Jersey City, New Jersey The Jersey City metropolitan area, across the Hudson River from New York City, began to rebound in the mid-1980s after a long decline. The rebound strengthened further in the 1990s. From 1990 to 2000, the population in the metropolitan area increased by 10.1 percent to 609,000. During the decade, Jersey City’s population increased to 240,055, a 5-percent rate of growth. The Jersey City metropolitan area’s economic mix has shifted significantly since 1993, owing to a sharp increase in employment in financial and other services, which has more than offset declines in manufacturing. From 1997 to 2000, average annual employment grew by 7 percent, with almost half of the gain occurring between 1999 and 2000. During this 3-year period, employment in the finance, insurance, and real estate sectors increased 27 percent, and services increased 13 percent. Between September 2001 and December 2001, the finance sector showed a dramatic growth of 17 percent, owing to the relocation of firms from Manhattan. However, employment declined by 5,700 jobs in the first half of 2002 compared with the same period in 2001. The losses occurred in all sectors except finance and trade. Jersey City’s multifamily and office markets began to boom in the second half of the 1990s. Two attractive features of Jersey City’s real estate development were readily available sites, provided by urban renewal actions in the 1970s and 1980s, and its proximity to New York City’s financial district. Areas of Jersey City and Hoboken served by PATH (Port Authority Transit Hudson), a major commuter link between Hudson County and downtown and midtown Manhattan, have experienced large-scale residential revitalization. Since 1990, development has been expanding northward to Bergen County with the advent of convenient ferry service to Manhattan. The September 11 attack on the World Trade Center stopped PATH service between New Jersey and downtown Manhattan; however, service is expected to resume in 2004. Employment growth in the metropolitan area would not have been possible without the completion of new office space on the Jersey City waterfront. Since the beginning of 2000, a total of 1.7 million square feet of office space has been added, for a current inventory of some 16.5 million square feet. According to the real estate firm of Julian J. Studley, Inc., the Jersey City metropolitan area’s waterfront office market had a 9.8-percent vacancy rate for Class A space in the fourth quarter of 2001. The vacancy rate is attributable to the area’s transportation disruptions and job losses in New Jersey-based banks despite substantially lower rents than those commanded in Manhattan. Class A space is being offered for an average of $34 per square foot, approximately two-thirds the rate for comparable space in Manhattan. Currently, seven large office buildings (five in Jersey City and two in Hoboken) with more than 5 million square feet of space are under construction. When completed, the major tenants are expected to be financial service firms such as Chase and Charles Schwab, which will use the space to expand and consolidate operations. A number of these firms are expected to sublease part of their contracted space due to post-September 11 employment reductions in securities and investment banking. Overall, the rental market in the Jersey City metropolitan area is tight. Since the destruction of the World Trade Center, the market for Class A rentals has softened somewhat. Rents in some developments less than 10 years old have declined. However, the market is strong. According to the FW Dodge Pipeline Reports and local sources, approximately 1,000 private multifamily rental units have been completed in the area during the past 18 months. The largest was a 526-unit apartment building in Hoboken. In West New York, the 330-unit final phase of a 900-unit rental development is scheduled to open soon. It is estimated that some 3,350 units are under construction, of which 65 percent are in Jersey City. The largest is a 635-unit mixed-use development. The majority of units for sale in the metropolitan area are condominiums, and the supply of available units is limited. Local Realtors indicate that units in the Hoboken segment of the market are selling for prices approximately 15 to 20 percent higher than units in Jersey City. Prices for one-bedroom units in Hoboken begin at $225,000 and for two-bedroom units at $300,000. In less expensive Jersey City, Pier Hunt Club, a new construction project, is selling two-bedroom units beginning at $250,000.

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