up River Drive you can see the changes in building design and how they interface with the street and retail design. … (For instance) we had a building where we used to have the pool equipment room face the street — it was just a blank wall with louvers — now that's a pet grooming shop, because times changed and street retail became more important. We went in and we moved the equipment to the back and put storefront in.
So that's allowed us to not only adjust as we go forward, but also we've gone back and renovated a fair bit of Newport's earlier buildings — and changed the landscaping and changed some of the retail. There's a lot more ground-level retail and a lot fewer fences than there were in the past.
NJBIZ: How does Newport fit into the idea that Jersey City is a 24/7 destination, and no longer just a bedroom community for Manhattan?
DT: From the beginning, Newport, because it's a large development, has tried to not only provide housing, but also provide shopping, also provide street-level retail, also provide restaurants and different programming, and of course, workplaces. … There will be in Newport's future additional office buildings, additional residential buildings, additional amenities, additional opportunities for programming.
NJBIZ: Are the demographics of the area changing?
RW: I think we're seeing more families there. The park has helped to attract a more family-oriented demographic and I think you're seeing some more high-net-worth-income individuals coming into the community as well, whether it's people looking to not spend the kind of money that they would otherwise be spending in Manhattan or are looking for something a little bit different. (There are) limited opportunities in Manhattan for people with such restrictive vacancy, that people just continue to get pushed out.
NJBIZ: Is more infrastructure or upgraded infrastructure needed as the needs of Newport continue to expand?
DT: The key systems are all there. All the capacities are there, the storm sewers and the sewage lines and water service and power service. That's the fun with infrastructure — you have to build an awful lot of it early on because it doesn't phase as well as doing the asphalt on top for another road. The key infrastructure is in place. That was why in the 1980s it took a while to get going, because they really spent most of the 1980s building infrastructure.
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Newport by the numbers
square feet of retail and hospitality venues
high-rise rentaland condominium buildings
SOURCE: The LeFrak Organization