Insights Q&A with Adrienne Albert, CEO OF MARKETING DIRECTORS, Post-Covid Interview

As part of a continuing series with industry leaders, we are delighted to bring back, Adrienne Albert, the CEO of Marketing Directors. We last interviewed Adrienne on May 21, 2020 in the middle of the uncertainty of the pandemic. Many readers of the GRID Bits took comfort from the interview and seeing that the real estate world didn’t shut down during this difficult period. We wanted to catch up with Adrienne and her team this summer to get their insight on the market this year and going forward as we get back to normal.

Grid Bits: Not surprisingly, our approach to developing and marketing multifamily has changed because of the pandemic. What are some of the positive changes in terms of amenities and features you see enduring post-pandemic? How has it changed the way The Marketing Directors approach a new project?

Adrienne Albert: Generally, more individualized and less congregate spaces have dominated design during the pandemic. There hasn’t necessarily been a shift in actual amenities, more so the way those amenity spaces are programmed. Changes have been more focused on the separation of certain areas such as workspace given the remote work trend which will endure to some degree post-pandemic. Common outdoor space has always been a high priority for us at buildings and that will of course continue.  

Outdoor space was and will continue to be a popular home feature that many buyers and renters will look for, especially in suburban markets. Once people return to the workplace, we will return to amenities being the additive space to smaller homes. Some of the attention given to features related to the pandemic were already considerations in mind for easier living but their use or importance has just been accelerated, such as a focus on grocery delivery services or using personal smartphones to access apartments or amenity spaces. 

Grid Bits: You said last year that there was tremendous pent-up demand in the rental marketplace. That turned out to be spot on! You have had great success with projects this year. Would you say demand has snapped back to pre-pandemic levels? Where are we in the recovery?

Adrienne Albert: YES! Demand has snapped back and is exceeding pre-pandemic levels. 2021 has seen a major surge in activity that has increased throughout the year thus far. For example:

• Hamilton Cove in Weehawken, which opened right in the beginning of the pandemic, signed 94 leases in the first 3 months and has signed 154 leases in that same period this year, a 64% increase. We are nearly fully leased there now.
• 100 House, the second phase of The Enclave development in Jersey City, opened in September 2020 and was leased in approximately five months at a velocity of 26 leases per month. We are now doing double that pace at the third phase, One Ten, which has 238 homes and is now fully leased since opening in March.
• The Eddy in Harrison, which launched in February, has now leased 100% of its 310 homes and is averaging over 50 leases per month, nearly 4 times the velocity we achieved in Harrison 2-3 years ago.
• The Atwater in Bogota has leased nearly 75% of its combined 273 homes with strong leasing activity as additional residences have been released over time.

We also completed a record sale for Jersey City when one of our penthouses sold for $3.9 million in March, which is extraordinary considering the housing market challenges over the last year.

As tenants and buyers return, they will seek housing closer to work and transportation. Hybrid work models will also allow renters to live further from the city but close to transportation in order to stay easily connected with the office.

Journal Squared 2

Grid Bits: We are stunned with the success of Journal Squared 2 lease up. It flies in the face of all the fears expressed by many last year. What do you attribute this success to?

Adrienne Albert: Mostly due to the great location directly next door to the Journal Square PATH station and central location within the growing Journal Square neighborhood. The building offers great views and finishes and amenities, and our team has done a fantastic job there. We are by far the tallest building in the area at 68 stories and offer unmatched views. We leased all 704 homes in about 4 months since we opened the building in the spring. We are averaging 16% higher at the second tower versus what we accomplished at the first tower on a price per square foot basis, acknowledging that Journal Square is now a highly desirable location trading at a premium. 

Grid Bits: You also had great success in the suburban markets like Ridgewood. Do you see the suburban market for multifamily rental housing continuing to grow? How important is rail to this market? Are the amenity packages the same? What is the spread in rents, urban to suburban? Is there a discount either way?

Adrienne Albert:

We have been successfully leasing in areas ranging from 210 Main Street in Hackensack to Premiere in New Brunswick. And we are about to open a few other suburban projects: one in Woodbridge, NJ called Avenue and Green, one in Linden, NJ called Citizen Linden, and the second phase of Centurion in Union, NJ which we expect to be very successful as well. We expect suburban markets to continue to grow, especially in areas close to transportation.  

The Benjamin

Amenity packages at suburban properties are in line with those in urban areas as no matter the location people want the convenience and lifestyle they offer. The spread in rents from urban to suburban can be as high as 50% but of course this is area dependent. The Benjamin, for example, had end prices comparable to Jersey City high rises, albeit with larger homes. While we have seen a trend toward smaller homes in the new development market, suburban properties still tend to skew larger with home sizes.  

Grid Bits: I raised this concern before and I think it’s still a valid concern, are you concerned about the full pipeline we now have in many markets along the waterfront?

Adrienne Albert:

Riverhouse9

As more properties do come to market, we see them contributing to the growth of the wider area. If the demand so far in 2021 is any sign of what’s to come, these projects will see healthy absorption as projects that have opened recently along the waterfront have seen a lot of success.

For example:

• RiverHouse 9 in Weehawken is over 80% leased in just 4 months
• We fully leased the first phase of The Agnes on the West Side of Jersey City in just five months since it launched.
• We have seen strong activity across the Gold Coast including areas that hadn’t previously seen as much new development, such as Bayonne. Bay 151 in Bayonne was leased in about 10 months entirely through the pandemic after opening in May 2020.
• One500 in Teaneck, which isn’t along the waterfront but also in an area that hasn’t seen much development and was very successful. The property also launched in the middle of the pandemic in July 2020 and was fully leased in eight months.

There is demand not just along the waterfront but it is spreading further inland and the tide will help raise all ships.

Grid Bits: Finally, you are active in the New York City market, how is the New York housing market recovering? Is the Jersey market still the lower cost option to NYC or is Jersey beginning to look and act as a separate independent market and lifestyle choice?

Adrienne Albert: The NYC market is recovering well. Apartment occupancies have been rapidly strengthening in 2021 as many New Yorkers have returned, although not all are going back into the office. People are now able to take advantage of NYC’s abundance of food and entertainment options that weren’t available during the pandemic.

Incentives are decreasing as well and we are seeing 1 month free replacement offers where 3 months free was previously common.

This is already an encouraging sign for the NYC market. As workers return to the office and children go back to school, the market will continue to strengthen.

Although Jersey should be an overflow from NYC, it suffered from not having a firm identity.

The lifestyle they loved in NYC was shut down which took away their primary reason for staying in the City. Now that life is returning, the tenants and buyers are returning without any seemingly negative effect to the Jersey markets.