Applied’s 862 apartments in HarborSpire to cater to Jersey City’s new broker crowd

Tri-State Real Estate Journal
March 8, 2001
By Christine Gardner

With development of Class A office buildings on the Jersey City waterfront showing no signs of slowing, Applied Development Cos. is about to launch construction of twin high-rise apartment buildings to serve the city’s growing population of Wall Street brokers and other professionals.

The $140 million project will consist of 862 apartments, 20,000 square feet of upscale, ground-floor retail space and above-ground parking decks with 680 spaces.

At 55 stories, the first building to be constructed will be the tallest residential tower in the state, and both will be among the tallest in any genre on the Hudson waterfront and in the state, Applied president David Barry said in an interview last week.

Called HarborSpire to reflect their tall, sleek architecture, both structures have received site plan approvals and last week, Applied, the family-owned Hoboken developer, also landed a 15-year tax abatement for the first building.

Art deco towers

Designed by DeWitt Tishman Architects LLP of Manhattan, both Art Deco-style buildings will rise side-by-side on a city block in the downtown financial district, behind Plazas 5 and 10, the newest planned additions to Mack-Cali Realty Corps.’s Class A Harborside Financial Center office complex.

The location is ideal for HarborSpire to capture thousands of stock brokers and other professionals from companies like Charles Schwab & Co., which just leased all of the 575,000 square-foot Plaza 10.

Schwab’s expansion in Jersey City “is just the tip of the iceberg” of the city’s coming increase in population, said Arthur Flinn, associate at the Edison, N.J., branch of the Manhattan-based Julien J. Studley corporate real estate services firm.

Flinn said, “You are going to see the population in Jersey City swell incredibly in the next 18 months” when other Manhattan brokerages, including PaineWebber and Goldman Sachs, begin to fill building they have committed to on the city’s waterfront.

The office activity is bound to create demand for apartments among the companies’ young professionals, who may not want to contend with commuting from New York or the Jersey suburbs. Others may move from Hoboken, a young professionals’ haven but whose popularity has stretched its supply of rental housing thin.

HarborSpire’s first tower of 55 stories, with 445 rental units, 9,000 square feet of retail space and costing $80 million, will break ground in November with completion set for about 18 months later, Barry said.

The building will offer studios to three-bedroom apartments with rents from about $1,750 for a one-bedroom to $2,350 for a three bedroom plus utilities, or approximately $28 to $30 a square foot, comparable to the city’s other luxury residences, Barry said. The one-bedroom rate is about a quarter of an $86,000 annual salary, which Barry said should be affordable for the city’s professionals.

Focus on luxury

“It will be a super-luxury building,” Barry said, with an indoor pool, basket-ball court and other amenities. Each floor will have nine units, all built into corners with ample windows. Most units from the 20th story up – and all from the 35th to 55th stories, clearing Harborside’s 33 story Plaza 5 – will have Manhattan views.

The second building, 50 stories with 420 units, will be built according to market demand.

HarborSpire will take up a city block, bordered by Washington, Green, Morgan and Bay streets. Applied purchased the land from Liberty Center Associates, a private Florida partnership, for an undisclosed amount.

Applied will tap prior sources, HVAC Mortgage Co. and the AFL-CIO Pension Trust Fund, to finance the project.

Obtaining a tax abatement was important to securing financing. Jersey City’s tax rate is so high that if the abatement had not been granted, “the burden would be so great that the building wouldn’t be built,” Barry said. Applied expects to pay about $1.5 million the first year that would go up incrementally in subsequent years.

No slump fears

Barry said his company “is mindful” of the slumping economy but feels confident about building in Jersey City. The city has developed an insulated, almost impenetrable economy that for real estate translates to “a unique submarket that will fare better than most” in a recession, Barry said. “Its office development has reached critical mass. On a long-term basis, Jersey City is a good place to be.”

The company has been successful in the city with its Port Liberte condominium project, which sold out its first 500 units. Applied has filed applications for the next 275 of the total planned 1,650 units and expects to break ground on the next phase in the Fall, Barry said.

Applied is also building rental and for-sale housing as part of redevelopment projects on the Hoboken and Long Branch waterfronts. It is also seeking approvals for a $130 million retail-apartment complex in New Brunswick, a project it is under-taking in partnership with Matrix Development Group of Cranbury, N.J., and Roseland Property Co. of Short Hills, N.J..